PSX Daily Market Review - 26th June 2019

Trading volume at PSX floor increased by 66.09 million shares or 83.9% on DoD basis, whereas the benchmark KSE100 index opened at 34,416.62, posted a day high of 34,450.86 and a day low of 33,984.60 points during last trading session while session suspended at 34,190.62 points with net change of 129.34 points and net trading volume of 81.67 million shares. Daily trading volume of KSE100 listed companies increased by 48.86 million shares or 84.1% on DoD basis.
Foreign Investors remained in net selling positions of 1.34 million shares but net value of Foreign Inflow increased by 0.91 million US Dollars. Categorically, Foreign Individual, Corporate and Overseas Pakistani investors remained in net selling positions of 0.26, 1.04 and 0.04 million shares. While on the other side Local Individuals, Banks, Mutual Funds and Insurance companies remained in net selling positions of 46.99, 5.82, 2.32 and 1.37 million shares respectively but Local Companies and Brokers remained in net buying positions of 38.58 and 19.61 million shares.

Asia stocks retreat after Fed tempers aggressive rate cut expectations
Asian stocks retreated on Wednesday and the dollar inched up from three-month lows after Federal Reserve officials tempered expectations in the markets for aggressive monetary easing. .Fed Chair Jerome Powell on Tuesday said the central bank is “insulated from short-term political pressures,” pushing back against U.S. President Donald Trump’s demand for a significant rate cut. Powell, however, said Fed policymakers are wrestling with questions on whether uncertainties around U.S. tariffs, Washington’s conflict with trading partners and tame inflation require a rate cut. Separately, St. Louis Fed President James Bullard told Bloomberg Television he does not think the U.S. economy is dire enough to warrant a 50-basis-point cut in July, even though he pushed to lower rates last week.
Oil import bill surges to $13.14 billion in 11 months
Pakistan’s oil import bill went up to $13.14 billion during eleven months (July to May) of the ongoing fiscal year. The country’s oil import bill has gone up by 1.6 percent to $13.14 billion during July to May period of the year 2018-19. However, Pakistan’s overall imports have declined by 8.5 percent due to the government’s policies. The country has imported goods worth of $50.5 billion during July to May period of the year 2018-2019 as against $55.14 billion in the same period of last year. According to Pakistan Bureau of Statistics (PBS), the import of petroleum products was recorded at $5.6 billion, petroleum crude at $4.19 billion and natural gas liquefied at $3.05 billion and petroleum gas liquefied at $239 million. Oil import bill is the major component of the overall import bill, which declined the country’s foreign exchange reserves. However, the country had already finalized defer oil payment facility with Saudi Arabia and Islamic Development Bank to avert pressure on foreign exchange reserves. The oil facility provided by Saudi Arabia worth $3.2 billion per year for three years would become operational on July 1. Similarly, the Islamic Development Bank had also provided $1.2 billion deferred oil facility to Pakistan.
President for enhancing Pak-Azerbaijan trade
President Dr. Arif Alvi has emphasized the need to enhance the volume of bilateral trade between Pakistan and Azerbaijan. Talking to Ambassador of Azerbaijan to Pakistan, Ali Fikrat Oglu Alizada here on Tuesday, the president also emphasised the need for exploring investment opportunities in energy and tourism sectors. The president said Pakistan attaches great value to its cordial and fraternal relations with Azerbaijan as the bilateral relations were rooted in shared faith, culture and heritage. Appreciating Azerbaijan’s support to Pakistan on Jammu and Kashmir, the president said that Pakistan was desirous of further strengthening its existing excellent bilateral relations for the benefit of the people of both the countries. He underlined that the present state of bilateral economic cooperation was not commensurate with the true trade potential and emphasized the need to enhance the volume of bilateral trade and to explore possibilities of investment in energy and tourism sectors.
China recommends establishment of Special Economic District in Gwadar
China has recommended the establishment of Special Economic District (SED) in Gwadar and the application of laws and regulations totally different from the rest of Pakistan and on the style of the Shenzen model in China, The Nation has learnt reliably. The Chinese company Fourth Harbor Design Institute (FHDI) which has prepared the proposed integrated Gwadar Smart Port Master City Plan has recommended the application of Chinese city of Shenzen’s model laws and regulations over the entire area of 1,201 square kms in Gwadar Special Economic District (SED) instead of Pakistani laws and regulations, official sources confided. The source said that the report prepared by the Chinese company contains 16 chapters on land use planning, urban and transport infrastructure planning, energy, water and waste water, socio economic planning, environmental disaster risk management, community participation and empowerment, guaranteed development for vulnerable areas, development of non concession areas, development of a free port, laws on ownership of properties, institutional framework for GDA, responsibilities of government agencies and financial management.
No new tax imposed on ghee, flour: minister
State Minister for Revenue Hammad Azhar has defended his government’s decision to increase tax on sugar, but denied imposing any new tax on cooking oil, ghee, flour and raw meat. While the opposition in the National Assembly has been asking the government to take back its tax-heavy budget, Pakistan Tehreek-i-Insaf stalwart and former finance minister Asad Umar has also asked his government to reconsider the decision to increase tax on sugar, ghee and cooking oil. Mr Umar has also called for an investigation as to why sugar prices are on the rise. But it appears that nobody in the government now listens to him. On Tuesday evening, Mr Azhar, while winding up the discussion on the budget for 2019-20, acknowledged having increased the tax on sugar from 11 per cent to 17pc and claimed the move would result in a mere increase of up to Rs3.5 per kilogram.

The Benchmark KSE100 index have not succeed in maintaining above 35,000 points and have dropped down towards its initial supportive region of 34,400 points where it would try to find support from a horizontal supportive region would be penetrated also in downward direction then index can take a dip towards 33,900 points. Index have generated a cheat pattern during last trading session in response of a morning shooting star but daily and hourly momentum indicators are still in bullish mode because hourly stochastic and MAORSI both have generated bullish crossovers and these would try to push index upward. It's recommended to stay cautious because index is trying to maintain 61.8% correction of its last bullish rally since last week and if it would succeed in penetration below 34,000 points then sentiment would be changed on short term basis and bears would try to push index towards 33,760 and 33,500 points. While on flipside now index would face difficulty in penetration above 34,860 and 35,000 points as these both regions would react as strong resistances.
For current trading session PSO, ATRL, DGKC, MLCF, ISL and PAEL seems very attractive for buying because these scripts have closed near their strong supportive regions and long positions with strict stop loss could be beneficial in these scripts.