PSX Daily Market Review - 3rd July 2019

Trading volume at PSX floor increased by 43.12 million shares or 89.74% on DoD basis, whereas the benchmark KSE100 index opened at 34,013.28, posted a day high of 34,340.23 and a day low of 33,918.97 points during last trading session while session suspended at 34,307.11 points with net change of 310.78 points and net trading volume of 73.91 million shares. Daily trading volume of KSE100 listed companies increased by 36.23 million shares or 96.14% on DoD basis.
Foreign Investors remained in net buying positions of 4.03 million shares and net value of Foreign Inflow increased by 2.78 million US Dollars. Categorically, Foreign Individual and Overseas Pakistani remained in net selling positions of 0.06 and 1.12 million shares but Foreign Corporate investors remained in net buying positions of 5.20 million shares. While on the other side Local Individuals, Local Companies, Banks, Mutual Fund and Insurance Companies remained in net selling positions of 10.16, 2.03, 3.60, 3.28 and 1.91 million shares respectively but NBFCs and Brokers remained in net buying positions of 0.11 and 16.49 million shares.

Asian shares weaken as trade optimism fades
Asian shares fell on Wednesday as initial enthusiasm over the latest U.S.-China trade truce was overtaken by fresh concerns over Washington’s threat of tariffs on additional European goods.Global growth concerns also weighed on investor confidence, with South Korea the latest trade-reliant economy to cut its economic growth and export targets, a day after weaker factory readings worldwide. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.3% lower, while Japan’s Nikkei slipped 0.6% in early trade. U.S. stocks managed modest gains on Tuesday after holding near the unchanged mark for much of the session, with the S&P 500 gaining 0.29% to a record close of 2,972.98, underpinned by dividend-oriented utilities and real estate stocks.[.N] Still, a rally in global stocks following the U.S.-China summit at weekend is rapidly losing steam. While the threat of new U.S. tariffs has been postponed for now, existing tariffs that have disrupted global supply chains are unlikely to be lifted any time soon.
IMF Executive Board meets today to decide on Pakistan bailout
The International Monetary Fund (IMF)’s Executive Board would meet today (Wednesday) in Washington to consider Pakistan’s request for $6 billion Extended Fund Facility (EFF). The IMF Executive Board calendar updated on its website showed that its meeting has been scheduled for July 3, and the agenda includes, ‘three-year extended fund facility’. Pakistan is hopeful that IMF would approve loan programme, as it has already met the Fund’s prior conditions.
No change in tax rate for token payment, registration of cars
The Federal Board of Revenue (FBR) on Tuesday clarified that rate of tax has not been changed in the financial budget-2019 for the token payment and registration of cars. “The rate of tax for the token payment and registration of cars is the same that was charged in the previous year. There is no enhancement or reduction in the tax rate,” the FBR said and added that no tax has been levied on private cars on the basis of seating capacity. However, the people who have not filed tax returns will have to pay double tax than the people who are on the Active Taxpayer List (ATL). Any person who thinks he is not eligible to pay tax can inform the FBR beforehand who can be considered for exemption from the payment of this additional tax. According to the FBR, after verification it was noticed that this misperception was due to a typographical mistake which was rectified in the Finance Act-2019.
Treasury single account gets going; Benami crackdown zones identified
The government has empowered the federal secretaries to have full control over development and non-development funds of their respective ministries and attached organisations and be responsible to surrender all unspent funds to the consolidated fund at least 25 days before the close of fiscal year. This has been done with coming into force of the Public Finance Management Act 2019 as part of the Finance Bill 2019 that also completely binds the ministries and their secretaries not to keep public funds in commercial banks. As such, all funds would remain in the government’s single treasury account and could be withdrawn by principal accounting officers (PAOs) anytime in line with allocations without going through the financial advisors.
Processing mills on strike against 17pc sales tax
All 600 textile processing units in four major cities of the country have been closed in protest against the imposition of a 17 per cent sales tax on five zero-rated sectors and the government’s failure to get the trade sector registered with the tax net. Though the processing units’ owners are yet to lay off hundreds of thousands of workers, they say they may take this decision within the next 10 days if the government continues ignoring their genuine demands. “We finally closed our all member textile processing units situated in Faisalabad, Karachi, Lahore and Gujranwala. Our 600 member mills include 240 in Faisalabad and around 225 in Karachi,” All Pakistan Textile Processing Mills Association Chairman Habib Gujjar told Dawn. Since the APTMA has closed all its member units across the country, the All Pakistan Textile Sizing Association too announced it will shut 100 member mills in Faisalabad, Jhang, Toba Tek Singh and Hafizabad from Thursday.

ATRL, PAEL, DGKC, MLCF and ISL would try to lead the positive momentum while SNGP and SSGC would remain in laggards during current trading session.

The Benchmark KSE100 Index have continued its bullish momentum during last trading session after penetration above initial resistant region of 34,000 points, as of now index would try to continue its bullish sentiment towards 34,500 and then 34,860 points. Daily and hourly momentum indicators are still in bullish mode as they have generated bullish crossover during last trading session and it's expected that this trend would be continued till 34,500 and then 35,000 points. Index would continue its bullish momentum towards 35,700 points if it would succeed in penetration above 34,500 and then 35,000 points in coming days. While on flip side index have strong supportive regions ahead at 34,000 and 33,600 points. It's recommended to post trailing stop loss on long positions during current trading session.