PSX Daily Market Review - 5th Sep 2019

Trading volume at PSX floor increased by 64.85 million shares or 101.26% on DoD basis, whereas the benchmark KSE100 index opened at 29,805.66, posted a day high of 30,378.13 and a day low of 29,468.29 points during last trading session while session suspended at 30,244.71 points with net change of 435.05 points and net trading volume of 107.35 million shares. Daily trading volume of KSE100 listed companies increased by 58.67 million shares or 120.51% on DoD basis.
Foreign Investors remained in net selling positions of 16.18 million shares and net value of Foreign Inflow dropped by 4.57 million US Dollars. Categorically, Foreign Corporate remained in net selling positions of 16.335 million shares but Overseas Pakistani Investors remained in net buying positions of 0.17 million shares. While on the other side Local Individuals, Local Companies, Banks and Insurance Companies remained in net buying positions of 16.01, 17.44, 1.16 and 3.20 million shares but NBFCs. Mutual Funds and Brokers remained in net selling positions of 0.009, 6.15 and 15.83 million shares respectively.

Confirmation of U.S.-China trade talks buoys shares, investor spirits
Asian shares extended gains on Thursday and U.S. stock futures jumped after China said it will hold trade talks with the United States in early October, raising hopes they can de-escalate their trade war before it inflicts further damage on the global economy. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.8%, while the Shanghai composite index surged 1.8%. Japan’s Nikkei added 2.4%. U.S. stock futures reversed early losses and rose 1%. The Chinese yuan jumped versus the dollar in offshore trade, while safe-have assets such as gold and the yen fell. China’s confirmation of trade talks added to upbeat geopolitical news overnight. A parliamentary vote in Britain put the brakes on the nation’s no-deal exit from the European Union, Hong Kong withdrew a contentious extradition bill that sparked recent protests and political turmoil in Italy appeared to be easing.
ECC approves proposal for simplification of tax regime for non-resident firms
The Economic Coordination Committee (ECC) of the Cabinet on Wednesday has approved the proposal for simplification of tax regime for non-resident companies investing in the local debt market with a view ot increase foreign exchange inflows and reserves. The Ministry of Finance had submitted proposals in ECC for simplification of tax regime for non-resident companies investing in the local debt market with a view to deepening the country’s capital markets, reducing the cost of debt for the government. The new tax regime as approved by the ECC would apply to the non-resident companies having no permanent presence in Pakistan.
Hafeez claims improvement in economic situation
Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh on Wednesday said that economic situation has improved in the country due to the policies of the incumbent government. Pakistan’s exports have increased, imports and current account deficit reduced, tax collection enhanced and number of tax filers have also shown massive growth, Adviser to Prime Minister on Finance and Revenue said while addressing a press conference along with government’s economic team. Federal Minister for Energy Omer Ayub, Federal Minister for Economic Affairs Hammad Azhar, Federal Minister for Planning and Development Khusro Bakhtiyar, Adviser to Prime Minister on Commerce Abdul Razzak Dawood and Special Assistant to the Prime Minister on Petroleum Nadeem Babar were also present.
Under-fire govt beats retreat on GIDC amnesty
Surrendering to public outcry, Prime Minister Imran Khan finally decided on Wednesday to withdraw a controversial ordinance promulgated last week that offered Rs210 billion financial amnesty to big businesses. The government will also ask the Supreme Court of Pakistan to club all stay orders issued by various high courts and itself take an expedited decision in ongoing cases on the Gas Infrastructure Development Cess (GIDC). A day earlier, the federal cabinet had asked the ministry of law to amend the GIDC Ordinance of Aug 27, 2019 to include the condition of forensic audit before signing settlement agreement with these sectors namely fertiliser, general industry, IPPs, generation companies, K-Electric and CNG sector.
Govt rules out any mini-budget in near future
Amid criticism from both government and opposition members of the National Assembly over price hike and other monetary and fiscal policies, the government on Wednesday ruled out any mini-budget in the near future, saying the improvement in revenue collection would be made through technological and administrative measures. This was the crux of a meeting of the National Assembly’s Standing Committee on Finance and Revenue presided over by Asad Umar, who wished the PM’s adviser on finance and governor of the State Bank of Pakistan (SBP) to attend such sessions in the interest of the government. The committee was informed that change in base year from 2007-08 to 2015-16 reduced the inflation measured by Consumer Price Index from 11.6 per cent in August to 10.5pc. Asad Umar wondered which inflation rate might be considered by the SBP for policy rate. He said the CPI was showing rising trend for the last few months and the government should take steps to find reasons and address them.

The Benchmark KSE100 index have succeeded in starting a pull back after posting low at its horizontal supportive region of 29,500 points, as of now daily momentum indicators have changed their direction and it seems that these would try to push index in positive direction till tomorrow. It's expected that if index would succeed in closing above 30,300 points on hourly closing basis in first half of the day then it would try to target 30,860 points but it's recommended to stay cautious because index would remain volatile until it would succeed in closing above 31,200 or 31,700 points on short term basis. It's recommended to initiate trades with trailing stop losses.

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