PSX Daily Market Review - 27th Sep 2018

Trading volume at PSX floor increased by 24.78 million shares or 24.38% on DoD basis during last trading session, whereas the benchmark KSE100 Index opened at 41,073.37, posted a day high of 41,139.37 and a day low of 40,717.78 during last trading session. The session suspended at 40,909.91 with net change of -126.39 and net trading volume of 77.04 million shares. Daily trading volume of KSE100 listed companies increased by 22.40 million shares or 40.99% on DoD basis.
Foreign Investors remain in net selling positions of 6.65 million shares and net value of Foreign Inflow dropped by 6.36 million US Dollars. Categorically Foreign Corporate and Overseas Pakistanis investors remained in net selling positions of 5.37 and 1.28 million shares. While on the other side Local Companies, Banks and NBFCs remained in net selling positions of 27.02, 22.03 and 0.69 million shares respectively but Local Companies, Mutual Fund, Brokers and Insurance Companies remained in net buying positions of 21.95, 2.25, 22.56 and 7.86 million shares.

Trump not happy about Federal Reserve raising interest rates
President Donald Trump on Wednesday said he was not happy about the Federal Reserve’s decision earlier in the day to raise its benchmark interest rate, but added the increase was a result of a strong economy. “We’re doing great as a country. Unfortunately they just raised interest rates because we are doing so well. I’m not happy about that,” Trump told a press conference. “I’d rather pay down debt or do other things, create more jobs. So I’m worried about the fact that they seem to like raising interest rates.” The U.S. Federal Reserve raised interest rates on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth.
ADB paints bleak picture of Pak economy
The Asian Development Bank (ADB) has painted bleak picture of Pakistan’s economy as inflation will increase, GDP growth will decline and budget and current account deficits will widen during current fiscal year (FY19). The ADB has noted Pakistan’s GDP growth at 4.8 percent in FY2019, down by one percent from last year. Similarly, water shortages in some areas are likely to restrain agricultural production. Growth in manufacturing and services will likely be affected by fiscal and monetary tightening. The Bank has also hinted for power tariff increase. “The new government has to undertake tariff reforms to contain rapidly rising and potentially disruptive intercompany arrears in the energy sector—so called “circular debt” that exceeds Rs1.4 trillion, or 5% of GDP,” ADB noted in its Asian Development Outlook (ADO) Update 2018. Gas prices were already raised by as much as 143 percent in September.
Nepra approves Rs1.16 increase in power price
The National Electric Power Regulatory Authority (NEPRA) on Wednesday allowed tariff increase of Rs1.16 per unit for ex-WAPDA distribution companies on account of fuel price adjustment for the month of August. The decision was taken by NEPRA in a public hearing on the petition filed by the Central Power Purchasing Agency (CPPA) and will have a cumulative burden of around Rs16 billion on consumers. This increase has been made as in month of August the cost of fuel was high while the power consumers were supplied electricity at low rates, so this adjustment/increase has been made to recover that amount. EX-WAPDA Discos would charge this Rs1.16 per unit increase in electricity bills of next month.
Chinese investors keen to introduce innovative tableware
A delegation from Jiangxi Company, China expressed keen interest to introduce ingenious patterns of tableware and crockery in ceramics industry during a meeting at Pakistan China Joint Chamber of Commerce and Industry. They visited the factories of Gujrat and Gujranwala to observe the manufacturing techniques and raw material of tableware being used in Pakistan. Mr Robin and Mr Fu, representative of Jiangxi Company and head of the delegation, said, “We want to establish Industrial Incubator for technology transfer and to introduce new contemporary designs and techniques to Pakistan in ceramics and porcelain industry.” He also added that the city Jingdezhen is the heart and soul of China’s ceramics and about 70 percent work of Chinese ceramic industry was being done under the expertise of Jiangxi industries. The products produced in Jiangxi were being exported to US, EU and other cosmopolitan markets, he added.
Over $820 million of budgeted foreign aid received
The country provisionally received over $820 million of budget estimates of foreign assistance in the first two months (July-August) of the current financial year 2018-19 against $709.22 million during the same period of the last year (2017-18).

The Benchmark KSE100 Index have tried to neutralized the severe impact of evening star during last trading session which was generated on daily chart but bearish sentiment still prevails even have strengthened because daily momentum indicators have changed their direction. Daily and hourly Stochastic and MAORSI have generated bearish crossovers and these both would add a lot of pressure on index during current trading session. Index would try to maintain its double bottom at 40,899 points on daily chart before going for a retest of 40,711 and 40,600 points but it’s expected that some extra ordinary pressure would be witnessed on index before 41,224 and 41,330 points because index is coming down after a breath in to penetrate its short term bullish correction. It’s recommended to sell on strength until index succeeds in closing above 41,605 points.