KARACHI: Stocks ended lower on Wednesday on concerns that a delay in implementation of value added tax (VAT) could cause a halt in the International Monetary Fund’s programme under which the country is receiving $11.3 billion, dealers said.
According to a local media report which quoted unnamed sources, a delay in the implementation of VAT could cause a delay in the release of the sixth loan tranche.
The Karachi Stock Exchange (KSE) benchmark 100-share index fell 0.87 per cent, or 84.79 points, to end at 9,678.38.
“The possibility that the IMF may not be forthcoming in its future tranches due to non-implementation of VAT from the beginning of next fiscal year weighed on the market,” said Omar Ehtisham, fund manager at Faysal Asset Management Ltd.
The implementation of VAT to replace General Sales Tax by July 1 is one of the agreements made between the IMF and Pakistan.
The government announced in its budget for fiscal year 2010-11 that VAT would be implemented from October 1.
Wednesday’s turnover was 6.4 per cent lower at 122.2 million shares compared to Tuesday’s 130.6 million shares.
Second-tier stocks were the volume leaders while some activity in the oil, cement, fertiliser and banking sectors was also witnessed.
Total exchange value stood at Rs2.92 billion, over 26 per cent lower than Tuesday’s tally.
During the day’s trade, 137 stocks closed higher, 253 declined and 21 remained unchanged in value.
Lotte Pakistan (KSE: LOTPTA) was the volume leader with 40.16 million shares losing Rs0.98 to close at Rs9.63. TRG Pakistan (KSE: TRG) came second with 18.7 million shares losing Rs0.12 to close at Rs5.07. Arif Habib Securities (KSE: AHSL) finished third with 4.66 million shares gaining Rs0.06 to close at Rs35.1.
“Nishat Power witnessed healthy activity following the announcement of the initiation of its power plant’s commercial production,” said Ahmed Rauf, an analyst at JS Global Capital.
Gharibwal Cement (KSE: GWLC) was the KSE-100 top gainer of the day, its share price rising six per cent to Rs10.07.
Lotte Pakistan, the volume leader, was in the losers’ list hitting its lower limit dropping 9.24 per cent. The Bank of Punjab (KSE: BOP) closed in the red, its share price shedding 5.79 per cent to end at Rs11.23.
Published in the Express Tribune, June 10th, 2010.
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