Morning Market Brief 12th Aug. 2020

The Benchmark KSE100 index have continued its bullish momentum after breakout of its rising wedge in bullish direction and now it's trying to extend expansion of that wedge towards 40,830pts and 41,200pts but this expansion would need huge volumes therefore it's recommended to stay cautious and post trailing stop loss on existing long positions. As of now it's expected that index would try to find some ground between 40,300-40,200pts initially in case of any bearish pressure while breakout below that region would call for 40,000pts. While on flip side index would try to continue its bullish journey towards 41,200 and 41,500pts if it would succeed in penetration above 40,830pts. Hourly momentum indicators are still in bearish mode despite of bullish spike of last trading session meanwhile hourly MACD have generated a clear bearish signal which could push index into correction zone anytime therefore it's recommended to stay cautious while initiating new long positions.

Asian stocks dipped on Wednesday on growing uncertainty over whether the U.S. lawmakers would agree on an additional round of big fiscal stimulus to support an economy still struggling with the novel coronavirus.E-mini futures for S&P500 were little changed after the news. The 10-year U.S. Treasuries yield dipped 2 basis points to 0.636% in Asia after hitting a one-month of 0.661% in previous U.S. trade. On top of hedge selling ahead of the largest-ever 10-year note auction later in the day, bonds have lost some of their safe-haven allure also on rising hopes of vaccines against COVID-19. President Vladimir Putin said on Tuesday that Russia had become the first country to grant regulatory approval to a COVID-19 vaccine after less than two months of human testing. While Moscow’s decision raised some eyebrows, the news lifted hope some of the vaccines currently in development would become available earlier than expected. Investors bought back hospitality industries stocks and other value-oriented shares, leading the old-economy centric Dow Jones to outperform high-flying Nasdaq. Globally, MSCI Value has risen 1.5% while MSCI Growth lost 1.3% so far this week.Read More...

The Federation of Pakistan Chambers of Commerce Industry (FPCCI) and Industry has urged the government to control volatility of rupee against the US dollar, as the industrial revival and economic growth is not possible without stability of local currency. FPCCI president said that Pakistani rupee continued its downward slide against the US dollar, moving in record low range of Rs167-168, having no sign of recovery, despite the fact that Pakistan’s Current Account Deficit (CAD) has reduced by 78 per cent owing to lower imports and better inflows. He said that the CAD fell to $2.97 billion during fiscal year 2019-20 while the import bill fell by 19 per cent to $44.57 billion during this period but rupee continued to sink. He said that sharp depreciation of rupee shows that Pakistan is again moving towards a trade deficit regime, which might jack up the current account deficit yet again. Read More...

The Securities and Exchange Commission of Pakistan has issued draft of amendments in the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 for public consultation. In order to promote an enabling business environment and provide Ease of Doing Business (EODB), the SECP, through these amendments, has proposed introduction of perpetual license for Non-banking finance companies by replacing the existing requirement of renewal of license after every three years. The SECP has also proposed to allow a single Non-Banking Finance Company to undertake different licensed activities. Moreover, the lending NBFCs will be required to obtain Private Equity and Venture Capital (PE&VC) license while, the Investment Advisors will be allowed to manage and launch exchange traded funds and listed collective investment schemes. Read More...

Pakistan LPG Marketers Association (PLPGMA) has appealed the federal government to end the discriminatory taxes and petroleum levy (PL) on LPG produced in Pakistan. “Domestically produced LPG is subject to 17% GST and petroleum levy of Rs. 4,669 per metric ton, whereas imported LPG is subject to only 10% GST and is exempted from petroleum levy/regulatory duty,” said Farooq Iftikhar, chairman of PLPGMA while addressing a press conference at Lahore Chamber of Commerce and Industry in Tuesday. “LPG is a poor man’s fuel and is used by people living in rural and far flung areas of Pakistan that do not have access to Sui gas. It is used by people with meager incomes who want to cook with a clean fuel and not use wood or biomass,” he said. Approximately 70% of Pakistan’s LPG requirements is met through indigenous LPG production from refineries and gas fields whereas the remaining 30% is imported.Read More...

The Sensitive Price Indicator (SPI) based weekly inflation for the week ended on August 6, for the combined consumption group, witnessed nominal decrease of 0.06 per cent as compared to the previous week. The SPI for the week under review in the above mentioned group was recorded at 134.23 points against 134.31 points registered in the previous week, according to the latest data of Pakistan Bureau of Statistics (PBS). As compared to the corresponding week of last year, the SPI for the combined consumption group in the week under review witnessed an increase of 8.47 per cent. The weekly SPI with base year 2015-16=100 is covering 17 urban centres and 51 essential items for all expenditure groups.Read More...