PSX Daily Market Review - 22nd July 2019

Trading volume at PSX floor increased by 34.14 million shares or 39.06% on DoD basis, whereas the benchmark KSE100 index opened at 32,251.51, posted a day high of 32,549.31 and a day low of 31,901.28 points during last trading session while session suspended at 32,458.77 points with net change of 149.23 points and net trading volume of 106.39 million shares. Daily trading volume of KSE100 listed companies increased by 34.71 million shares or 48.43% on DoD basis.
Foreign Investors remained in net buying positions of 2.43 million shares and net value of Foreign Inflow increased by 2.27 million US Dollars. Categorically, Foreign Individuals remained in net selling positions of 0.05 million shares respectively but Foreign Corporate and Overseas Pakistanis remained in net buying positions of 0.93 and 1.56 million shares respectively. While on the other side Local Companies, Banks and Mutual Fund remained in net selling positions of 0.55, 7.63 and 17.44 million shares respectively, but Local Individuals, Brokers and Insurance Companies remained in net buying positions of 18.67, 1.46 and 3.24 million shares.

Asia stocks dip on likely smaller Fed rate cut, oil gains
Asia stocks eased on Monday as investors reduced expectations of an aggressive interest rate cut by the Federal Reserve, while heightened Middle East tensions following an Iranian seizure of a British tanker lifted crude oil prices. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.1%. South Korea's KOSPI .KS11 shed 0.3%, Australian stocks lost 0.2% and Japan's Nikkei .N225 fell 0.5%. Global equity markets had risen briefly towards the end of last week after dovish comments by New York Fed President John Williams boosted the prospect of the central bank lowering rates by 50 basis points at its July 30-31 meeting. But the stock markets gave back those gains on Friday, with Wall Street shares ending in negative territory, after the New York Fed walked back Williams’ comments by saying his speech was not about potential policy action at the upcoming Fed meeting.
Gas network under stress due to low demand
The country’s gas pipeline network is facing an ‘emergency situation’ as supplies substantially outstrip consumption owing to lower than committed demand in the power system. “This is a very dangerous situation for the gas network as pipelines face extreme backpressure at LNG [liquefied natural gas] offloading points from two re-gasification terminal,” a senior official in the gas network told Dawn. He said the gas system started with line-pack of 4,810 million cubic feet per day (mmcfd) on Sunday and closed at 4,750 mmcfd in the evening. “This is very unsafe level. The pipelines and processing systems are at risk and can rupture if gas off-take by key consumers is not increased,” he said. Top among them is the power sector on whose demand most of the LNG imports are lined up. The power sector is currently utilising about 670 mmcfd of gas (both domestic and imported) against its allocation of about 1,160 mmcfd. Likewise, the industrial sector is drawing about 250 mmcfd against its allocated share of 300 mmcfd.
Pakistan’s exports to increase to $36 billion in 5 years: IMF
The International Monetary Fund (IMF) has projected that Pakistan’s exports will increase to US $ 36.7 billion in five years by the year 2023-24. The pressure of current account deficit on the country will also ease out gradually from its peak US $ 19.9 billion in 2017-18 to as low as $6.95 billion in current fiscal year while US $ 5.49 billion in 2020-21, the IMF said in its recently published staff report on Pakistan. The trade deficit would also decline to US $ 24.9 billion in current fiscal year from US $ 29.46 billion in 2018-19, however it will further go up to US $ 26.8 billion mainly on the back of growing import needs in coming years.
Interest-free loans to be given to farmers
Secretary Agriculture Punjab Wasif Khursheed said that provincial government would offer interest free loans among 174,441 farmers, with an aim to promote agriculture sector. Addressing a meeting on Sunday the Secretary stated that Rs 11.30 biilion would be distributed among the farmers. He said that all possible resources were being utilized for achieving cotton targets. Officers of agriculture department were visiting different fields to check crops and resolve farmers problem. Similarly, the crops of 226,832 farmers were insured and the programme was in progress in 18 districts of the province. He said that government is also focusing on high value agriculture. Processing plants are being installed to promote vegetable and fruit culture. Further he said that the government is also offering subsidy worth billions of rupees on inputs including fertilizers and incentive on cultivation of different crops.
Banks allowed to do foreign currency business with public
The State Bank of Pakistan (SBP) has laid the foundation to eliminate exchange companies from the currency business by allowing banks and their entire branches to buy and sell foreign currencies with public across the country. The SBP on Saturday issued revised chapters of Foreign Exchange (FE) Manual providing details about the currency business while assigning the role of exchange companies to banks. Earlier, the banks were not allowed to sell or buy foreign currencies directly from public except for those having their own exchange companies. The SBP did not say anything regarding the existence or future role of exchange companies but feel threatened with the latest development.

The Benchmark KSE100 index is trying to bounce back after getting support from a horizontal supportive region and right now it's expected that index would try to continue its bullish momentum on daily and intraday chart and on due course it will face resistances at 32,800 and 33,063 points. It's recommended to practice caution while initiating long positions and post trailing stop loss on existing long positions. Daily momentum indicators are trying to gain momentum and it's expected that if index would succeed in closing above 32,700 points on daily chart then a sharp spike towards 34,000 and 34,500 points would be witnessed. While on flipside index would try to find ground at 32,000 and 31,700 points but breakout below 31,700 points would call for a 30,000 points. It's recommended to stay on long side until index slide below 31,700 points.