PSX Daily Market Review - 21st Sep. 2017

Trading volume at PSX floor increased by 4.42 million shares or 2.025%,DoD basis, whereas, the benchmark KSE100 Index opened at 43309.42, posted a day high of 43435.92 and a day low of 43145.83 during the last trading session. The session suspended at 43347.03 with a net change of 93.77 points and a net treading volume of 105.63 million shares. Daily trading volume of KSE100 listed companies increased by 10.49 million shares or 11.02%,DoD basis.
Foreign Investors remained in a net buying position of 2.83 million shares and a net value of Foreign Inflow increased by 1.02 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistani Investors remained in net buying positions of 0.022 and 2.82 million shares but Foreign Individuals remained in a net selling position of 0.015 million shares. On the other side Local Individuals and Insurance Companies remained in net buying positions of 11.94 and 3.18 million shares but Local Companies, Banks, NBFCs, Mutual Funds and Brokers remained in net selling positions of 0.52, 2.27, 0.49, 2.11 and 10.94 million shares respectively.

The U.S. dollar shone while Asian shares slipped slightly on Thursday after the U.S. Federal Reserve announced a plan to start shrinking its balance sheet and signaled one more rate hike later this year. MSCI's broadest dollar-denominated index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.4 percent. South Korea's Kospi .KS11 was down 0.1 percent while Australia shed 0.6 percent. Japan's Nikkei .N225 gained 0.8 percent thanks to the yen's fall against the dollar. U.S. share prices recovered quickly from initial losses following the Fed's announcement, with the S&P 500 .SPX ending slightly higher, adding to a string of closing records.
Pakistan’s exports of value-added textile products recorded positive growth during the first two months of 2017-18, the Pakistan Bureau of Statistics (PBS) reported on Wednesday. The upsurge in the value-added textile category has become the main driver of growth in the country’s overall exports, PBS data shows. Exports of readymade garments grew 15.65 per cent year-on-year to $418.63 million in July-August. Garment exports also witnessed a growth of 16.4pc in terms of quantity. Exports of knitwear, another value-added product, posted a growth of 7.53pc to $439.26m in July-August. It recorded an increase of 8.23pc in terms of quantity.
Amidst a divided house, the National Electric Power Regulatory Authority (Nepra) on Wednesday allowed an increase of 48 paisa per unit in the average electricity tariff for ex-Wapda distribution companies (Discos) for 2015-16. However, Nepra unanimously rejected a series of demands by the government that would have an additional burden of more than Rs225 billion on consumers or additional revenue for Discos on account of higher losses, non-recovery of bills, late payment surcharge etc. Member Tariff Himayatullah Khan, however, gave a dissenting note on a majority decision of Nepra, which allowed about Rs24.34bn to the distribution companies on account of the write-off of unrecovered amounts from chronic defaulters. The majority decision translates into the increase of 48 paisa per unit in the tariff even though its applicability on consumers would be subject to the government’s decision on subsidy.
The Senate Standing Committee on Finance learned on Wednesday that Finance Minister Ishaq Dar would supervise the payment of sales tax refunds in the near future. Responding to complaints by members of the committee, Federal Board of Revenue (FBR) Chairman Tariq Pasha said the board already made all preparations in this regard and that he was waiting for the go-ahead from the finance minister. The committee was informed that the finance minister issued sales tax refunds amounting to Rs26.43 billion against 10,439 refund payment orders (RPOs) last month. Mr Dar conducted an electronic ballot, which led to the transfer of respective amounts to the accounts of taxpayers.
Prime Minister Shahid Khaqan Abbasi Wednesday sought support of the World Bank for Diamer Bhasha Dam and said it was a critical project for the water security needs of the country. "We are prepared to work on some innovative solutions like separating water and power components of the project," the Prime Minister said while talking to CEO World Bank Ms Kristalina Georgieva, who called on him here at his hotel. The Prime Minister is in New York for the 72nd Session of the UN General Assembly. The CEO expressed commitment to continue to work with Pakistan and appreciated the progress made by the country in stabilizing the macroeconomic framework. Ms Kristalina Georgieva said the World Bank would continue to support economic reforms in Pakistan.

The market is expected to remain volatile today. We advise traders to exercise caution. Buying on dips and booking gains on strength is recommended.

The Benchmark KSE100 Index is capped by a resistant trend line which is trying to cap its bullish momentum right now, whereas, Stochastic and MAORSI have generated bearish crossovers on hourly chart which is an indication of the start of a bearish momentum on intraday basis, daily stochastic is also trying to generate a bearish crossover which might add more pressure if succeeded. For the current trading session a gap opening above 43450 is necessary to maintain a bullish momentum which might push the index towards 43700. Index has two major resistant regions ahead at 43700 and 44200 whereas supportive regions are standing at 43000 and 42560. A cautious trading approach is required for the current trading session.