PSX Daily Market Review - 19th Nov 2019
Previous Session Recap
Trading volume at PSX floor increased by 97.04 million shares or 26.30% on DoD basis, whereas the benchmark KSE100 index opened at 37,583.89, posted a day high of 38,452.73 and a day low of 37,583.89 points during last trading session while session suspended at 38,411.56 points with net change of 827.67 points and net trading volume of 268.79 million shares. Daily trading volume of KSE100 listed companies increased by 70.65 million shares or 35.65% on DoD basis.
Foreign Investors remained in net buying positions of 0.05 million shares and net value of Foreign Inflow increased by 4.25 million US Dollars. Categorically, Foreign Individual and Corporate remained in net selling positions of 0.72 and 0.29 million shares but Overseas Pakistanis Investors remained in net buying positions of 1.07 million shares. While on the other side Local Individuals, NBFCs and Mutual Funds remained in net buying positions of 37.32, 1.03 and 17.18 million shares but Local Companies, Banks, Brokers and Insurance Companies remained in net selling positions of 14.13, 24.37, 13.55 and 5.38 million shares respectively.
Analytical Review
Asian shares mixed as doubts grow on elusive U.S.-China trade deal
Asian share markets were mixed on Tuesday, as another day awaiting clearer news on the progress of U.S.-China trade negotiations left investors bereft of trading motivation.MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched 0.2% higher as hopes for stimulus in China lifted Shanghai blue chips by 0.8% and Hong Kong’s Hang Seng by 1%. Japan's Nikkei .N225, however, shed 0.2% and South Korea's Kospi 200 dropped 0.3%. Australia's S&P/ASX 200 rose 0.4%. Volumes were light across the board. E-Mini futures for the S&P 500 ESc1 were flat. “It’s subdued today for sure,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank’s Asia Treasury Department in Singapore, adding that focus was by default on efforts to resolve the trade war between the world’s two biggest economies that has dented global growth.
Bad loans surge to Rs768bn in 2018-19
The non-performing loans (NPLs) of the banking sector increased by more than 23 per cent during FY19 mainly because of energy, with contributions from public sector and the sugar industry. Testifying before a parliamentary panel on Monday, the State Bank of Pakistan (SBP) reported that the stock of NPLs in banking increased to Rs768 billion by end June, rising by 23.2pc or Rs144.4bn, from Rs623.6bn in last fiscal year. The SBP team, led by Deputy Governor Jamil Ahmad, also told the Senate Standing Committee on Finance and Revenue, led by Former chairman senate Farooq H Naik of PPP, that the gross NPLs to total loans of the banking sector also moved up to 8.8pc in June, from 7.9pc a year earlier. “Most of this increase was due to energy and sugar sectors, as they together accounted for more than 50pc of the rise,” SBP team reported in its presentation. “In energy, most of the rise in NPLs pertained to the public sector”.
Cotton output falls by 1.8m bales
Battered by climate change, the cotton production continues to give a gloomy picture as effects of high temperature, heavy rains and gusty winds reduced crop by around 1.814 million bales. Data released by Pakistan Cotton Ginners’ Association (PCGA) on Monday shows cotton production up to November 15 at 6.857 million bales, down 21 per cent over 8.671m bales in same period last year. A steep fall in cotton production in Punjab was the major factor which reduced overall output in the country. Sindh also suffered immensely due to impact of climate change. According to details, Punjab produced 3.692m bales as against 4.985m in corresponding period last year, showing a decline of around 26pc.
Interest rates to come down as inflation eases: SBP governor
The State Bank’s Monetary Policy Committee is independent and interest rate decisions are taken after considering inflation, SBP Governor Reza Baqir said on Monday while answering questions raised by the Karachi Chamber of Commerce and Industry (KCCI). Responding to KCCI demand for reducing the policy rates, he assured that the SBP would go for the same as soon as the inflation rate starts coming down. “Rest assured and trust us, we are moving gradually. We will cut down interest rate when inflation drops,” he remarked. Baqir, while detailing the economic improvements at the meeting, said the foreign investment is increasing whereas exports in quantitative terms are also rising.
Belgian envoy for strengthening economic ties with Pakistan
Ambassador of Belgium to Pakistan Philippe Bronchain has said that strengthening of trade, investment, economic and friendly relations between the two countries was his mission. He was speaking at the Lahore Chamber of Commerce & Industry on Monday. LCCI President Irfan Iqbal Sheikh presented the address of welcome while Senior Vice President Ali Hussam Asghar, Vice President Mian Zahid Jawaid Ahmad, Trade Commission of Belgian Embassy Abid Hussain, LCCI former Senior Vice President Amjad Ali Jawa, Executive Committee Members Haji Asif Sehar, Haris Attiq, Aaqib Asif, M Arshad Khan, Sh Sajjad Afzal, Wasif Yousaf, M Nusrat Tahir and Zeeshan Sohail Malik also spoke on the occasion.
Asian share markets were mixed on Tuesday, as another day awaiting clearer news on the progress of U.S.-China trade negotiations left investors bereft of trading motivation.MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched 0.2% higher as hopes for stimulus in China lifted Shanghai blue chips by 0.8% and Hong Kong’s Hang Seng by 1%. Japan's Nikkei .N225, however, shed 0.2% and South Korea's Kospi 200 dropped 0.3%. Australia's S&P/ASX 200 rose 0.4%. Volumes were light across the board. E-Mini futures for the S&P 500 ESc1 were flat. “It’s subdued today for sure,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank’s Asia Treasury Department in Singapore, adding that focus was by default on efforts to resolve the trade war between the world’s two biggest economies that has dented global growth.
The non-performing loans (NPLs) of the banking sector increased by more than 23 per cent during FY19 mainly because of energy, with contributions from public sector and the sugar industry. Testifying before a parliamentary panel on Monday, the State Bank of Pakistan (SBP) reported that the stock of NPLs in banking increased to Rs768 billion by end June, rising by 23.2pc or Rs144.4bn, from Rs623.6bn in last fiscal year. The SBP team, led by Deputy Governor Jamil Ahmad, also told the Senate Standing Committee on Finance and Revenue, led by Former chairman senate Farooq H Naik of PPP, that the gross NPLs to total loans of the banking sector also moved up to 8.8pc in June, from 7.9pc a year earlier. “Most of this increase was due to energy and sugar sectors, as they together accounted for more than 50pc of the rise,” SBP team reported in its presentation. “In energy, most of the rise in NPLs pertained to the public sector”.
Battered by climate change, the cotton production continues to give a gloomy picture as effects of high temperature, heavy rains and gusty winds reduced crop by around 1.814 million bales. Data released by Pakistan Cotton Ginners’ Association (PCGA) on Monday shows cotton production up to November 15 at 6.857 million bales, down 21 per cent over 8.671m bales in same period last year. A steep fall in cotton production in Punjab was the major factor which reduced overall output in the country. Sindh also suffered immensely due to impact of climate change. According to details, Punjab produced 3.692m bales as against 4.985m in corresponding period last year, showing a decline of around 26pc.
The State Bank’s Monetary Policy Committee is independent and interest rate decisions are taken after considering inflation, SBP Governor Reza Baqir said on Monday while answering questions raised by the Karachi Chamber of Commerce and Industry (KCCI). Responding to KCCI demand for reducing the policy rates, he assured that the SBP would go for the same as soon as the inflation rate starts coming down. “Rest assured and trust us, we are moving gradually. We will cut down interest rate when inflation drops,” he remarked. Baqir, while detailing the economic improvements at the meeting, said the foreign investment is increasing whereas exports in quantitative terms are also rising.
Ambassador of Belgium to Pakistan Philippe Bronchain has said that strengthening of trade, investment, economic and friendly relations between the two countries was his mission. He was speaking at the Lahore Chamber of Commerce & Industry on Monday. LCCI President Irfan Iqbal Sheikh presented the address of welcome while Senior Vice President Ali Hussam Asghar, Vice President Mian Zahid Jawaid Ahmad, Trade Commission of Belgian Embassy Abid Hussain, LCCI former Senior Vice President Amjad Ali Jawa, Executive Committee Members Haji Asif Sehar, Haris Attiq, Aaqib Asif, M Arshad Khan, Sh Sajjad Afzal, Wasif Yousaf, M Nusrat Tahir and Zeeshan Sohail Malik also spoke on the occasion.
Market is expected to remain volatile during current trading session.
Technical Analysis
The Benchmark KSE100 index is being capped by a horizontal resistant region at 38,530 points and this region would try to push index downward but penetration above said region would call for 38,900 points where it would face resistance from crossover of a horizontal resistance with a descending trend line. While on flip side index have supportive regions standing at 37,760 an 37,400 points. It's that index would try to target 39,200 points if it would succeed in maintaining above 37,800 points during current trading session therefore swing trading between 37,800 and 39,200 points is recommended until a clear breakout of either side take place.
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