PSX Daily Market Review - 6th March 2020
Previous Session Recap
Trading volume at PSX floor increased by 153.74 million shares or 82.22% on DoD basis, whereas the benchmark KSE100 index opened at 38,992.89, posted a day high of 39,742.50 and a day low of 38,992.89 points during last trading session while session suspended at 38,382.11 points with net change of 475.71 points and net trading volume of 241.81 million shares. Daily trading volume of KSE100 listed companies also increased by 93.70 million shares or 63.26% on DoD basis.
Foreign Investors remained in net selling positions of 13.06 million shares and value of Foreign Inflow dropped by 3.18 million US Dollars. Categorically, Foreign Individuals, Corporate and Overseas Pakistani remained in net selling positions of 0.15, 0.04 and 12.86 million shares respectively. While on the other side Local Companies, NBFCs and Mutual Fund remained in net long positions of 20.42, 4.55 and 26.76 million shares but Local Individuals, Banks and Brokers remained in net selling positions of 22.05, 6.47 and 4.13 million shares respectively.
Analytical Review
Stocks suffer, Treasury yields plumb new depths as virus spreads
Asian shares and U.S. stock futures fell on Friday following another Wall Street rout as disruptions to global business from the coronavirus beyond China worsened, stoking fears of a prolonged world economic slowdown. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 1.3%. Australian shares were down 1.64%, while Japan's Nikkei stock index .N225 slid 2.29%. Yields on 10-year U.S. Treasuries fell to a record low and two-year yields fell to the lowest in more than three years as investors increased bets that the Federal Reserve will follow this week’s surprise 50 basis point rate cut with further easing to prevent corporate bond spreads from widening further. Tumbling yields hammered the dollar, which traded near a six-month low versus the yen and close to a two-year trough against the Swiss franc.
1,400 cargo trucks stranded at Taftan as border shut on coronavirus fears
More than 1,400 trucks loaded with goods are stranded at the Taftan border crossing after Pakistan temporarily closed its border with Iran over concerns of coronavirus, Dawn has learnt from knowledgeable sources. Pakistan closed its border with Iran on Feb 23 amid rising number of coronavirus cases and associated deaths. Balochistan, which shares 959km border with Iran, has already declared emergency in the province to contain the virus. Well-placed sources told Dawn that Tehran has requested Islamabad to allow trucks to enter into the country. “We are considering finding out ways for the clearance of goods,” the source said while adding the final decision is expected in the next couple of days.
PM for ‘out-of-box’ solution to energy crisis
Prime Minister Imran Khan on Thursday directed the authorities concerned to find an “out-of-the-box” solution to the energy crisis without putting any additional burden on the common man. “As years of corruption and inefficiency have weakened the foundation of the system, the emergency situation required out-of-box measures,” the prime minister said. The prime minister expressed these views while presiding over a meeting held here to review measures being taken for improving the efficiency of the state-owned institutions.
Soomro vows transparency in privatisation
The Privatisation Commission on Thursday discussed the divestment of up to 10 per cent shares of the Oil and Gas Development Company Ltd (OGDCL) and decided to seek approval of the Cabinet Committee on Privatisation in its next meeting. The committee on privatisation in its meeting in August 2019 had decided to divest up to 7pc of the government-owned shares in the OGDCL to generate non-tax revenue in order to retire national debt and give investors an opportunity to be part of the profit-making public sector enterprise. The meeting, chaired by Minister for Privatisation Muhamadmian Soomro discussed the share price trend of the OGDCL in the capital market.
Urea prices lowered to Rs1,665 per bag
Food Security Minister Makhdoom Khusro Bakhtyar on Thursday said the price of urea has been fixed at Rs1,665 per 50kg bag, which will provide relief to farmers especially as the standing wheat crop was at its final stages. He said that the price reduction was in line with the vision of the government to offer relief to farmers and ensure food security for the country. The minister was referring to the price reduction by Fauji Fertiliser Company (FFC) on Thursday to reduce urea price by Rs75 per bag effective from Mar 2 while the rate of fertilizer has declined in the wake of the Gas Infrastructure Development Cess waiver by the government.
Asian shares and U.S. stock futures fell on Friday following another Wall Street rout as disruptions to global business from the coronavirus beyond China worsened, stoking fears of a prolonged world economic slowdown. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 1.3%. Australian shares were down 1.64%, while Japan's Nikkei stock index .N225 slid 2.29%. Yields on 10-year U.S. Treasuries fell to a record low and two-year yields fell to the lowest in more than three years as investors increased bets that the Federal Reserve will follow this week’s surprise 50 basis point rate cut with further easing to prevent corporate bond spreads from widening further. Tumbling yields hammered the dollar, which traded near a six-month low versus the yen and close to a two-year trough against the Swiss franc.
More than 1,400 trucks loaded with goods are stranded at the Taftan border crossing after Pakistan temporarily closed its border with Iran over concerns of coronavirus, Dawn has learnt from knowledgeable sources. Pakistan closed its border with Iran on Feb 23 amid rising number of coronavirus cases and associated deaths. Balochistan, which shares 959km border with Iran, has already declared emergency in the province to contain the virus. Well-placed sources told Dawn that Tehran has requested Islamabad to allow trucks to enter into the country. “We are considering finding out ways for the clearance of goods,” the source said while adding the final decision is expected in the next couple of days.
Prime Minister Imran Khan on Thursday directed the authorities concerned to find an “out-of-the-box” solution to the energy crisis without putting any additional burden on the common man. “As years of corruption and inefficiency have weakened the foundation of the system, the emergency situation required out-of-box measures,” the prime minister said. The prime minister expressed these views while presiding over a meeting held here to review measures being taken for improving the efficiency of the state-owned institutions.
The Privatisation Commission on Thursday discussed the divestment of up to 10 per cent shares of the Oil and Gas Development Company Ltd (OGDCL) and decided to seek approval of the Cabinet Committee on Privatisation in its next meeting. The committee on privatisation in its meeting in August 2019 had decided to divest up to 7pc of the government-owned shares in the OGDCL to generate non-tax revenue in order to retire national debt and give investors an opportunity to be part of the profit-making public sector enterprise. The meeting, chaired by Minister for Privatisation Muhamadmian Soomro discussed the share price trend of the OGDCL in the capital market.
Food Security Minister Makhdoom Khusro Bakhtyar on Thursday said the price of urea has been fixed at Rs1,665 per 50kg bag, which will provide relief to farmers especially as the standing wheat crop was at its final stages. He said that the price reduction was in line with the vision of the government to offer relief to farmers and ensure food security for the country. The minister was referring to the price reduction by Fauji Fertiliser Company (FFC) on Thursday to reduce urea price by Rs75 per bag effective from Mar 2 while the rate of fertilizer has declined in the wake of the Gas Infrastructure Development Cess waiver by the government.
Market is expected to remain volatile during current trading session.
Technical Analysis
The Benchmark KSE100 index is being capped by a descending trend line on daily chart along with a strong horizontal resistant region at 39,580 and 39,760 points respectively. Meanwhile daily momentum indicators are losing their strength and it's expected that index would face some pressure during current trading session. It's expected that index would try to slide downward and would target 38,700 points initially. It's recommended to stay cautious and trade with strict stop loss because index is caged in a range bound situation and breakout of either above 39,760 points or below 38,700 points would push index further for 500-700 points in respective direction. If index would not succeed in closing above 40,250 points today than it would not succeed in creating a weekly bullish engulfing and mean while closing below 38,700 points would completely vanish expectation of weekly piercing line formation and bulls would start losing hopes. It's recommended to stay on selling with strict stop loss of 40,260 points.
To Open picture in original resolution right click image and then click open image in a new tab
Disclaimer
Information and opinions contained herein have been compiled or arrived at by Us from publicly available information and sources that We believe to be reliable. Whilst every care has been taken in preparing this research report, no research analyst, director, officer, employee, agent or adviser of any member of Our Team gives or makes any representation, warranty or undertaking, whether express or implied, and accepts no responsibility or liability as to the reliability, accuracy or completeness of the information set out in this research report. This research report is for information purposes only and does not constitute nor is it intended as an offer or solicitation for the purchase or sale of securities or other financial instruments. Neither the information contained in this research report nor any future information made available with the subject matter contained herein will form the basis of any contract.
High Risk Investment
Trading foreign exchange, Commodities and Equities (Stocks) on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, Commodities and Equities (Stocks) you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss in excess of your initial investment. You should be aware of all the risks associated with foreign exchange, Commodities and Equities (Stocks) trading and seek advice from an independent financial advisor if you have any doubts.
Market Opinions
Any opinions, news, research, analyses, prices or other information contained on in this report is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Accuracy of Information
The content of this report is provided for the sole purpose of assisting traders to make independent investment decisions. We have taken reasonable measures to ensure the accuracy of the information on the website; however, it does not guarantee accuracy and will not accept liability for any loss or damage which may arise directly or indirectly from the content or from your inability to assess the report, or for any delay in or failure of the transmission or the receipt of any instruction or notifications sent through this report.