Previous Session Recap
Trading volume at PSX floor dropped by 10.40 million shares or 5.76% on DoD basis during last trading session, whereas the benchmark KSE100 Index opened at 45,769.04, posted a day high of 45,780.94 and a day low of 45,427.19 during last trading session. The session suspended at 45,460.87 with net change of -257.47 and net trading volume of 86.79 million shares. Daily trading volume of KSE100 listed companies dropped by 17.85 million shares or 17.06% on DoD basis.
Foreign Investors remained in net buying position of 1.02 million shares and net value of Foreign Inflow increased by 1.57 million US Dollars. Categorically, Foreign Corporate Investors remained in net buying positions of 5.77 million shares but Overseas Pakistanis remained in net selling positions of 4.75 million shares. While on the other side Local Individuals and Banks remained in net selling positions of 19.65 and 21.8 million shares but Local Companies, NBFCs, Mutual Funds, Brokers and Insurance Companies remained in net buying positions of 12.48, 20.77, 0.54, 4.37 and 1.2 million shares respectively.
Analytical Review
Asian shares edge higher after U.S. tech shares bounce
Asian shares edged higher on Friday, after U.S. equities were buoyed by solid quarterly earnings and a rebound in technology stocks, while the euro languished near three-month lows after the European Central Bank kept interest rates unchanged. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, while Japan’s Nikkei gained 0.4 percent. South Korea’s KOSPI briefly rose more than 1 percent and set a one-month high, helped partly by hopes that a summit meeting between the leaders of North and South Korea would end their decades-long conflict and ease tensions over North Korea’s nuclear weapons program. After paring some of their gains, South Korean equities were up 0.7 percent, while the South Korean won rose 0.3 percent against the dollar in onshore trade.
Rs309b for Mohmand dam approved
The Economic Coordination Committee of the Cabinet on Thursday approved the ‘Ramazan Relief Package’, wherein 19 daily use items will be sold at subsidised rates at Utility Stores Corporation outlets across the country during the upcoming holy month. On the other hand, the ECNEC approved Mohmand Dam Hydropower Project at a cost of Rs309.558 billion. Prime Minister Shahid Khaqan Abbasi chaired the ECC meeting that approved the subsidy. These subsidised items include flour, sugar, cooking oil and ghee, grams, basen, dates, rice, squashes, milk and tea. The government will provide a subsidy of Rs1.733 billion under the Ramzan Relief Package– 2018, but it is less than the subsidy of Rs2 billion set aside last year. The prime minister directed that under the package, daily use items should be provided at lower rates as compared to market prices.
Dollar short in Lahore market
The Pakistani currency on Thursday was traded at Rs118.70 against one dollar, showing the strength by almost 50 paisas from previous closing of Rs 119.20 on Wednesday. In a survey conducted by this scribe, it was found that dollar was very short in all major currency markets of the provincial capital, as most of the dealers were refusing the greenback in exchange of rupees. Money market experts said that dealers are holding the US dollar in the hope that it would jump further to Rs125 in the tenure of interim government. However, the rupee was almost unchanged against the dollar for buying and selling at Rs 115.62 and Rs 115.63 respectively, they said. Business community, expressing its grave concern over the rising value of dollar, urged the government to take immediate steps for bringing down this rate in line with the official rates.
3.81pc agri growth highest in 13 years
Pakistan achieved agriculture growth of 3.81 percent during fiscal 2017-18 which is highest growth in the past 13 years, revealed Pakistan Economic Survey. The agriculture growth in 2017-18 was higher than the target of 3.5 percent and last year growth of 2.07 percent, Pakistan Economic Survey 2017-18 launched here said. The cotton crop has share of 1.0 percent in GDP and contributes 5.5 percent in agriculture value-addition. During 2017/18, cotton production was recorded at 11.935 million bales, registering 11.8 percent increase over the production of 10.67 million bales during 2016-17. Wheat is the leading food grain of Pakistan occupying the largest area under single crop. Wheat accounts for 9.1 percent of the value added in agriculture and 1.7 percent of GDP in Pakistan. Wheat production during July-Feb (2017/18) stood at 25.49 million tons compared to 26.67 million tons in 2016/17, depicting 4.4pc decline.
Reliance on heavy loans continued
The incumbent government is continuing to take massive loans from both external and domestic sources to bridge the budget deficit and sustain foreign exchange reserves, as Pakistan’s public debt was recorded at Rs23.608 trillion by end of February 2018. “Total public debt provisionally stood at Rs 23,608 billion at end-February 2018 while total debt of the government was Rs 21,552 billion. Gross domestic debt recorded an increase of Rs1,093 billion during first eight months of current fiscal year while external debt increased by Rs 1,107 billion,” the latest Economic Survey 2017-18 stated on Thursday. In addition to financing of fiscal deficit, (i) increase in credit balances of the government with banking system; (ii) depreciation of Pak rupee against US dollar; and (iii) depreciation of US dollar against other international currencies contributed towards the increase in debt.
Asian shares edged higher on Friday, after U.S. equities were buoyed by solid quarterly earnings and a rebound in technology stocks, while the euro languished near three-month lows after the European Central Bank kept interest rates unchanged. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, while Japan’s Nikkei gained 0.4 percent. South Korea’s KOSPI briefly rose more than 1 percent and set a one-month high, helped partly by hopes that a summit meeting between the leaders of North and South Korea would end their decades-long conflict and ease tensions over North Korea’s nuclear weapons program. After paring some of their gains, South Korean equities were up 0.7 percent, while the South Korean won rose 0.3 percent against the dollar in onshore trade.
The Economic Coordination Committee of the Cabinet on Thursday approved the ‘Ramazan Relief Package’, wherein 19 daily use items will be sold at subsidised rates at Utility Stores Corporation outlets across the country during the upcoming holy month. On the other hand, the ECNEC approved Mohmand Dam Hydropower Project at a cost of Rs309.558 billion. Prime Minister Shahid Khaqan Abbasi chaired the ECC meeting that approved the subsidy. These subsidised items include flour, sugar, cooking oil and ghee, grams, basen, dates, rice, squashes, milk and tea. The government will provide a subsidy of Rs1.733 billion under the Ramzan Relief Package– 2018, but it is less than the subsidy of Rs2 billion set aside last year. The prime minister directed that under the package, daily use items should be provided at lower rates as compared to market prices.
The Pakistani currency on Thursday was traded at Rs118.70 against one dollar, showing the strength by almost 50 paisas from previous closing of Rs 119.20 on Wednesday. In a survey conducted by this scribe, it was found that dollar was very short in all major currency markets of the provincial capital, as most of the dealers were refusing the greenback in exchange of rupees. Money market experts said that dealers are holding the US dollar in the hope that it would jump further to Rs125 in the tenure of interim government. However, the rupee was almost unchanged against the dollar for buying and selling at Rs 115.62 and Rs 115.63 respectively, they said. Business community, expressing its grave concern over the rising value of dollar, urged the government to take immediate steps for bringing down this rate in line with the official rates.
Pakistan achieved agriculture growth of 3.81 percent during fiscal 2017-18 which is highest growth in the past 13 years, revealed Pakistan Economic Survey. The agriculture growth in 2017-18 was higher than the target of 3.5 percent and last year growth of 2.07 percent, Pakistan Economic Survey 2017-18 launched here said. The cotton crop has share of 1.0 percent in GDP and contributes 5.5 percent in agriculture value-addition. During 2017/18, cotton production was recorded at 11.935 million bales, registering 11.8 percent increase over the production of 10.67 million bales during 2016-17. Wheat is the leading food grain of Pakistan occupying the largest area under single crop. Wheat accounts for 9.1 percent of the value added in agriculture and 1.7 percent of GDP in Pakistan. Wheat production during July-Feb (2017/18) stood at 25.49 million tons compared to 26.67 million tons in 2016/17, depicting 4.4pc decline.
The incumbent government is continuing to take massive loans from both external and domestic sources to bridge the budget deficit and sustain foreign exchange reserves, as Pakistan’s public debt was recorded at Rs23.608 trillion by end of February 2018. “Total public debt provisionally stood at Rs 23,608 billion at end-February 2018 while total debt of the government was Rs 21,552 billion. Gross domestic debt recorded an increase of Rs1,093 billion during first eight months of current fiscal year while external debt increased by Rs 1,107 billion,” the latest Economic Survey 2017-18 stated on Thursday. In addition to financing of fiscal deficit, (i) increase in credit balances of the government with banking system; (ii) depreciation of Pak rupee against US dollar; and (iii) depreciation of US dollar against other international currencies contributed towards the increase in debt.
Market is expected to remain volatile therefore it'ss recommended to stay cautious while trading today.
Technical Analysis
Fibonacci correction have worked again on the Benchmark KSE100 index and have pushed index back in negative zone after completion of 38% correction of last bearish rally on daily chart. Index have slipped below a ascending trend line during last trading session and right now it’s expected that index would try to open with a negative gap and would found some ground near 45,190 and 44,860 points during current trading session. Index has a major supportive region ahead at 44,640 which fall on a descending trend line. Hourly and daily charts are showing a little bit strength but weekly momentum is in negative mode and it’s expected that index may witness a spike during current trading session because hourly Stochastic and MAORSI would try to bottom out today. Its recommended to stay cautious while trading today because a huge volatility is being expected in market a swing move may could be witnessed during current trading session.
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