KSE jumps on news of reduction in turnover tax

Approximately 108 million shares were traded during the day, KSE-100 index closes at 10,681.87 points.

KARACHI: Bullish sentiments prevailed at the local bourse on Tuesday as the market responded positively to the government’s decision to revert turnover tax to 0.5 per cent for oil marketing companies (OMCs), refineries and gas utilities, according to analysts.

“Bullish activity was witnessed as the federal government reduced turnover tax to 0.5 per cent,” commented Ahsan Mehanti, director at Arif Habib Investments.

The benchmark 100-share index at the Karachi Stock Exchange (KSE) gained 143.6 points, or 1.36 per cent, to close at 10,681.87 points. Approximately 108 million shares were traded during the day, compared with the total trade volume of 80.5 million shares recorded on Monday.

The scrip of Pakistan State Oil, the company which stands to gain the most from the tax rate reduction, went up by an impressive Rs13.15, or five per cent (the upper limit), to close at Rs276.34 per share.

“Refineries also greeted the news, with ATRL [Attock Refinery] hitting its upper limit and NRL [National Refinery] gaining 2.7 per cent. Pakistan Oilfields [POL] being the cheapest E&P [exploration and production] scrip on multiples remained highly sought after, gaining 2.2 per cent followed by shares of PPL [Pakistan Petroleum],” commented Jawad Khan from JS Global Capital.

Shares of 398 companies were traded on Tuesday. At the end of the day, 231 stocks closed higher, 146 declined and 21 remained unchanged. The value of shares traded during the day was recorded at Rs3.9 billion.

TRG Pakistan Limited led the market with a trade volume of 10.58 million shares. The scrip gained almost five per cent to close at Rs4.3 per share. “TRG remained the volume leader in expectation that a better result will be announced on Wednesday,” commented Samar Iqbal, an equity dealer.

Amtex Limited followed with a turnover of 5.58 million shares. The company’s stock went up by Rs0.07 to Rs5.34 per share.

Lotte Pakistan PTA, with trading of 5.55 million shares, came in third – the scrip closed at Rs10.34.

“Net foreign buying on the first day of the current month also boosted sentiments on Tuesday,” concluded Iqbal.

Published in The Express Tribune, November 3^rd, 2010.