PSX Daily Market Review - 3rd July 2017

Trading volume at PSX floor increased by 48.30 million shares or 25.77%, DoD basis, whereas, the KSE100 Index opened at 46711.85, posted a day high of 46831.98 and a day low of of 46506.12 points during the last trading session while the session suspended at 46565.29 with a net change of -146.56 points and a net trading volume of 113.13 million shares. Daily trading of KSE100 listed companies increased by 6.32 million shares or 5.92%, DoD basis.
Foreign Investors remained in a net selling position of 3.31 million shares and the net value of Foreign Inflow dropped by 1.29 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistani investors remained in net selling positions of 1.15 and 2.19 million shares but Foreign Corporate investors remained in a net buying position of 21000 shares. While on the other side, Local Individuals, and Mutual Funds remained in net selling positions of 37.42 and 3.13 million shares. Local Companies, Banks and Brokers remained in net buying positions of 34.18, 2.88 and 5.42 million shares, respectively.

Asian stocks held two-years highs on Monday, starting the new month on a solid footing after two quarters of gains while expectations of credit tightening by the world central banks kept global bond markets under pressure. MSCI broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.1 percent, staying within a stone throw of its two-year peak hit last week. Japanese Nikkei .N225 ticked up 0.2 percent while U.S. stock futures ESc1 gained 0.2 percent. "Global share markets have so far withstood rises in long-term bond yields," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management. Signs of stabilizing in Chinese economy and a recovery in the European economy helped to boost global share prices in the first half of this year.
The second unit of 1320MW Sahiwal power plant has been completed and it will be put into operation from today (Monday). The inauguration ceremony of the second unit, with the capacity of 660 MW, is scheduled on 3rd of July where Pakistan will be represented by Federal Minister for Planning, Development and Reforms Ahsan Iqbal, while China will be represented by Nuer Baikeli, vice chairman of National Development and Reform Commission (NDRC), chairman and party secretary of National Energy Administration (minister level), it was learnt reliably here Sunday. It is pertinent to mention here that Prime Minister Nawaz Sharif has already inaugurated the first unit of the Sahiwal power plant, with the capacity to generate 660 MW electricity, in late May this year. The project is already connected with the national grid. Sahiwal coal fired power plant with a total generation capacity of 1320 megawatts (2×660MW supercritical coal-fired generating units) is one of the early harvest projects of China Pakistan Economic Corridor (CPEC).The power plant is first overseas large-scale high-efficiency coal-fired power project built by Huaneng and Ruyi, under the "Belt and Road" Initiative.
The joint investigation team (JIT) probing the business dealings abroad of Sharif family has summoned finance minister Ishaq Dar to appear before it for questioning for the first time. However, the finance minister was also summoned twice earlier but he did not appear due to his official engagements. In the summons, the JIT has asked Dar to appear before it with all relevant documents at 3:00 pm on July 3 (today). While Ishaq Dar on Sunday held a meeting to prepare himself for questioning before appearing. The Prime Minister son Hassan Nawaz would also appear today before the Supreme Court-appointed JIT for further questioning. While, Maryam Nawaz would appear before JIT on Wednesday, July 5.
A 25,000-kilometre-long submarine cable system linking Asia, Africa and Europe has started operations, as China United Network Communications Group, a key participant in the cable project, accelerates steps to build internet infrastructure for countries and regions participating in the One Belt, One Road (OBOR) initiative. The cable system connects Vietnam, Singapore, Malaysia, Thailand, Pakistan, India, Oman, the United Arab Emirates, Qatar, Saudi Arabia, Egypt, Greece, Italy and France. The Asia-Africa-Europe-1 cable system, better known as AAE-1, has been officially launched, with services beginning from Europe to the Far East, says the AAE-1 consortium, which is coordinating efforts to complete the project. China Unicom is a key member of the alliance. The AAE-1 is the largest submarine cable system of the world built in more than a decade.
Finance Minister Senator Mohammad Ishaq Dar chaired a meeting at the Ministry of Finance on Sunday on implementation measures for the budget for FY2017-18. The finance secretary briefed the finance minister on the status of implementation of measures announced in the budget for FY 2017-18. The minister was informed that notifications to implement various decisions/announcements of the budget were being issued, and most of the work in this regard had been completed. He said that the government is determined to achieve the GDP growth target of 6% in the current fiscal year. He directed the Finance Secretary to maintain financial discipline during FY 2017-18, as has been the practice during the last four years.

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 is moving in a bearish trend channel on daily chart and is capped by a resistant trend line of the said channel along with a horizontal resistance at its 50% correction of the last bearish rally. The resistant regions ahead are at 47110 and 47800, and index is likely to remain in bearish momentum unless it closes above 47800 which falls on 61.8% correction level. If the index fails to give a clear breakout of its correction levels this time, then a new bearish rally could be witnessed as it would start expansion of its current correction which could lead the index towards 43000 and then 40500 points. For current trading session, the supportive regions are at around 46361 and 46000, therefore trading with strict stop loss of the said levels is recommended.