Previous Session Recap
Trading volume at PSX floor dropped by 101.74 million shares or 38.02% on DoD basis, whereas the benchmark KSE100 index opened at 40,848.53, posted a day high of 41,295.28 and a day low of 40,815.80 points during last trading session while session suspended at 40,887.62 points with net change of 39.09 points and net trading volume of 110.68 million shares. Daily trading volume of KSE100 listed companies dropped by 36.99 million shares or 25.05% on DoD basis.
Foreign Investors remained in net selling positions of 1.44 million shares and value of Foreign Inflow dropped by 1.00 million US Dollars. Categorically, Foreign Individuals and Foreign Corporate remained in net selling positions of 0.02 and 1.71 million shares but Overseas Pakistanis remained in net buying positions of 0.29 million shares. While on the other side Local Companies, Banks, NBFCs, Mutual Fund and Brokers remained in net selling positions of 9.68, 7.04, 0.004, 4.13 and 94.98 million shares but Local Individuals and Insurance Companies remained in net buying positions of 115.90 and 0.91 million shares respectively.
Analytical Review
Asian shares lower as investors book decade-end profits
Asian shares slipped on the last trading day of the decade, echoing falls on Wall Street, as investors locked in gains made since the United States and China reached a preliminary trade deal earlier this month. Early in the Asian trading session, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.39%, its weakest performance since Dec. 4. For the month, the index is still up 5.7%. The index has gained 16% this year, a sharp turnaround from a 16.2% drop last year but lagging a 23.8% year-to-date gain in MSCI’s global share index .MIWD00000PUS. Australian shares were 1.69% lower and Hong Kong's Hang Seng .HSI dropped 0.32%. “We are seeing some profit-taking into year-end,” said Ryan Felsman, senior economist at CommSec in Sydney, adding that progress on resolving the 17-month-long U.S.-China trade war remained a positive factor for investors into the new year.
Pakistan eyeing Vietnamese market to export fans
Pakistan is eyeing the Vietnamese market to export electric fans as the East Asian country’s demand for fans has increased amid rising tourism. In a visit organised by the Engineering Development Board (EDB), a nine-member trade delegation representing electric fan sector visited Ho Chi Minh City in order to develop business-to-business meetings and explore opportunities to enhance exports. The Pakistan Electric Fan Manufacturers Association (PEFMA) delegation held meetings with different companies including Co. Phat Mechanical Manufacturing Company (Cophaco) — one of the prominent manufacturers of electric fans in Vietnam. During the visit, Vietnamese buyers told the PEFMA delegation that light fans were required from Pakistan as demand was increasing at luxury resorts, hotels and spas etc.
All duties, taxes on cotton import withdrawn
The Economic Coordination Committee (ECC) of the cabinet on Monday waived all duties and taxes on import of cotton and allowed its import via the Torkham border land route from Afghanistan and Central Asian States to meet the growing demand of the textile value-added sector. The decision taken at a meeting of the ECC, headed by Adviser to the Prime Minister on Finance Dr Hafeez Shaikh, will be effective from Jan 15, 2020. The government had in 2014-15 imposed one per cent customs duty along with 5pc sales tax on cotton import. Over the next few years, its import was subject to 3pc regulatory duty, 2pc additional customs duty and 5pc sales tax. The duties were withdrawn in January/February 2017 and re-imposed in July-August.
Provinces agree on uniform standards for packaged food
The provinces have finally agreed over the establishment of uniform standards for food and other consumer items across the country with the condition that enforcement will be the responsibility of respective provincial authorities. The decision was taken at the Council of Common Interests (CCI) recently. All provinces agreed to have a uniform standard of food and other consumer products, set by the Pakistan Standard and Quality Control Authority (PSQCA), an attached department of the Ministry of Science and Technology (MoST). Meanwhile the federal government has agreed to give up the power of enforcement and monitoring of standards allowing the provincial government and food authorities to implement the standards.
Pakistan’s current account deficit to narrow down to 2.4pc: IMF
International Monetary Fund (IMF) has projected that Pakistan’s current account deficit (CAD) would narrow to 2.4 percent in ongoing fiscal year due to the reduction in trade deficit. The IMF in its recent report on Pakistan economy estimated that Pakistan's CAD would reduce to 2.4 percent of the GDP in current fiscal year as against 4.8 percent of the GDP in previous financial year. Earlier, the Fund had projected the country CAD at 2.6 percent for the year 2019-2020. However, the IMF had downward its estimate to 2.4 percent after CAD had reduced by around 74 percent in first quarter of the present fiscal year.
Asian shares slipped on the last trading day of the decade, echoing falls on Wall Street, as investors locked in gains made since the United States and China reached a preliminary trade deal earlier this month. Early in the Asian trading session, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.39%, its weakest performance since Dec. 4. For the month, the index is still up 5.7%. The index has gained 16% this year, a sharp turnaround from a 16.2% drop last year but lagging a 23.8% year-to-date gain in MSCI’s global share index .MIWD00000PUS. Australian shares were 1.69% lower and Hong Kong's Hang Seng .HSI dropped 0.32%. “We are seeing some profit-taking into year-end,” said Ryan Felsman, senior economist at CommSec in Sydney, adding that progress on resolving the 17-month-long U.S.-China trade war remained a positive factor for investors into the new year.
Pakistan is eyeing the Vietnamese market to export electric fans as the East Asian country’s demand for fans has increased amid rising tourism. In a visit organised by the Engineering Development Board (EDB), a nine-member trade delegation representing electric fan sector visited Ho Chi Minh City in order to develop business-to-business meetings and explore opportunities to enhance exports. The Pakistan Electric Fan Manufacturers Association (PEFMA) delegation held meetings with different companies including Co. Phat Mechanical Manufacturing Company (Cophaco) — one of the prominent manufacturers of electric fans in Vietnam. During the visit, Vietnamese buyers told the PEFMA delegation that light fans were required from Pakistan as demand was increasing at luxury resorts, hotels and spas etc.
The Economic Coordination Committee (ECC) of the cabinet on Monday waived all duties and taxes on import of cotton and allowed its import via the Torkham border land route from Afghanistan and Central Asian States to meet the growing demand of the textile value-added sector. The decision taken at a meeting of the ECC, headed by Adviser to the Prime Minister on Finance Dr Hafeez Shaikh, will be effective from Jan 15, 2020. The government had in 2014-15 imposed one per cent customs duty along with 5pc sales tax on cotton import. Over the next few years, its import was subject to 3pc regulatory duty, 2pc additional customs duty and 5pc sales tax. The duties were withdrawn in January/February 2017 and re-imposed in July-August.
The provinces have finally agreed over the establishment of uniform standards for food and other consumer items across the country with the condition that enforcement will be the responsibility of respective provincial authorities. The decision was taken at the Council of Common Interests (CCI) recently. All provinces agreed to have a uniform standard of food and other consumer products, set by the Pakistan Standard and Quality Control Authority (PSQCA), an attached department of the Ministry of Science and Technology (MoST). Meanwhile the federal government has agreed to give up the power of enforcement and monitoring of standards allowing the provincial government and food authorities to implement the standards.
International Monetary Fund (IMF) has projected that Pakistan’s current account deficit (CAD) would narrow to 2.4 percent in ongoing fiscal year due to the reduction in trade deficit. The IMF in its recent report on Pakistan economy estimated that Pakistan's CAD would reduce to 2.4 percent of the GDP in current fiscal year as against 4.8 percent of the GDP in previous financial year. Earlier, the Fund had projected the country CAD at 2.6 percent for the year 2019-2020. However, the IMF had downward its estimate to 2.4 percent after CAD had reduced by around 74 percent in first quarter of the present fiscal year.
Market is expected to remain volatile during current trading session.
Technical Analysis
The Benchmark KSE100 index have bounced back after posting a double top on daily chart and have created a hammer as of now it's expected that index would try to target 40,400 and 40,050 points on bearish side and in case index would succeed in breakout below 40,000 points on daily or weekly closing basis than a short term bearish trend would be witnessed in coming days. It's recommended to stay cautious until either index succeed in closing below 40,000 points or above 41,500 points. On intraday basis index would remain bearish and it is recommended to start selling on strength with strict stop loss at 41,500 points.
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