PSX Daily Market Review - 30th June 2017

Trading volume at PSX floor dropped by 107.47 million shares or 36.45%,DoD basis, whereas, KSE100 index opened at 46398.74, posted a day high of 47086.47 and a day low of 46115.60 during  the last trading session. The session suspended at 46711.85 with a net change of 379.54 points and a net trading volume of 106.81 million shares. Daily trading volume of KSE100 listed companies dropped by 60.49 million shares or 36.16%, DoD basis.
Foreign Investors remained in a net buying position of 16.20 million shares and a net value of Foreign Inflow increased by 35.41 million US Dollars. Categorically, Foreign Individuals and Overseas Pakistanis remained in net selling positions of 0.24 and 4.73 million shares but Foreign Corporate Investors remained in a net buying position of 21.17 million shares. While on the other side Local Individuals, Companies and Banks remained in net selling positions of 6.85, 11.02 and 14.99 million shares but NBFCs, Mutual Funds and Brokers remained in net buying positions of 0.58, 11.74 and 9.68 million shares respectively.

The dollar extended its losses on Friday as major central banks signalled that the era of cheap money was coming to an end in a boon to sterling, the euro and Canadian dollar, while Asian shares were hit by dismal performances of European and U.S. markets. In stocks, MSCI broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.8 percent, set to end the month up 1.7 percent after hitting a two-year high on Thursday. It is up 5.3 percent for the quarter and has risen 18.3 percent this year. The negative sentiment infected Chinese shares despite surveys showing activity in the manufacturing and services sector of country accelerated in June from the previous month. Manufacturers appeared to enjoy strong external demand, as new orders and production rose at a solid pace. The CSI 300 index .CSI300 fell 0.5 percent, while the Shanghai Composite .SSEC slid 0.4 percent. Hang Seng .HSI lost 1.1 percent. Japanese Nikkei .N225 tumbled 1.1 percent, shrinking its monthly gain to 1.8 percent and its quarterly increase to 5.8 percent. Australian shares dropped 1.4 percent, while South Korean KOSPI .KS11 lost 0.4 percent.
The government, as part of achieving its goal to eliminate poverty by 2030, has prioritised 17 pro-poor sectors through Medium Term Expenditure Framework (MTEF), which provides a link between policy priorities and related budget allocations. The expenditure on pro-poor sectors in 2012-13 stood at 8.5 per cent of Gross Domestic product (GDP) in 2013-14, these were 7.7pc of GDP and in 2014-15 these were 8.3pc of GDP. However, during 2015-16, total expenditures of these sectors were increased and reached 2,694.67 billion, which was 9.3pc of GDP.
International businesses are being caught in the crossfire of Qatar’s dispute with its Arab neighbours as it delays shipments, lengthens travel times and prompts contingency plans in case the crisis deepens. The feud between Arab powers threatens to undermine the region’s progress in positioning itself as business friendly and raises concerns that some firms may be forced to pick sides. Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt cut diplomatic ties with Qatar on June 5 and imposed economic sanctions, accusing it of funding terrorism, a claim Qatar rejects.
Minister for Planning, Development and Reforms Ahsan Iqbal has said that Pakistan is smoothly implementing the China Pakistan Economic Corridor (CPEC) and we are very satisfied with the speed of the implementation. “China has promised $57 billion in investment in projects along CPEC, part of the Belt and Road Initiative proposed by Chinese President Xi Jinping in 2013 which aims to link China with the Middle East and Europe,” he said in an interview on the sidelines of the World Economic Forum in Dalian, China. He said, “In addition to the investment pledges from China, Pakistan would invest close to $10 billion. The economic corridor, to be completed in three phases by 2030, will boost Pakistan’s energy security and infrastructure, helping it to attract more foreign investment.”
The decision to slap additional duties on non-essential imports will reduce the loss of foreign exchange while promoting local production, providing employment and generating additional revenue, the Islamabad Chamber of Small Traders said on Wednesday. In a statement, Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt lauded the government for discouraging unnecessary imports and encouraging local producers. The decision of the government to discourage imports of needless items will reduce trade deficit which has touched alarming proportions, he said.

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

The benchmark KSE100 index have completed its 50% correction of its last bearish rally and right now it is capped by a resistant trend line along with two horizontal lines one at 47370 and other at 48062 which may resist against current bullish momentum and would try to push index back in bearish zone. Therefore a cautious trading strategy is needed for time being as if index would fails to close above these two levels then it can start a new bearish rally which may lead index towards 41000 therefore trading with strict stop loss is recommended. Closing above 48062 would indicate a new bullish trend. For current trading session Index have supportive regions around 46361 and 46061 while resistant region is 47370.