PSX Daily Market Review - 26th Aug 2019

Trading volume at PSX floor dropped by 30.97 million shares or 11.83% on DoD basis, whereas the benchmark KSE100 index opened at 31,962.97, posted a day high of 32,100.56 and a day low of 31,225.06 points during last trading session while session suspended at 31,350.01 points with net change of -534.44 points and net trading volume of 174.37 million shares. Daily trading volume of KSE100 listed companies dropped by 1.66 million shares or 0.94% on DoD basis.
Foreign Investors remained in net selling positions of 0.38 million shares but net value of Foreign Inflow increased by 0.76 million US Dollars. Categorically, Foreign Individual and Foreign Corporate remained in net buying positions of 0.06 and 0.92 million shares but Overseas Pakistani investors remained in net selling positions of 1.35 million shares respectively. While on the other side Local Individuals and Local Companies remained in net long positions of 6.94 and 0.75 million shares but Banks, NBFCs, Mutual Funds, Brokers and Insurance Companies remained in net selling positions of 0.03, 0.21, 2.16, 3.73 and 1.65 million shares respectively.

Asian shares slugged, bonds bought amid trade gloom
Asian shares sank on Monday as the latest salvo in the Sino-U.S. trade war shook confidence in the world economy and sent investors steaming to the safe harbors of sovereign bonds and gold, while slugging emerging market currencies.Yields on benchmark 10-year Treasury debt dropped to their lowest since mid-2016, while gold hit its highest since April 2013 as risk was shunned. There was some relief that China fixed the yuan’s midpoint at a relatively steady 7.0570 per dollar when it had been trading as weak as 7.1850 offshore, countering concerns Beijing would let the currency slide to keep exports competitive. MSCI’s broadest index of Asia-Pacific shares outside Japan still shed 2.0%, and Australia 1.5%. Japan’s Nikkei lost 2.3%, while Shanghai blue chips fell 1.2%. E-Mini futures for the S&P 500 eased 0.8%, and EUROSTOXX 50 futures 1.1%.
Cabinet body likely to approve CPEC Authority establishment today
The Cabinet Committee on China-Pakistan Economic Corridor (CCoCPEC) is likely to approve the establishment of the CPEC Authority today (Monday). The Cabinet Committee on CPEC (CCoCPEC) is meeting here to discuss four-point agenda related to overall progress on CPEC, official sources told The Nation on Sunday. The CCoCPEC is likely to recommend the establishment of the CPEC Authority to the federal cabinet for its approval, said the source, According the agenda the Cabinet Committee on CPEC will review the progress on CPEC projects, establishment of CPEC authority, briefing on development agreement of Rashakai Special Economic Zone (SEZ) and preparation for the upcoming Joint Cooperation Committee of CPEC meeting. The 9th JCC is scheduled to be held in October this year in Pakistan.
CDNS investors encash Rs40,000 bonds worth Rs65b
The investors have withdrawn Rs65 billion out of total stock of Rs259 billion investment from Central Directorate of National Savings (CDNS) after the federal government decision to discontinue the Rs40,000 prize bonds. Senior official of CDNS said now remaining the Rs40,000 prize bonds offered by the CDNS are worth Rs194 billion which may decrease more in coming months after withdrawal from banks. The government has frozen the prize bonds of Rs40,000 in previous months when the State Bank of Pakistan (SBP) has issued circular and directed all commercial banks to stop selling Rs40, 000 prize bonds from June 24 onwards. According to the notification the SBP directed that national Prize Bonds of Rs40, 000 denominations shall not be sold after June 24, and will not be encashed or redeemed after March 31, 2020.
Cotton woes and Indian import ban
As the cotton crop enters a crucial phase of its life cycle, it raises assorted concerns for the planners and the textile industry. Both are keeping their fingers crossed as the weather turns anti-cotton — long spells of hot and humid weather, worsened by floods, causing an increase in pest pressure. And September, normally considered a make or break month, is about to start. The situation in Punjab, which contributes over 70 per cent of the crop, is more worrisome. The government has set a production target of 15 million bales this year with a goal of 25m bales by 2025. Therefore, Punjab has been told to jack up its production to 10m bales from 6.8m bales last year — a 32pc increase. The current year represents the first year in achieving this colossal target. And the government is already failing.
FCAG lauds 24-hour opening of Torkham Border
President of Frontier Customs Agents Group (FCAG) and former senior vice president of Pak-Afghan Joint Chamber of Commerce and Industry Ziaul Haq Sarhadi on Sunday welcomed keeping Pak-Afghan Torkham Border open for 14 hours daily to improve bilateral trade. He hoped that the move will play a vital role to boost mutual trade between Pakistan and Afghanistan. In a press statement issued here, Sarhadi said that in recent years, a declining trend in bilateral trade between Pakistan and Afghanistan was witnessed due to certain steps taken by both Islamabad and Kabul. However, he said that this new decision by the government of Pakistan to keep operations at the Torkham from 600 Am to 800 PM (14 hours) daily from August 19, 2019. It would help achieving bilateral trade target between Pakistan and Afghanistan. He added the government step would also enhance export to Afghanistan and other regional countries.

The Benchmark KSE100 index had not succeeded in penetration above its major resistant region of 32,200 points during last trading session and have formatted a cloud on daily chart which indicates a reversal pattern may start but as a morning star have occurred on weekly chart so index would try to resist against bearish pressure until this weekend and if a cheat pattern would succeed in taking place then market would start moving towards new low. As of now index would face resistances at 31,800 and 32,300 points while on flipside it would try to find some ground at 30,760 and 30,200 points during current trading session. It's recommended to stay cautious and post trailing stop loss on long positions.

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