PSX Daily Market Review - 30th May 2019

Trading volume at PSX floor increased by 30.18 million shares or 19.82% on DoD basis, whereas the benchmark KSE100 index opened at 35,083.36, posted a day high of 35,993.61 and a day low of 34,949.28 points during last trading session while session suspended at 34,959.43 with net change of 1010.15 points and net trading volume of 151.48 million shares. Daily trading volume of KSE100 listed companies increased by 28.69 million shares or 23.36% on DoD basis.
Foreign Investors remained in net selling positions of 19.88 million shares and net value of Foreign Inflow dropped by 4.65 million US Dollars. Categorically, Foreign Individuals remained in net buying positions of 0.01 million shares but Foreign Corporate and Overseas Pakistanis Investors remained in net buying positions of 15.00 and 4.89 million shares. While on the other side Local Companies, Banks, NBFCs and Insurance Companies remained in net selling positions of 11.67, 2.02, 0.59 and 2.63 million shares respectively but Local Individuals, Mutual Fund and Brokers remained in net buying positions of 18.09, 7.76 and 11.52 million shares.

Asia stocks sag, bonds rally as trade war fears persist
Asian stocks tracked Wall Street losses on Thursday as rhetoric from Beijing and Washington over trade matters kept alive investor concerns about the tariff war’s impact on global economic growth. The risk aversion propped up global safe-haven assets such as government bonds, with yields on German benchmark debt approaching record lows. The dispute between the world’s two largest economies showed few signs of abating, with Chinese newspapers reporting that Beijing could use rare earths to strike back at Washington after U.S. President Donald Trump remarked he was “not yet ready” to make a deal with China over trade. Japan’s Nikkei was down 0.5% and Australian stocks shed 0.66%. MSCI’s broadest index of Asia-Pacific shares outside Japan stood little changed after slipping to a four-month low the previous day.
Rs1.83tr national development outlay approved
Adding about 300 new federal projects to the portfolio, the National Economic Council (NEC) on Wednesday approved a consolidated national development programme for the next fiscal year envisaging Rs1.837 trillion investments and four per cent economic growth rate. The NEC meeting, which was presided over by Prime Minister Imran Khan and attended by all the chief ministers as well as the prime minister of Azad Jammu and Kashmir, also cleared in principle the 12th five-year plan (2018-23) that forecasts 6.5pc economic growth rate by terminal year i.e. 2023 while mainly relying on the acceleration of the China-Pakistan Economic Corridor’s second phase.
ECC expected to approve Rs25bn stock market support fund
The Economic Coordination Committee (ECC) is likely to approve the proposed Stock Market Support Fund on Thursday in a bid to boost investors’ sentiments. The proposal in this regard has been forwarded by the Ministry of Finance to the ECC, which under Dr Hafeez Sheikh is expected to approve the Rs25 billion market support fund. It recommended the establishment of two capital market support funds to be maintained by an asset management company (AMC) and buy shares of government-listed companies.
Pakistan’s financing needs grow to 42.3pc of GDP: IMF
Pakistan’s gross financing needs during 2019 increased to 42.3 per cent of GDP as budget deficit increased to 7pc and maturing debt widened to 35.1pc of the GDP, data released by the International Monetary Fund (IMF) showed on Tuesday. The IMF in its fiscal monitor for April said that, “in Pakistan, the overall deficit was 2.5 percentage points of GDP looser than budgeted, owing to underperforming revenues and expenditure overruns related to the political cycle.” The fiscal monitor also warned that many emerging market economies including Pakistan “have become vulnerable to rollover risks if they face large financing needs” amid “rising interest burdens, which exceeded 20 percent of total revenue in 2018 in Pakistan.”
Withdrawal of zero-rating to hurt textile industry
Sharing apprehensions on the proposal seeking withdrawal of zero-rating regime, Aptma on Wednesday said the move would adversely impact export production and deter local and foreign investments. “The industry is seriously concerned with this proposal as the end exporter would be worst hit due to stuck up of refunds,” All Pakistan textile Mills Association (Aptma) Chairman Syed Ali Ahsan said. The regime of zero-rating was introduced in 2009 after due diligence by the Federal Board of Revenue following meetings with the stakeholders and verifications by a leading auditor.

PAEL, DGKC, ISL, EPCL and MLCF would try to lead the positive momentum while NML, STCL and NCL would reamin in laggards during current trading session.

The Benchmark KSE100 Index had bounced back after getting support from a horizontal supportive region or a daily double bottom during last trading session and have succeeded in penetration above its previous rally's high. Daily & hourly momentum have been mixed but weekly momentum is in bullish mode after previous week's bullish engulfing. As of now index have resistant regions ahead at 36,300 & 36,500 points while on flip side index would try to find supports at 35,250 & 34,880 points in case of any pressure. Currently it's expected that index would try to close on a positive note during current trading session and today's closing above 36,100 points would push index towards 37,000 & 37,500 points in coming days. It's recommended to hold existing long positions with trailing stop loss and average them out if index would succeed in closing above 36,100 points on hourly basis. For day trading index would start a new rally if penetrated above 36,100 towards 36,300 points and initiating long positions to avail that spike could be beneficial.