Stocks rise one per cent

KARACHI: Pakistani stocks rose one per cent on Friday, trading was thin as investors remained cautious about the impending meeting between members of the Karachi Stock Exchange (KSE) and the Federal Bureau of Revenue (FBR).

The KSE-100 91.34 points, up 0.97 per cent, to end at 9,471.12 points. However, volumes decreased by 32.6 per cent to 67.76 million shares compared with 100.51 million shares traded a day earlier.

Investors are unsure of how the proposed tax regime will work in practice, so the KSE members are going to meet members of the Federal board of revenue to clarify some issues about the Capital Gains Tax (CGT) which was announced for the fiscal year 2011.

A few investors bought at lower levels at attractive prices after the KSE-index fell more than three per cent on Thursday, said a few dealers.

A capital gains tax of 10 per cent will be imposed on stocks held for six months or less and a similar tax of 7.5 per cent will be imposed on stocks held between six months and a year.

“The local bourse rebounded today after yesterday’s selling; the early positive impetus was provided to the market when FBR announced that CGT would be applicable on purchases made after 1 July, 2010,” said JS Global Capital’s analyst, Ahmed Rauf.

“Exchange value of the all share index; the value of the total shares traded, was at a 15-month low, at Rs1.74 billion,” said Topline Securities’ analyst, Furqan Punjani. He explained that investors were concerned about the CGT and its filing procedure which is why they were being cautious.

“Along with this, continued positive momentum in international markets and higher oil prices enhanced investors’ confidence to chip into the market,” he added.

Of the 380 stocks traded today, 250 went up, 110 went down and 20 remained unchanged. Trading was mixed and most of the volume leaders went up.

“The Cement sector was in the limelight as after local cement prices reverted to Rs265-270 per bag, from a low of Rs235 per bag, heavyweights D.G. Khan Cement and Lucky Cement closed 4.9 per cent and 2.3 per cent up, respectively.

Lotte Pakistan PTA, was the volume leader with 13 million shares traded. its stock price went up Rs0.29 to end at Rs9.37. Lafarge Pakistan was the second volume leader with 7.6 million shares. Its share price went up by Rs0.03 to end at Rs2.85. JS & Company was the third volume leader with 4.6 million shares. Its price went up by Rs0.16 to end at Rs12.15.

Fauji Cement was one of the winners of the day; its share price went up by 8.71 per cent. Pakistan Services and Royal Bank of Scotland were the losers of the day; their shares went down by 4.9 and 2.95 per cent respectively.

Published in the Express Tribune, June 12^th, 2010.