PSX Daily Market Review - 25th May 2018

Trading volume at PSX floor dropped by 4.16 million shares or 3.17% on DoD basis during last trading session, whereas the benchmark KSE100 Index opened at 42,776.83, posted a day high of 43,835.72 and a day low of 42,449.82 during last trading session. The session suspended at 42,536.16 with net change of 236.09 and net trading volume of 68.99 million shares. Daily trading volume of KSE100 listed companies dropped by 23.28 million shares or 25.23% on DoD basis.
Foreign Investors remained in net selling position of 17.60 million shares and net value of foreign Inflow dropped by 8.01 million US Dollars. Categorically, Foreign Individuals remained in net buying positions of 0.5 million shares but Foreign Corporate and Overseas Pakistanis Investors remained in net selling positions of 16.13 and 1.52 million shares. While on the other side Local Individuals, Local Companies, Banks, Mutual Fund and Insurance Companies remained in net buying positions of 0.03, 5.09, 4.80, 2.62 and 7.03 million shares but, NBFCs remained in net selling positions of 0.3 million shares respectively.

Asian shares shaky after Trump ditches summit with North Korea
Asian shares were slightly weaker on Friday amid fragile market sentiment after U.S. President Donald Trump called off a key summit with North Korea, though investor concerns were softened by expectations the two countries may still continue dialogue. MSCI’s broadest index of Asia-Pacific shares outside Japan ticked down. South Korea’s Kospi fell 0.65 percent. Japan’s Nikkei fell 0.3 percent. On Wall Street, the S&P 500 ended 0.2 percent lower on Thursday, though it clawed back a large part of its earlier loss of 0.95 percent. Safety bids boosted bond prices globally, driving yields lower. The 10-year U.S. Treasuries yield stood at 2.988 percent, falling further from a seven-year high of 3.128 percent hit a week ago. The German 10-year Bund yield hit a 4-1/2-month low of 0.461 percent, having fallen more than 11 basis points so far this week.
Miftah sees $2bn inflow before govt term ends
The government is expecting up to $2 billion inflows from a friendly country before the caretaker prime minister sets in next week. Finance Minister Dr Miftah Ismail told Dawn that he expects $1-2bn before the tenure of the PML-N government ends on May 31. He declined to identify the source and exact amount of inflows, saying things were in process but insisted one to two billion dollars would be added to the country’s foreign exchange reserves. Informed sources, however, said inflows were expected from a state-owned Chinese Bank and would support declining foreign exchange reserves which stood at $17.067bn as of May 11 - $10.8bn held by the State Bank of Pakistan and $6.268bn by commercial banks.
China gives Pakistan $1.6b credit line
China has given Pakistan a credit line worth $1.6 billion to stave off a balance of payments crisis, two State Bank of Pakistan sources said on Thursday, with cash earmarked for boosting fast-depleting foreign currency reserves. Two SBP sources told Reuters the credit facility that accompanies a currency swap agreement between SBP and China’s central bank has been hiked to 20b yuan ($3.13b) from 10b yuan. “This arrangement has been finalised,” said one SBP source, who spoke on condition of anonymity. A second source confirmed the agreement and the figures. Meanwhile, The People's Bank of China, the country's central bank, said Thursday it had extended a currency swap agreement with the State Bank of Pakistan. The swap is sized at 20 billion yuan (3.1b US dollars) or 351 billion Pakistani rupees, according to a statement from the bank.
CDWP approves 24 projects of Rs19.6b
Central Development Working Party (CDWP) has Thursday approved 24 projects of worth Rs19.6 billion while 12 projects worth Rs781.39 billion, including the up-gradation of railway ML-I, were referred to Executive Committee of National Economic Council (Ecnec) for further proceeding. The CDWP meeting was held under the chairmanship of Planning Commission Deputy Chairman Sartaj Aziz and was attended by Secretary Planning, senior officials from federal and provincial governments. The projects presented for approval include energy, health, education, manpower, governance, physical planning and housing, science and technology, transport & communications, water resources, agriculture and food, environment, information technology, nutrition, and mass media. In addition, two position papers were presented in the meetings. In energy section, three projects were presented out of two projects were approved and one was referred to Ecnec.
FBR to get Rs25b extra revenue
The Federal Board of Revenue (FBR) is expecting to generate additional revenue of around Rs25 billion during outgoing fiscal year due to the enforcement of new rates of federal excise duty and customs duty from the last week of the current month. The increase in customs duties and federal excise duties rates has been enforced from the next day of Acting President Sadiq Sanjrani's consent to the Finance Bill 2018. Two excise duty measures have also been effective. Firstly, increase in the FED on cigarette has been enforced, while the FBR has also increased federal excise duty on cement from Rs 1.25 per kg to Rs 1.50 per kg. The cigarettes prices would increase by the around 6 percent and the prices of 50 kilogram bag of cement will further go up by Rs12.50. The customs duties on 7,200 tariff lines have also increased by another 1pc. "We are expecting to generate around Rs25 billion from these measures during current fiscal year," said an official of the FBR.

The Benchmark KSE100 Index have entertained its supportive regions very well during second last trading session and it have bounced back after getting support from a horizontal supportive region along with two supportive trend lines. But it was expected on technical grounds that index would have to bounce back either on intraday basis or daily chart because a correction was due since last 4000 points. For current trading session it’s expected that index would try to remain under pressure below 42930 and if succeeded to penetrate then next targets would be 43,045 and 43,330 where index would face strong resistances. If current bullish pull back would continue above 43,330 then this momentum would be expired by 50% or 61.8% correction levels at 43,777 and 44,305 in coming trading session. But its recommended to avoid any over optimistic buying sentiment and wait for a confirmation of reversal on daily and weekly chart because if index would start falling after completing its correction this time then a new low of this calendar year could be witnessed. Daily and Weekly Stochastic have generated bullish crossovers but still awaiting confirmation on today’s closing but hourly momentum indicators are indicating a dip.