PSX Daily Market Review - 3rd Oct 2019
Previous Session Recap
Trading volume at PSX floor increased by 0.63 million shares or 0.35% on DoD basis, whereas the benchmark KSE100 index opened at 32,250.06, posted a day high of 32,388.73 and a day low of 32,180.71 points during last trading session while session suspended at 32,363.35 points with net change of 109.03 points and net trading volume of 123.57 million shares. Daily trading volume of KSE100 listed companies dropped by 8.58 million shares or 6.49% on DoD basis.
Foreign Investors remained in net selling positions of 3.23 million shares and net value of Foreign Inflow dropped by 1.21 million US Dollars. Categorically, Foreign Individual & Corporate remained in net selling positions of 0.59 and 4.21 million shares but Overseas Pakistanis investors remained in net buying positions of 1.57 million shares. While on the other side Local Individuals, Banks, NBFCs and Insurance Companies remained in net selling positions of 3.41, 10.33, 0.02 and 0.63 million shares respectively but Local Companies, Mutual Fund and Brokers remained in net buying positions of 4.94, 6.65 and 0.79 million shares respectively.
Analytical Review
Asian stocks slide as U.S. tariffs on EU fan growth worries
Asian stocks skidded to a one-month low on Thursday after the United States opened a new front in its trade dispute with Europe by imposing tariffs, adding to already-growing market fears about global growth. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.78%. Japan's Nikkei stock index .N225 fell 2.20%, on course for its biggest daily decline in six months. Australian shares slumped 2.13% to a five-week low. U.S. stock futures ESc1 were up 0.25%, but this did little to bolster sentiment after shares on Wall Street suffered their sharpest one-day decline in nearly six weeks on Wednesday, when the three major New York share indexes all lost more than 1.5%. Yields on two-year U.S. Treasury yields fell as weakening data on manufacturing and the jobs market suggested the trade war with China has damaged the U.S. economy. Oil futures extended their decline in Asia as a bigger-than-expected increase in U.S. crude inventories and growing evidence of slowing economic growth point to lower energy demand.
Govt increases electricity price in haste: Nepra Chairman
NEPRA Chairman Tauseef H Farooqi has Wednesday acknowledged that the decision regarding the recent increase of Rs0.53 per unit (Rs 53.52 billion) on the account of previous year, adjustments was hurriedly made as the government had committed to IMF in this regard and in case of delay it would have negative impact on the country. For the previous year adjustments they have received request from a high quarter that’s why NEPRA had announced its decision about the adjustments of Rs53.52 billion on account of previous adjustments quickly, Chairman National Electric Power Regulatory Authority (NEPRA), Tauseef H Farooqi, said while replying to queries from media regarding haste in issuing the previous year adjustment decisions.
Ecnec approves projects worth Rs119bn
The Executive Committee of the National Economic Council (Ecnec) on Wednesday decided to transfer to the federal secretaries funds allocated for each approved project at the beginning of every quarter and approved Rs199 billion worth of seven development projects. The meeting presided over by the Prime Minister’s Adviser on Finance Dr Abdul Hafeez Shaikh approved a fresh mechanism under public finance management for simplification of process for release of funds for development projects. Under the revised mechanism, the project-wise funds (Rupee component) allocated in the Public Sector Development Programme (PSDP) to the ongoing approved projects would be released to the ministries and divisions during the first week of each quarter as per the criteria of the finance division. As such, 20 per cent funds would be at the disposal of ministries and divisions for first and second quarter each and 30pc for third and fourth quarter, without originating demand by the federal secretaries/principal accounting officers.
Cement exports jump 11.5pc
The country’s total cement despatches during 1QFY20 went up by 2.56 per cent to 11.133 million tonnes. Out of total sales, local despatches inched up to 9.116m tonnes from 9.063m tonnes while exports grew by 12.54pc to 2.017m tonnes from 1.792m in 1QFY19. In September, total despatches increased by 11.51pc to 4.270m tonnes compared to the corresponding period last year following rise in both local consumption and exports. During the month, domestic consumption reached 3.472m tonnes from 3.114m tonnes during the same month last year. Exports rose to 0.798m tonnes last month as compared to 0.715m tonnes in September 2018, up by 11.66pc.
Massive tariff hike to raise Rs125bn for power sector
In dramatic shocks to power consumers, the government on Wednesday increased electricity tariff by a cumulative Rs2.50 per unit to generate about Rs125 billion additional revenue for the power sector ahead of first quarterly review with the International Monetary Fund (IMF). In one of the decisions on Wednesday the Economic Coordination Committee (ECC) of the Cabinet “approved the additional charge of Rs0.30 per unit” for all consumers of electricity except residential consumers of less than 300 units per month, said an official statement. In another decision on Wednesday, the National Electric Power Regulatory Authority (Nepra) approved an increase of Rs1.66 per unit under automatic monthly fuel price adjustment for electricity consumed in August to generate about Rs23bn in additional revenue to the power distribution companies.
Asian stocks skidded to a one-month low on Thursday after the United States opened a new front in its trade dispute with Europe by imposing tariffs, adding to already-growing market fears about global growth. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.78%. Japan's Nikkei stock index .N225 fell 2.20%, on course for its biggest daily decline in six months. Australian shares slumped 2.13% to a five-week low. U.S. stock futures ESc1 were up 0.25%, but this did little to bolster sentiment after shares on Wall Street suffered their sharpest one-day decline in nearly six weeks on Wednesday, when the three major New York share indexes all lost more than 1.5%. Yields on two-year U.S. Treasury yields fell as weakening data on manufacturing and the jobs market suggested the trade war with China has damaged the U.S. economy. Oil futures extended their decline in Asia as a bigger-than-expected increase in U.S. crude inventories and growing evidence of slowing economic growth point to lower energy demand.
NEPRA Chairman Tauseef H Farooqi has Wednesday acknowledged that the decision regarding the recent increase of Rs0.53 per unit (Rs 53.52 billion) on the account of previous year, adjustments was hurriedly made as the government had committed to IMF in this regard and in case of delay it would have negative impact on the country. For the previous year adjustments they have received request from a high quarter that’s why NEPRA had announced its decision about the adjustments of Rs53.52 billion on account of previous adjustments quickly, Chairman National Electric Power Regulatory Authority (NEPRA), Tauseef H Farooqi, said while replying to queries from media regarding haste in issuing the previous year adjustment decisions.
The Executive Committee of the National Economic Council (Ecnec) on Wednesday decided to transfer to the federal secretaries funds allocated for each approved project at the beginning of every quarter and approved Rs199 billion worth of seven development projects. The meeting presided over by the Prime Minister’s Adviser on Finance Dr Abdul Hafeez Shaikh approved a fresh mechanism under public finance management for simplification of process for release of funds for development projects. Under the revised mechanism, the project-wise funds (Rupee component) allocated in the Public Sector Development Programme (PSDP) to the ongoing approved projects would be released to the ministries and divisions during the first week of each quarter as per the criteria of the finance division. As such, 20 per cent funds would be at the disposal of ministries and divisions for first and second quarter each and 30pc for third and fourth quarter, without originating demand by the federal secretaries/principal accounting officers.
The country’s total cement despatches during 1QFY20 went up by 2.56 per cent to 11.133 million tonnes. Out of total sales, local despatches inched up to 9.116m tonnes from 9.063m tonnes while exports grew by 12.54pc to 2.017m tonnes from 1.792m in 1QFY19. In September, total despatches increased by 11.51pc to 4.270m tonnes compared to the corresponding period last year following rise in both local consumption and exports. During the month, domestic consumption reached 3.472m tonnes from 3.114m tonnes during the same month last year. Exports rose to 0.798m tonnes last month as compared to 0.715m tonnes in September 2018, up by 11.66pc.
In dramatic shocks to power consumers, the government on Wednesday increased electricity tariff by a cumulative Rs2.50 per unit to generate about Rs125 billion additional revenue for the power sector ahead of first quarterly review with the International Monetary Fund (IMF). In one of the decisions on Wednesday the Economic Coordination Committee (ECC) of the Cabinet “approved the additional charge of Rs0.30 per unit” for all consumers of electricity except residential consumers of less than 300 units per month, said an official statement. In another decision on Wednesday, the National Electric Power Regulatory Authority (Nepra) approved an increase of Rs1.66 per unit under automatic monthly fuel price adjustment for electricity consumed in August to generate about Rs23bn in additional revenue to the power distribution companies.
Market is expected to remain volatile during current trading session.
Technical Analysis
The Benchmark KSE100 index is not becoming able to give a clear breakout of an upward wedge in either side since last many days and right now it’s getting resistance from resistant trend line of that wedge along with a horizontal resistant region. While daily bullish momentum is losing its strength and it’s expected that index would try to bounce back in downward direction after posting a triple top on a rising trend line which fall on 32,500 points on weekly chart and this pull back would result in a correction which would try to lead index towards 32,200 and then 31,700 points.
While on flip side if index would succeed in penetration above 32,500 points then a sharp spike could be witnessed with a narrow range towards 32,800 and then 33,200 points. It’s recommended to post trailing stop loss on long positions and start selling on strength with strict stop loss of 33,200 points.
While on flip side if index would succeed in penetration above 32,500 points then a sharp spike could be witnessed with a narrow range towards 32,800 and then 33,200 points. It’s recommended to post trailing stop loss on long positions and start selling on strength with strict stop loss of 33,200 points.
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