Market watch: New tax measures pull down KSE 100-share Index

Benchmark index falls 497.97 points to end at 52,138.9

KARACHI: Government's decision to impose taxes on dividends and capital gains along with reintroduction of super tax hurt investors' sentiments at the stock exchange on Monday as they moved to book profits.

At close, the Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index recorded a fall of 497.97 points or 0.95% to end at 52,138.9.

According to a report of Elixir Securities, equities closed lower on the first trading day after budget announcement as losses in index names pulled the benchmark lower near 52,100 points.

"The market, after a sideways open, declined steadily as participants booked profits after government increased taxes on dividends and capital gains and extended super tax imposed two years ago on corporates for one more fiscal year," said analyst Ali Raza.



"Meanwhile, turnover in the wider market also stood low as anxiety over domestic politics likely kept most participants on the sidelines after a joint investigation team tasked to probe PM family's offshore assets intensified its investigations by reportedly grilling the premier's son for less than an hour.

"Major dent came from Habib Bank (-2.2%), Lucky Cement (-2.8%) and United Bank (-2.6%) while on the flip side Oil and Gas Development Company (+0.8%) managed to stay in the green and topped the leader board on reported institutional buying," he added.

On the other hand, JS Research analyst Arhum Ghous said that the market remained in a bearish mood throughout the day after Friday's budget announcement.



"The day's major laggards were Habib Bank (-2.24%), Lucky Cement (-2.81%), United Bank (-2.60%) and Pak Elektron (-3.93%) as they cumulatively contributed -247 points to the index," he said.

"The cement sector continued its previous trend as heavyweights such as Lucky Cement (-2.81%), DG Khan Cement (-1.52%) and Maple Leaf Cement (-2.05%) all closed in the red zone.

"Mixed sentiments were seen in the steel sector where Mughal Iron and Steel Limited (+5%) and Amreli Steels Limited (+5%) closed at their upper circuits, whereas Aisha Steel Mills (-1.51%) and International Steels Limited (-0.79%) closed in the red zone," he added.

Overall, trading volumes fell to 203 million shares compared with Friday's tally of 431.8 million.



Shares of 375 companies were traded. At the end of the day, 105 stocks closed higher and 258 declined while 12 remained unchanged. The value of shares traded during the day was Rs12.97 billion.

Power Cement (right shares) was the volume leader with 23.5 million shares, losing Rs0.04 to close at Rs2.79. It was followed by Aisha Steel Mills with 11.9 million shares, losing Rs0.39 to close at Rs25.39 and The Bank of Punjab (right shares) with 10.5 million shares, losing Rs0.02 to close at Rs1.78.

Foreign institutional investors were net sellers of Rs729.6 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.