PSX Daily Market Review - 4th July 2017

The KSE-100 Index lost a total of 1899 Points (-4.08%) in the last trading session, with the KSE-100 volumes going up to 77.67 Million from 48.30 Million, previously. The Index made a high of 46565.30 and a low of 44639, eventually closing at 44665.

Talking about the transaction data, Foreign Investors remained in a Net buying position of $4.85 Million, followed by Companies with a Net buying of $3.23 Million, Banks with $2.04 Million and Insurance Companies with $2.25 Million in buying. Other Buyers included NBFCs with $0.19 Million, other Organizations with $0.16 Million and Individuals with $0.04 Million. On the other hand, Major sellers included Mutual funds with a net selling position of $8.71 Million, and Brokers with $4.04 Million in net sales.

Federal Board of Revenue (FBR) is expected to raise an additional Rs10 billion in revenue from taxes on shares trading in the current fiscal year of 2017/18, sources said on Monday. The government introduced several changes in tax rates and Income Tax Ordinance 2001 for tax year 2018 in order to generate additional revenue from the equity market instead of burdening public ahead of general elections next year.

Finance Minister Ishaq Dar on Monday termed the Pakistan Tehreek-e-Insaf (PTI) chief Imran Khan a liar and challenged him to present himself for accountability because he has been hatching a conspiracy against an elected prime minister whose name had never been mentioned in the Panama Papers. Speaking to the media after appearing before the Joint Investigation Team (JIT), Ishaq Dar said a conspiracy was being hatched at local and international level against Prime Minister Nawaz Sharif as it was now believed that Pakistan would be among the top 30 global economic powers in the next 12 years.

Consumer price inflation clocked in at 3.9 percent year-on-year (YoY) for June mainly due to increase in perishable food prices, bringing the annual tally for the last fiscal year of 2016/17 at 4.16 percent, official data showed on Monday. State Bank of Pakistan (SBP) projected consumer price index (CPI) inflation at 4.5 to 5.5 percent in 2016/17. The government was expecting the annual reading at 4.3 percent. Annual inflation for 2015/16 was recorded at 2.86 percent, while in the previous fiscal year it stood at 4.53 percent.

The Pakistan Credit Rating Agency Limited ("PACRA") has maintained the Bank al Habibs long-term rating of "AA+" (double A Plus) and a short-term rating of "A1+" (single A one plus). The PACRA also maintained the debt instruments of the Bank at AA (double A).

Over 60 LPG-air mix plants are being set up. The government is setting up over 60 liquefied petroleum gas (LPG)-air mix plants in selected areas to facilitate consumers where natural gas supply has not reached. Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) would establish the plants in their respective far-flung areas at an estimated cost of Rs1, 353.29 million. The sources said private sector has also been allowed to establish their own LPG-air mix plants for housing colonies.

Foreign firms sent home $1.9bn in July-May. Foreign companies working in Pakistan repatriated $1.88 billion in profits and dividends to their home countries in the 11 months through May, a year-on-year increase of nearly 7 per cent, the State Bank of Pakistan said on Monday. The amount was almost equal to the foreign direct investment (FDI) of $2bn Pakistan attracted during the same period.

 Total signs major Iran gas deal, defying US pressure. French energy giant Total defied US pressure on Monday by signing a multibillion-dollar gas deal with Iran, the first by a European firm in more than a decade. Total will invest an initial $1 billion in the South Pars offshore gas field as part of a consortium with Chinese and Iranian firms.The 20-year project, which will eventually see the firms inject $4.9bn,

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 KSE-100 Index plummeted by 1899 points (-4.08%) in the previous session. The losses recovered from 21st to 29th June 2017 were almost wiped off. As of now, the testing grounds for the Index stand at 44150 and 43820. Despite of RSI and other major indicators reading Oversold, we foresee a deeper correction towards the mentioned levels, backed by unstable political conditions and lackluster confidence among Investors. On the flip side, a very unlikely upside move may be capped at 45470. The Index must sustain and close above 44150 region, in order to post a relief rally towards 45470 region. Traders are advised sell on strength, and deploy a strict Stop loss at 43800.