PSX Daily Market Review - 22nd Aug 2019

Trading volume at PSX floor dropped by 8.01 million shares or 5.62% on DoD basis, whereas the benchmark KSE100 index opened at 30,419.22, posted a day high of 31,101.31 and a day low of 30,419.22 points during last trading session while session suspended at 30,972.75 points with net change of 553.53 points and net trading volume of 106.22 million shares. Daily trading volume of KSE100 listed companies dropped by 2.83 million shares or 2.6% on DoD basis.
Foreign Investors remained in net selling positions of 51.18 million shares and net value of Foreign Inflow dropped by 0.61 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistani investors remained in net selling positions of 0.24 and 50.98 million shares. While on the other side Local Individuals, Companies, Banks and Brokers remained in net long positions of 2.86, 3.45, 0.69 and 50.43 million shares respectively but Mutual Funds and Insurance Companies remained in net selling positions of 4.77 and 0.89 million shares.

Asia shares find support, still waiting on stimulus
Asian shares edged ahead on Thursday after Wall Street got a boost from strong retail results, while bonds retreated as U.S. policy makers sounded conflicted on whether to cut interest rates as sharply as markets were wagering. MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1%, continuing the see-saw pattern of recent sessions. Japan’s Nikkei added 0.4% and Australian shares 0.3%, while E-Mini futures for the S&P 500 rose 0.2%. On Wall Street, the Dow had gained 0.93%, while the S&P 500 rose 0.82% and the Nasdaq 0.90%. The bounce was led by retailers, with Target Corp surging 20% and Lowe’s Cos Inc 10% after upbeat results.
Another hurdle crossed as FATF meetings loom
The Asia-Pacific Group — a regional affiliate of the Financial Action Task Force (FATF) — has adopted Pakistan’s third Mutual Evaluation Report (MER) on strengthening of anti-money laundering and countering financing terrorism (AML/CFT) safeguards and is expected to make public its assessment shortly. The Ministry of Finance on Wednesday said the 22nd Annual Meeting of the Asia-Pacific Group on Money Laundering (APG), being held in Canberra, Australia, adopted the third MER that covered the period between February and October 2018. A senior level delegation from Pakistan led by State Bank Governor Dr Reza Baqir attended the meeting.
Local POL production dips by 8.35pc in FY19
The overall production of petroleum commodities has witnessed a decrease of 8.35 percent during the fiscal year 2018-19 as compared to corresponding period of 2017-18. The POL products that showed negative growth include Jet Fuel Oil the production of which decreased by 9.54 percent during the period under review, Pakistan Bureau of Statistics reported. Similarly, the production of Kerosene Oil, High Speed Diesel, Furnace Oil, Jute Batching Oil and Solvant Naptha, witnessing decrease of 1.14 percent, 9.84 percent, 11.92 percent, 14.48 percent and 26.90 percent respectively, However, the production of Motor Spirit oil has increased by 3.22 percent, Diesel oil 16.65 percent, Lubricating oil 9.78 percent and Liquefied Petroleum Gas 17.23 percent during the period under review.
CCP sets aside findings of its own inquiry
The Competition Commission of Pakistan (CCP) while setting aside its Show Cause Notice issued to Pharma Bureau for prima facie cartelisation, has warned that the pharmaceutical sector is under its watch and any collusive or anti-competitive activity shall be strictly dealt with. In yet another instance of impartial and unbiased enforcement, the CCP’s bench has set aside the findings of its enquiry in the matter of alleged violation of Section 4 of the Competition Act, 2010 by the Pharma Bureau.
Five IPPs earned Rs40b extra profit in last seven years
Sub-Committee of Senate Standing Committee on Power has noted that five IPPs earned Rs40 billion extra profit during past seven years and directed NEPRA to register criminal cases against those IPPs which have provided wrong information regarding their profits. Sub-Committee of Senate Standing Committee on Power, which met with Nauman Wazir in the chair, here directed NEPRA to conduct the audit of all the IPPs, register criminal cases against those IPPs, which have provided wrong information about their profits, and confiscate their assets. The convener of the committee said that the data of five IPPs provided by NEPRA shows that from 2011 to 2018 they have made Rs 40 billion extra profit. There are total 186 IPPs registered with NEPRA. The committee observed that extra tariff is being charged by the IPPs over and above 15% approved by NEPRA. Nishat Power Limited earned Rs 7.11 billion extra profit, Nishat Chunian Power Limited Rs 7.82 billion, Atlas Power Limited Rs 3.79 billion, Attock Generation Rs 11 billion and Liberty Power Rs 9.24 billion.

The Benchmark KSE100 index have pulled back sharply in last three days but now it’s expected that current bullish sentiment is going to expire because index is going to face a strong resistance between 31,500 and 31,700 points. As of now index is being capped by a strong horizontal resistant region along with a descending trend line and these both elements would try to push index backward for a correction and in case of pressure index would try to find supports at 30,200 and 29,700 but closing below 29,700 points would add further pressure on market and it could be dragged towards new low. Therefore it’s recommended to stay cautious and post trailing stop losses on existing long positions.