“Rumours suggesting the return of margin products in the market and expectations that some requests made by brokers regarding CGT would be accepted by the FBR had transformed investor sentiment this week,” said JS Global Capital’s analyst, Ahmed Rauf.
KSE authorities and the Securities and Exchange Commission of Pakistan (SECP) met last month to discuss margin buying and other leveraged products, and decided to form a committee required to submit its recommendations within 15 working days.
A meeting of the stakeholders to discuss the issue took place on Thursday, and continued on Friday as well, and dealers said they expected a decision soon.
“A crucial meeting of the Karachi Stock Exchange with the FBR and the SECP acted as catalysts to boost KSE-100 index to touch an intraday high of 9,993 points. Local institutions and individuals actively participated as depicted from over 102 million shares turnover, healthiest volumes witnessed since July 1. Cements stocks remained in limelight on the back of handsome earning expectation,” said Topline Securities’ equity dealer, Samar Iqbal.
“We are hoping that leverage products would soon be reintroduced and that is definitely helping market sentiment, as visible in the improving volumes” said Sajid Bhanji, director at Arif Habib Ltd.
Dealers said another meeting was held between exchange officials and tax authorities on Friday to discuss the modalities of a new capital gains tax imposed from July 1, though no decisions were yet taken.
The absence of margin buying and the capital gains tax had hurt market sentiment in recent days, with volumes falling to their lowest in 18 months more than once this week.
However, dealers said they expected things to improve further in days ahead.
Of the 377 active stocks, 243 went up, 115 declined and 19 remained unchanged. The value of the stocks traded in the market was Rs4.12 billion.
DG Khan Cement rallied because of rising cement prices and closing at its upper circuit with the highest volumes of 8.0mn shares.
Byco Petroleum was the second volume leader with 7.4 million shares traded. Its stock price went up by Rs0.52 to end at Rs11.97.
JS & Co was the third volume leader with 6.2 million shares traded. Its stock price went down by Rs0.09 to end at Rs12.95
Published in The Express Tribune, July 10th, 2010.
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