PSX Daily Market Review - 27th July 2017

Foreign Investors remained in a net selling position of 3.4 million shares and a net value of Foreign inflow dropped by 0.48 million Us Dollars. Categorically, Foreign Corporate and Overseas Pakistani investors remained in net selling position of 3.13 and 0.28 million shares. While on the other side Local Individuals, Banks and Mutual Funds remained in net buying position of 2.49, 2.83 and 0.38 million shares respectively but Local Companies and Brokers remained in net selling position of 0.9 and 0.12 million shares.

Stocks, bonds and commodities were all on a roll in Asia on Thursday, as bulls scented a softening in the Federal Reserve confidence on inflation that promised to keep U.S. interest rates low for longer than some had expected. MSCI broadest index of Asia-Pacific shares outside Japan climbed 0.9 percent to heights not seen since December 2007. It has gained over 5 percent so far this month. South Korea and Japanese Nikkei both added 0.2 percent, while Australia put on 0.3 percent. Stocks in the Philippines were at a one-year peak and Hang Seng index added 0.3 percent to push above 27,000.
The International Monetary Fund (IMF) announced on Wednesday it will launch a new tool to support governments in financial trouble — but one that involves no money — formalising a step it took last week for Greece. Instead of providing cheap loans to member countries, the new IMF tool will serve as a good housekeeping seal of approval for a government’s reform program. With that approval in hand governments would be more likely to be able to access other forms of financing from banks and bond markets, the IMF said in a statement. “The new instrument is designed to help countries unlock financing from official and private donors and creditors,” the IMF said.
The government continued its policy to take foreign loans to build its foreign exchange reserves and repay previous loans, as the country had obtained massive foreign loans worth $10.6 billion during FY2016-17. The government borrowing had gone beyond the target of $8 billion for the last fiscal year, as the country had taken $10.6 billion loan. The government had borrowed massively to repay previous loans and enhancing the country’s foreign exchange reserves. Pakistan’s external debt had already surged to $58 billion by the end of May. Meanwhile, the domestic debt was Rs12,956 billion. The government is paying huge amount on interest payment and previous loans. The government had spent $4.8 billion on repaying external loans and the interest payment during 11 months (July-May) of the year 2016-17.
The Executive Committee of the National Economic Council (Ecnec) on Wednesday approved seven projects costing Rs134.39 billion. The Ecnec, in a meeting chaired by Finance Minister Ishaq Dar, approved seven development projects for various areas in the country. The Ecnec considered and approved the Punjab Tourism for Economic Growth Project. The project aims at promotion of religious and domestic tourism by providing infrastructure facilities like wide access roads, tourism facilitation, provision of rest areas and other public convenience facilities along with providing training to tourism related persons in various cities of Punjab. These include Lahore, Gujranwala, Taxila, Nankana, Sheikhupura, Narowal, Bahawalpur, Chakwal, Mithan Kot etc. The total cost of the project is Rs5,775 million. The CAREC Corridor Development Investment Programme was discussed and approved by Ecnec at a cost of Rs21,041 million. The project aims at dualisation and rehabilitation of 208 KMs of three road sections on the N-55 in Sindh (Petaro to Sehwan & Ratodero to Shikarpur-dualisation work) and Khyber Pakhtunkhwa (Darra Adam Khel to Peshawar-Rehabilitation Work).

The Market is expected to remain volatile today. We advise Traders to exercise caution. Buying on dips and booking gains on strength is recommended.