KARACHI: Pakistan Stock Exchange witnessed bullish trend and hit new historic highest-ever levels during the outgoing week ended on June 14, 2024 after no increase in tax rate on dividend and capital gain from stock market for filers against market rumors and increase in taxes on other asset classes continue to garner investor interest in the market.
The benchmark KSE-100 index surged by 2,952.75 points on week-on-week basis and closed at its highest ever level of 76,706.77 points.
Average daily trading volumes on ready counter, however, slightly decreased by 3.3 percent to 409.55 million shares during this week as compared to previous week’s average of 423.32 million shares while average daily traded value on the ready counter declined by 1.6 percent to Rs 16.90 billion during this week against previous week’s Rs 17.17 billion.
BRIndex100 increased by 347.66 points during this week to close at 8,041.64 points with average daily turnover of 305.836 million shares.
BRIndex30 soared by 835.12 points on week-on-week basis to close at 25,526.17 points with average daily trading volumes of 199.529 million shares.
Foreign investors however remained net sellers of shares worth $5.777 million. Total market capitalization increased by Rs 275 billion during this week to Rs 10.178 trillion.
An analyst at AKD Securities said that the market lost ground in the first two days of the week amidst rumors about potential increases in the Capital Gains Tax (CGT) due to which KSE-100 index stayed bearish, hitting 72,589 points before showing signs of recovery on Wednesday. The market however reacted swiftly after the announcement of Federal Budget’25, the taxation measures introduced in the budget weren’t as adverse as originally anticipated. Resultantly, Thursday witnessed the market gain by 3,410 points, most in a single day, with the benchmark index closing at 76,706 points on Friday reaching its highest ever closing, with a gain of 2,952 points/4.0 percent WoW.
Despite initial jitters over proposed tax changes, the market index fully recovered, reflecting investor confidence amidst pre-budget uncertainty. The week also saw the SBP announcing a first token rate cut of 150bps, adding further to the positivity. Furthermore, as inflation outlook eases, the cut-off yields in the latest T-bill auction dropped by 85/103/115bps for 3/6/12-month papers.
Sector-wise, Commercial Banks, Pharmaceuticals, Oil & Gas Exploration Companies, Oil & Gas Marketing Companies and Paper & Board were amongst the top performers, up 6.6 percent/5.7 percent/4.5 percent/4.3 percent/4.1 percent respectively. On the other hand, Textile Composite, Woollen, Leasing Companies, Food & Personal Care Products and Textile Spinning were amongst the worst performers, down 4.8 percent/2.8 percent/2.7 percent/2.1 percent/1.7 percent respectively.
Flow wise, major net selling was recorded by Individuals with a net sell of $8.9 million. On the other hand, Mutual Funds absorbed most of the selling with a net buy of $11.1 million.
Company-wise, top performers during the week were BAFL (up 12.9 percent), MCB (up 12.4 percent), NCPL (up 11.0 percent), UBL (up 10.6 percent) and KOHC (up 9.9 percent), while top laggards were ILP (down 13.9 percent), PTC (down 7.5 percent), YOUW (down 7.4 percent), COLG (down 6.4 percent) and PGLC (down 5.7 percent).
An analyst at JS Global Capital said that the KSE-100 index rallied 5.4 percent post the announcement of FY25 Budget, taking weekly gains to 4.0 percent. Subsequently KSE-100 index hit all time high levels of 76,707.
Investors welcomed clarity over Capital Gains Tax (CGT) which was not as draconian as first thought to be and would remain at 15 percent for filers. FY25 Budget has total outlay of Rs 18.9 trillion compared to the ambitious revenue target of Rs 17.8 trillion, taking FY25 fiscal deficit target to 5.9 percent of the GDP. On the expense side, the government announced 80 percent jump in PSDP to Rs 1.4 trillion and 27 percent increase in subsidies.
Copyright Business Recorder, 2024
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