Market watch: Stocks fall on new tax measures

KARACHI:

News of imposition of new taxes did not go well at the stock market on Wednesday, as investor interest remained low throughout the session.

The Karachi Stock Exchange (KSE) benchmark 100-share index ended 0.29 per cent or 34.67 points lower at 11,794.57.

The government on Tuesday announced an additional 15 per cent flood surcharge, coupled with 17 per cent sales tax on fertilisers, with the aim of generating additional revenue to the tune of Rs57 billion.

Continued selling pressure kept the local market depressed, despite improvement in regional markets, said Topline Securities equity dealer Samar Iqbal.

Trading volume fell to 108 million shares from the preceding day’s tally of 135 million.

Fauji Fertiliser Company remained under pressure throughout the trading session and traded with low volumes of 3.6 million shares due to imposition of the tax. The scrip fell Rs2.22 to close at Rs128.39.

Engro, on the other hand, saw some excitement, as the government allowed fulfilling 80 per cent gas requirement of a new fertiliser plant, which will help it resume test production by Thursday, said JS Global Capital analyst Mujtaba Barakzai.

Interest also remained strong ahead of the company’s proposed share offerings of its subsidiaries, said dealers. The conglomerate’s scrip rose Rs4.12 to close at Rs193.88.

Moreover, Pakistan Oilfields remained strong on talk of a new discovery, despite weakening international oil prices. The stock surged Rs3.4 to end at Rs313.64.

Shares of 347 companies were traded on Wednesday. At the end of the day, 105 stocks closed higher, 143 declined and 99 remained unchanged. The value of shares traded during the day was Rs5.24 billion.

Lafarge Pakistan was the volume leader with 14.48 million shares, declining Rs0.08 to finish at Rs3.25. It was followed by Nishat (Chunian) with 13.1 million shares, falling Rs0.26 to close at Rs28.03 and Fauji Fertiliser Bin Qasim with 6.76 million shares, gaining Rs0.43 to close at Rs39.

Published in The Express Tribune, March 17^th, 2011.