PSX Daily Market Review - 6th May 2019

Trading volume at PSX floor dropped by 3.58 million shares or 5.27% on DoD basis, whereas the benchmark KSE100 index opened at 36,544.90, posted a day high of 36,556.42 and a day low of 36,071.10 points during last trading session while session suspended at 36,122.95 with net change of -424.68 points and net trading volume of 48.58 million shares. Daily trading volume of KSE100 listed companies dropped by 2.40 million shares or 4.70 on DoD basis.
Foreign Investors remained in net buying positions of 4.31 million shares and net value of Foreign Inflow increased by 2.70 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistanis remained in net buying positions of 2.98 and 1.35 million shares but Foreign Individuals remained in net selling positions of 0.02 million shares. While on the other side Local Individuals, Companies, Banks and NBFCs remained in net buying positions of 3.21, 0.38, 2.59 and 0.04 million shares respectively but Mutual Funds, Brokers and Insurance Companies remained in net selling positions of 8.09, 2.51 and 0.61 million shares respectively.

Provinces resist IMF’s demand of Rs430b cash surpluses
The International Monetary Fund (IMF) has sought over Rs430 billion cash surpluses from provinces in the next fiscal year – a demand that the federating units have termed unrealistic and linked any cash surplus with ability of the federal government to collect more taxes. In a meeting with Pakistani officials at the Q-Block, the IMF mission urged them to throw cash surpluses of around 1% of the Gross Domestic Product (GDP) or over Rs430 billion for fiscal year 2019-20, sources in the Finance Ministry told The Express Tribune. The demand has been made to keep the overall budget deficit below 5% of the GDP and project a primary fiscal balance.
ECC approves Rs9 a litre hike in petrol price
The Economic Coordination Committee (ECC) of the Cabinet on Friday approved an increase of Rs9 per liter in the price of petrol, putting a damper on the Ramadan festivities. However, the council decided to refer the issue again to the federal cabinet to take a final decision. The new price would be effective after the federal cabinet’s nod of approval. After the increase in price, petrol will sell at Rs108.42 per liter. Chaired by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh, the ECC also approved an increase of Rs4.89 per litre (or 4.16pc) in the price of High Speed Diesel (HSD). HSD is widely used in transport and agriculture sector. With this increase, the fuel price will increase to Rs122.32 per litre from the current Rs117.43 a liter. .
Challenge for Pakistan is to sustain growth levels: ADB
Even with Pakistan’s continually ballooning twin deficit, experts believe there is a silver lining for economic growth, which may soar by the end of Pakistan Tehreek-e-Insaf (PTI) government’s tenure. The opinion is that a high growth rate seems fairly achievable, however, sustaining the level is the real challenge. “At the end of the five-year election period (of the PTI government), we may look at 5-6% or even 7% growth (in GDP),” said Asian Development Bank (ADB) Director General for Central and West Asia Department Werner Liepach on the sidelines of the 52nd ADB Annual Meeting. .
ADB emphasises climate change
Amid concerns over trade disputes and challenges posed by climate change, Asian Development Bank’s (ADB) 52nd annual meeting of the board of governors concluded in Fiji on a positive note: fighting the challenges and achieving prosperity through unity. Among the issues discussed at the event were sustainable tourism and its potential to boost national and regional development efforts, the role of private-sector financing for disaster risk management and climate resilience, and the importance of actions to improve ocean health. In one of the sessions, Adviser to the Prime Minister on Institutional Reforms Dr Ishrat Husain proposed a single visa for tourists to travel through the Central Asia Reg­ional Economic Coope­ration (Carec) member countries without multiple immigration challenges. He also suggested common marketing strategies as well as tourist operators well versed in different languages.
Gas supply to cement manufacturer cut off
The ongoing drive against gas theft undertaken by Sui Northern Gas Pipelines Limited (SNGPL) in Khyber-Pakhtunkhwa (K-P) has begun damaging large industrial units, one of which has contacted the Prime Minister’s Office for immediate relief. In a letter written by Lucky Cement, a big manufacturer and exporter of clinker and cement, to Prime Minister Imran Khan, the company management highlighted the major shutdown at its northern plant, located in Pezu, Lucky Marwat district, K-P. “For the past almost four months, we are facing major gas shutdowns at our plant and we have been raising the issue continuously with relevant departments but the situation has gone from bad to worse,” stated the letter. .

DGKC, MLCF, NML, PAEL and EFOODS would try to resist against negative momentum, while NCL, ISL, DOL and SSGC would remain in laggards.

The Benchmark KSE100 Index have penetrated below its previous low during last trading session by following daily bearish momentum. As of now hourly momentum indicators are trying to generate bullish crossovers and it's expected that if these would succeed in doing so then an intraday pull back would be witnessed after a dip but chances of this pull back would become evident if index would succeed in closing above 36,200 points in first hour of trading. It's recommended to stay side line and wait for final confirmation of pull back because if index would not succeed in starting a positive day then it can take a dip towards 35,800 or 35,500 points where it would find strong support. Index is also being supported by a descending trend line on daily chart but it's expected that index may try to open with a negative gap below said trend line to generate panic among week investors. It's recommended to post strict stop loss on long positions.