PSX Daily Market Review - 6th Aug 2019

Trading volume at PSX floor increased by 5.56 million shares or 11.96% on DoD basis, whereas the benchmark KSE100 index opened at 31,610.72, posted a day high of 31,666.41 and a day low of 30,978.96 points during last trading session while session suspended at 31,180.80 points with net change of -485.61 points and net trading volume of 39.30 million shares. Daily trading volume of KSE100 listed companies increased by 2.85 million shares or 7.82% on DoD basis.
Foreign Investors remained in net selling positions of 2.67 million shares and net value of Foreign Inflow dropped by 0.05 million US Dollars. Categorically, Foreign Individuals and Foreign Corporate remained in net selling positions of 0.008 and 3.53 million shares but Overseas Pakistani investors remained in net buying positions of 0.86 million shares. While on the other side Local Individuals, Banks, NBFCs and Brokers remained in net long positions of 4.46, 0.61, 0.05 and 0.13 million shares but Local Companies, Mutual Funds and Insurance Companies remained in net selling positions of 1.09, 1.47 and 0.17 million shares respectively.

Stock losses steepen as U.S. puts yuan in crosshairs
Global stocks extended already substantial losses on Tuesday as China’s yuan currency dropped to an 11-year low after Washington designated Beijing a currency manipulator in a rapid escalation of the U.S.-China trade war. afe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk. U.S. Treasury Secretary Steven Mnuchin said on Monday the government had determined that China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing. “Given the fragile state of markets, this is likely to be viewed as an escalation of the trade war and exacerbate the market sell-off,” wrote Steve Englander, head of global G10 FX research at Standard Chartered Bank.
IMF loan programme creates confusion regarding funding of ML-1 project
Confusion surrounds the conditions related to IMF loan programs as it doesn’t clarify whether Chinese loans can be obtained for Karachi to Peshawar Railway (ML-I) project or not. In the IMF program there is ambiguity about loans and it is not clear whether loans can be obtained from China for $ 8.5 billion Karachi to Peshawar Railway project ML-I or not, said secretary Planning Zafar Hassan while briefing the National Assembly Standing Committee on Planning Development and Reforms. While briefing the Sixth meeting of the Standing Committee on Planning Development and Reform was held under the Chairmanship MNA Junaid Akbar, Secretary Planning said that the PC-I for the ML-I project has been prepared and it will be presented in the next Joint Coordination Committee of CPEC. The secretary however said that ML-I cannot be started this year. The project will be completed in phases, he added.
ICCI asks govt to announce new SME Policy
The Islamabad Chamber of Commerce & Industry (ICCI) has said that due to some measures taken by the government under the influence of IMF, the SME sector was passing through a worst time therefore, the government should shortly announce a new SME policy in order to create conducive environment for these businesses for their better promotion and growth. In a joint statement issued here on Monday, President ICCI Ahmed Hassan Moughal and Senior Vice President Rafat Farid said that due to tough business conditions, SMEs were compelled to take loans to meet the needs of working capital instead of expansion as their survival was in jeopardy.
Pakistan shared details of CPEC loans with IMF: official
The International Monetary Fund (IMF) said on Monday that it had full access to borrowing and maturity terms of the China-Pakistan Economic Corridor (CPEC) projects and its loans were manageable. Addressing Senior Journalists’ Forum at the National Press Club, IMF resident representative in Islamabad Teresa Daban Sanchez counted issues relating to the Financial Action Task Force (FATF), provincial spending behaviours and insufficient parliamentary strength of the government as key risks to its $6 billion 39-month bailout programme. She said Pakistan had shared full details of CPEC loans with the IMF, adding that CPEC was mostly private sector investment in energy and infrastructure. In reply to a question, the IMF official said energy projects had no doubt helped the country deal with acute shortages of power and this was a very positive aspect. She said the debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable.
CNG, LPG use by public transport banned
The Oil & Gas Regulatory Authority (Ogra) on Monday imposed a ban on the use of comp­re­ssed natural gas (CNG) and liquefied petroleum gas (LPG) by all public service vehicles (PSVs), including school vans, to ensure “safety of public life and property”. Subsequent to the ban, the motorway police laun­ch­ed a crackdown on such public service vehicles passing through M-1 and M-2 motorways, while the CNG owners association pledged to challenge the move in court. In letters written to the Ministry of Energy, the provincial governments, the Azad Jammu and Kashmir government, top police officials and CNG associations, Ogra said it had taken the decision on the recommendations of the Punjab and Sindh governments in accordance with a Sindh High Court order.

The Benchmark KS100 index have amended its previous low during last trading session and have slide below a strong supportive region of 31,500 n points, as of now daily and weekly momentum indicators have changed their direction towards bearish side and these would try to lead index towards 30,900 and 30,200 points in coming days, but hourly momentum indicators are trying to generate a hope but bulls because hourly Stochastic have generated a bullish crossover while MAORSI is ready for that. It's recommended to stay cautious while initiating new long or short positions because index would show some serious volatility this week and some cheat patterns could be witnessed on charts therefore trading with strict stop loss or minimum trailing stop loss is recommended.