Morning Market Brief 30th Apr. 2020

The Benchmark KSE100 index had succeeded in closing above its initial resistant region of 33,100pts during last trading session and now index have entered in some kind of consolidation zone where daily and hourly Bollinger band have squeezed and have become flat which indicates that a breakout on either side is going to happen in coming two or three days. It's recommended to stay cautious and wait for a breakout on either side and once index gave a clear breakout then immediately start initiating positions in respective side. Daily momentum indicators are showing that index would take a sharp spike initially towards 33,530pts and if it would succeed in maintaining above said region then a bullish breakout of current range bound situation would take place and index would continue its rally towards 34,000pts and 34,500pts.

While on flip side index have initial supportive region ahead at 32,780pts and this region would try to push index in upward direction but breakout below this region would call for 32,000pts where index would touch its pivotal value which is trying to pump some fresh volumes into market and bulls feel comfortable until this region is maintained while breakout below that region would push index for minimum 1,500-2,000 points.

Asian stocks rose to a fresh seven-week high on Thursday, lifted by encouraging early results from a COVID-19 treatment trial, though bonds and currencies held cautious ranges ahead of a European Central Bank meeting later in the day. The news rallied Wall Street on Wednesday and lifted MSCI’s broadest index of Asia-Pacific shares, excluding Japan .MIAPJ0000PUS, by 0.8% to its highest since mid-March. Japan's Nikkei .N225, returning from a holiday on Wednesday, jumped 2.5% to a seven-week high as well, catching up on the week's gains. More caution was evident in other asset classes, with the U.S. dollar firm and U.S. futures steady. “Any positive medical development is helpful,” said Westpac FX analyst Sean Callow.Read More...

The prices of petroleum products in Pakistan are set for a steep fall — up to 57 per cent — on Thursday (today) for a month owing to about 30pc slump in the international oil market. Though a decision would be announced in consultation with the International Monetary Fund (IMF) on Thursday, the Oil and Gas Regulatory Authority (Ogra) has worked out up to 57pc cut in various products’ prices with effect from May 1 based on existing tax rates. At present benchmark Brent crude prices have plunged by a massive 30pc to $20 a barrel from about $27 per barrel on March 25 when Pakistan last revised oil prices. The Brent crude price has tumbled by almost 65pc since February 25. This is the steepest fall in oil prices in recent history.Read More...

Export cargo handling at the Karachi ports declined nearly 42 per cent in the last 38 days owing to closure of shipping lines and order deferrals by international buyers. Karachi ports, which handle around 76pc of the country’s export cargo, have seen containers piling up at ports between March 22 to April 28 mainly due to order cancellations and non-availability of ships. Data compiled by the Pakistan Customs showed total export containers shipped between March 22 till April 28 fell to 43,114 from 74,421 in the same period last fiscal year, showing a decline of 42pc.Read More...

The federal budget 2020-21, to be announced in the first week of June, would focus on mitigating people’s sufferings through different measures including creation of job opportunities, Advisor to Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh said. The budget would be formulated considering the impact of COVID-19 on the people and businessmen, he said speaking in a private TV programme and hoped to meet their budget expectations. “This is the ‘corona-budget,’ so we would like to mitigate the sufferings of our people and give them a hope, provide them cash, food and recreate employment opportunities for them,” he said. In the past, austerity measures were placed as dominant feature of the budget, he said and added there still was need that the expenditures were made in a way so that the public money was not wasted. Dr Hafeez said the government money would be spent in a way so that troubles of the people suffering from coronavirus could be mitigated.Read More...

Pakistan had borrowed around $61 billion from international lenders in last five and half years (from July 2014 to December 2019). Pakistan had borrowed $24.427 billion from the multilateral development partners that constitute 40 percent of the total commitments. The new financing agreements $12.715 billion (21 percent) signed with the bilateral development partners to finance its development projects and implement structural and sectoral reforms in the country. In addition, the government had raised $16.272 billion (or 27 percent of total new agreements) from foreign commercial banks and $5 billion (8 percent) from the international capital markets to support its balance of payments and budgetary requirements. The government also received $2,500 million from China in the form of deposits to enhance its foreign exchange reserves.Read More...