PSX Daily Market Review - 8th May 2019

Trading volume at PSX floor dropped by 6.05 million shares or 8.48% on DoD basis, whereas the benchmark KSE100 index opened at 35,597.80, posted a day high of 35,806.33 and a day low of 35,491.20 points during last trading session while session suspended at 35,631.06 with net change of 25.64 points and net trading volume of 54.58 million shares. Daily trading volume of KSE100 listed companies increased by 0.23 million shares or 0.42 on DoD basis.
Foreign Investors remained in net buying positions of 5.42 million shares and net value of Foreign Inflow increased by 3.46 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistanis remained in net buying positions of 4.81 and 0.61 million shares. While on the other side Local Individuals, Companies and Banks remained in net buying positions of 2.28, 2.30 and 0.77 million shares but NBFCs, Mutual Fund, Brokers and Insurance Companies remained in net selling positions of 0.04, 5.45, 1.78 and 1.80 million shares respectively.

Asia stocks slip, bonds rally on fears China-U.S. trade deal unraveling
Asian equities tracked Wall Street’s slide on Wednesday, while investors switched to safe-haven government bonds, driven by fears that global growth will suffer as a potential trade deal between the United States and China appeared to be unraveling. Beijing said on Tuesday that Chinese Vice Premier Liu He will visit Washington on Thursday and Friday for trade talks, setting up a last-ditch bid to salvage a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by U.S. President Donald Trump. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.75 percent, stooping to its lowest level since late March. The Shanghai Composite Index retreated 1.6 percent.
Rs564.2b released for projects under PSDP
The federal government has released Rs564.2 billion for various ongoing and new social sector uplift projects under its Public Sector Development Programme (PSDP) 2018-19 as against the total allocation of Rs675 billion. Under its development program, the government has released an amount of Rs22.66 billion for federal ministries, whereas Rs22.9 billion for corporations and Rs38.1 billion for special areas, according to a latest data released by Ministry of Planning, Development and Reform. Out of these allocations, the government released Rs217.4 billion for National Highway Authority (NHA) out of its total allocation of Rs185.197 billion. Under annual development agenda, the government also released Rs11.61 billion for National Transmission and Despatch Company and Pakistan Electric Power Company for which an amount of Rs33.365 billion was allocated under PSDP 2018-19.
Govt convincing IMF on tax amnesty scheme
The government is trying to convince International Monetary Fund (IMF) on its tax amnesty scheme by saying it would help broaden tax base and documented the economy. The IMF usually opposed the tax amnesty schemes. Such schemes, according to IMF, usually are not successful in mobilising revenues to the moral of obliging taxpayers. The government of Pakistan has proposed the tax amnesty scheme when it is holding talks with the IMF for new loan programme. “We hope that IMF will support our tax amnesty scheme, which will help in documented the economy and broadening of tax base,” said an official of the ministry of finance. He further said that scheme would also help in generating revenues, which is one of the IMF major demands to increase the tax collection.
Iraq plans $53bn project with ExxonMobil, PetroChina
Iraq is planning a $53 billion mega project with global energy giants ExxonMobil and PetroChina to use seawater from the Persian Gulf to boost oil production, Prime Minister Adel Abdul-Mahdi announced on Tuesday. The 30-year project would boost output from Iraq’s southern oil fields, and includes designs to capture natural gas, which is lost to flaring under current practices, Abdel-Mahdi said at a press conference. Iraq is producing oil at record levels, but officials are targeting even higher output to meet budget projections and finance reconstruction projects after 16 years of war.
Chaos in FBR as govt aims for budget on May 22
The government is aiming to announce the federal budget on May 22, according to a communication received at the tax bureaucracy last week, as confusion reigns over the status of the current and incoming chiefs of the Federal Board of Revenue (FBR). Meanwhile, the summary to appoint Shabbar Zaidi, a Karachi-based chartered accountant, as new chairman of the FBR was returned by the cabinet since it contained powerful reservations about the appointment. Jehanzeb Khan had been conducting in-house meetings to coordinate the drawing up of a revenue plan and projections that are necessary preparatory work for any budget exercise when he learnt from television reports on Friday night that a decision had been made to end his tenure as FBR chairman. Since a transfer order to that effect had not been received by him, sources at the FBR told Dawn, he continued with his assignment, discharging his responsibilities on Saturday as well.

MLCF, PAEL, EFOODS and PPL would try to lead the positive momentum while DGKC, ISL, SNGP and ENGRO would remain under pressure.

The Benchmark KSE100 index have tried to bounce back from 35,500 points during last trading session after getting support from a descending trend line on daily chart. While a doji have been formatted on daily chart during last trading session and with occurrence of this formation chances of creation of a morning shooting star have become evident. But for completion of this bullish formation index needs to close above 35,860 points at day end current trading session. Currently intraday momentum indicators are mixed therefore it seems that index would start with dip in first hour and if it would succeed in maintaining above 35,350 points then a sharp pull back would be witnessed before day end. It's recommended to stay cautious because some serious volatility could be witnessed during current trading session due to congested volumes.