KARACHI: Bloodshed was witnessed on Pakistan Stock Exchange after the Prime Minister’s announcement of 10 percent incremental tax on certain sectors during the last trading session, wiping out more than gains made during the week.

The unexpected announcement took the week’s close in deep red with heavy losses. The news was pinned with some uncertainty over the tax year, however the named sectors account for a significant portion of the listed space.

The benchmark KSE-100 index plunged by 1,088.97 points on week-on-week basis and closed at 41,051.79 points. Trading activities however improved as average daily volumes on ready counter increased by 72.6 percent to 300.50 million shares as compared to previous week’s average of 174.15 million shares while average daily traded value on ready counter increased by 74.0 percent during this week to Rs 9.16 billion.

BRIndex100 decreased by 116.92 points during this week to close at 4,069.12 points with average daily turnover of 268.747 million shares.

BRIndex30 declined by 164.25 points on week-on-week basis to close at 14,926.22 points with average daily trading volumes of 193.361 million shares.

Total market capitalization declined by Rs 140 billion during this week and stood at Rs 6.862 trillion.

In the outgoing week, news flow was dominated by the accord between the government and the IMF, an analyst at AKD Securities said. On Tuesday, it was announced that an agreement had been reached, in which the government revised the FBR collection target for FY23 from Rs 7.0 trillion to Rs 7.4 trillion. Furthermore, on Friday the PM unexpectedly announced that a 10 percent Supertax will be imposed on large sectors in FY23, causing the KSE-100 to lose 1,665 points in one day, closing at 41,052 points (down 2.6 percent on WoW).

Sector-wise, top performing sectors were Vanaspati and Allied industries (up 6.5 percent), Power (up 4.7 percent), Tobacco (up 3.5 percent), Insurance (up 2.4 percent) and Refinery (up 2.2 percent), while the least favorite sectors were Automobiles (down 4.0 percent), Textile (down 3.9 percent), Cement (down 3.7 percent), Close-end Mutual Fund (down 3.5 percent) and Banking (down 2.9 percent).

Stock-wise, top performers in the KSE-100 were POML (up 18.7 percent), EFUG (up 13.5 percent), KEL (up 10.0 percent), SML (up 5.6 percent) and PAKT (up 4.3 percent), while laggards were CHCC (down 9.6 percent), KTML (down 9.4 percent), GATM (down 8.1 percent), MLCF (down 7.4 percent) and JVDC (down 6.8 percent).

Flow-wise, Insurance companies remained as the net sellers, offloading $8.4 million followed by Foreigners ($2.4 million), Mutual Funds ($1.1 million), NBFCs ($0.7 million) and Companies ($0.1 million). While Individuals, Banks, Brokers, and Other organizations were on the buying side, with a net buy of $7.0 million, $2.1 million, $0.2 million and $3.4 million respectively.

An analyst at JS Global Capital said that bloodshed was witnessed after the Prime Minister’s announcement of 10 percent incremental tax on certain sectors during the last trading session, wiping out more than gains made during the week.

The unexpected announcement took the week’s KSE-100 index close to down 1,089 points (down 2.6 percent on WoW). The news was pinned with some uncertainty over the tax year, however the named sectors account for a significant portion of the listed space. The local bourse had witnessed an increase of 576 points in the four trading sessions otherwise, as positive developments over talks with IMF emerged in news flows. With that, the PKR also witnessed some respite this week, which gained Rs 4.0, after touching an all-time low level of Rs 211.7 against US$.

Among out performers, the Refinery sector increased by 0.8 percent on WoW over anticipation of improving profitability led by ongoing escalation in GRMs. The Power sector was also among out performers this week, closing up 3.0 percent on WoW, over news of the second tranche approval to the 2002 Policy IPPs. Revival of confidence was also reflected in higher market participation with average daily traded volumes going up by 73 percent on WoW.

Copyright Business Recorder, 2022