PSX Daily Market Review - 27th June 2019

Trading volume at PSX floor increased by 14.83 million shares or 10.24% on DoD basis, whereas the benchmark KSE100 index opened at 34,261.32, posted a day high of 34,290.58 and a day low of 33,371.94 points during last trading session while session suspended at 34,088.56 points with net change of -102.06 points and net trading volume of 115.48 million shares. Daily trading volume of KSE100 listed companies increased by 8.52 million shares or 7.97% on DoD basis.
Foreign Investors remained in net buying positions of 43.63 million shares but net value of Foreign Inflow increased by 2.67 million US Dollars. Categorically, Foreign Individual, Corporate and Overseas Pakistani investors remained in net buying positions of 0.02, 0.54 and 43.07 million shares. While on the other side Local Individuals, Banks and NBFCs remained in net buying positions of 17.38, 29.20 and 0.15 million shares respectively but Local Companies, Mutual Fund, Brokers and Insurance Companies remained in net selling positions of 4.69, 4.76, 74.03 and 6.96 million shares.

Asian shares creep higher on hopes of Sino-U.S. trade truce
Asian share markets turned higher on Thursday following a media report the United States and China have tentatively agreed to a truce in their trade war, ahead of a closely-watched meeting between the two nations this weekend. The South China Morning Post (SCMP), citing sources, said in Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports. On Wednesday, U.S. President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail. “But the truce cake seems to have been baked,” the SCMP cited one of its sources as saying. Hopes the world’s two biggest economies would finally reach an agreement were enough to cheer investors, sending MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.6%.
ECC raises gas price to fulfil IMF condition
In order to fulfill one of the conditions of the International Monetary Fund (IMF), the government has approved to increase the price of gas that would further burden the masses. The Economic Coordination Committee (ECC) of the Cabinet, which met under the chair of Adviser to Prime Minister on Finance Abdul Hafeez Shaikh on Wednesday, has given the approval to increase the gas prices. The government has fulfilled one of the conditions of the IMF before its Executive Board meeting that would be held on July 3 to approve loan programme for Pakistan. The ECC has approved to increase the prices of natural gas tariff for domestic consumers and on average 31pc for all other categories. According to the officials, the decision would help to generate about Rs510 billion next fiscal year.
Repatriation of profit dips 25pc
Outflow of profits and dividends from the country fell by 25 per cent, dropping by over $560 million during the first 11 months of the current fiscal FY19. The State Bank of Pakistan on Tuesday reported that the outflow profits during July-May clocked in at $1.673 billion, from $2.237bn in the same period of last year. The highest repatriation of $256.5 million was in the telecommunications sector, down from last year’s $327.8m in the same period. Financial sector posted a decrease in outflow by 10.35pc to $251m during 11MFY19, as against $280m in same period last year. Meanwhile, oil and gas exploration noted an outflow of $216m, declining from $246m.
PTI proves its hold on NA as opposition gears up for drive
The Pakistan Tehreek-i-Insaf (PTI) continues to maintain its numerical strength in the National Assembly after 10 months in power, as the lower house of parliament on Wednesday conveniently rejected the cut motions of the opposition parties with their main leadership preferring the multi-party conference to the crucial vote. While Prime Minister Imran Khan attended the sitting for some time, he left the house after realising that his presence might not be necessary to ensure the presence of the treasury members. This later proved to be true when the government defeated the opposition by rejecting their more than 100 cut motions on the allocations for Cabinet Division with a 160-126 vote. Later, the house rejected all remaining cut motions through voice vote and approved 92 Demands of Grants presented by Minister of State for Revenue Hammad Azhar for various institutions, divisions and ministries.
Runaway dollar confounds money market
Despite assurance of the new governor of the central bank that there would be no free float, the rupee fell to a new record low on Wednesday as the US dollar hit an all-time high of Rs163 in interbank trading. The day saw a decline of 3.8 per cent in the value of the rupee against the dollar. It has lost about 35pc since May 2018 when the dollar traded at Rs121. The surprise big devaluation of the local currency took place after declaration by the State Bank of Pakistan governor that the exchange rate would be market-based and that the free float was not suitable for the country’s economy. “There was no State Bank and no interference to bring calm in the volatile exchange rate market,” said a senior banker, who added that the dollar traded as high as Rs163 in the interbank market. He said the market began trading the dollar Re1 higher than the previous day and soon it was felt that there was no barrier to move forward.

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.