KARACHI: The Karachi stock market went down by half a percent on Monday because of concerns about Pakistan’s relations with the United States and fears of new taxes in the next budget, traders said.
The benchmark Karachi Stock Exchange (KSE)-100 Index was down 58.16 points, or 0.49 percent, to 11,909.19 points following reports that the US government was pressurising Islamabad to do more to curb militancy, they said.
“Statements coming from the US officials regarding possible cut in trade ties are threatening,” said Khurram Schehzad, head of research at Investcap. “Bad things have surrounded us from all sides. The US government does not seem to care about Pakistan’s sacrifices.”
Volumes at the market plunged to just 44.8 million shares, indicating that individuals and institutions are wary of taking risk. The dismal trading has pushed many analysts to believe that relief can come only in the shape of tax cuts.
The KSE-30 Index of blue chip companies slipped 47.87 points to 11,567.16 points. Shares of 355 companies were traded out of which 119 advanced, 206 declined, while 30 remained unchanged.
Schehzad said that worsening perception of Pakistan has hit the foreign investment in stocks as well. “In the first quarter, the market saw net investment of $52 million whereas there was flight of $7 million in April alone.”
With budget preparation coming to its end, investors are worried about new taxes that the cash-strapped government might impose on corporate earnings, analysts said. Hamad Aslam, head of equities at BMA Capital, said that investors do not want to take bets in the current circumstances. “Trading in shares will remain lean until the budget comes out.”
Investors with cash see risk in stocks and prefer to invest in money market funds, he said. “Some companies like Fauji Fertilizer offer very good returns. But the macro-level issues undermine the micro delights.”
Qasim Ali Shah, head of equities at Global Securities, said that trading activity would increase if the government accepted KSE’s budget proposals regarding tax exemption for small investors.
“According to some reports, the Federal Board of Revenue (FBR) has accepted some of these proposals. Now we have to wait and see what sort of agreement is reached.” Some companies including the oil and gas ones are trading at attractive levels and offer good returns, he said.
Trading was marked by selling in Lotte Pakistan PTA. It was the second highest traded share with a volume of 5.7 million. It closed down 2.3 percent as PTA margins fell followed by a decline in price of cotton, analyst said.
With trade of 6.7 million shares, Jehangir Siddiqui was again the volume leader. It gained 0.8 percent to end the day at Rs7.19. Azgard Nine saw trade in 5.3 million shares. It was slightly down at Rs5.77.
LSE eases
By our correspondent
LAHORE: The Lahore Stock Exchange benchmark LSE-25 Index eased out of 3,200-level to close at 3,161 points, amid low trading volumes, dealers said on Monday.
Out of 114 active shares, only eight companies advanced, 43 declined and 63 companies remained unchanged. The trading volumes stood at 1.7 million shares. Lotte Pakistan PTA was the volume leader, recording a turnover of 31,639 shares.
Baring JGPL that added nominal value of Rs0.10 all the top 10 volume leaders were among the losers. Flying Cement Company was the top gainer with an increase of Re1 to close at Rs2.34. Oil and Gas Development Company was one of the two blue-chips featuring among the top eight gainers, adding 90 paisas to close at Rs148.54. Engro Chemicals Corporation was the top loser with a decline of Rs3.47 to close at Rs194.03.
The benchmark Karachi Stock Exchange (KSE)-100 Index was down 58.16 points, or 0.49 percent, to 11,909.19 points following reports that the US government was pressurising Islamabad to do more to curb militancy, they said.
“Statements coming from the US officials regarding possible cut in trade ties are threatening,” said Khurram Schehzad, head of research at Investcap. “Bad things have surrounded us from all sides. The US government does not seem to care about Pakistan’s sacrifices.”
Volumes at the market plunged to just 44.8 million shares, indicating that individuals and institutions are wary of taking risk. The dismal trading has pushed many analysts to believe that relief can come only in the shape of tax cuts.
The KSE-30 Index of blue chip companies slipped 47.87 points to 11,567.16 points. Shares of 355 companies were traded out of which 119 advanced, 206 declined, while 30 remained unchanged.
Schehzad said that worsening perception of Pakistan has hit the foreign investment in stocks as well. “In the first quarter, the market saw net investment of $52 million whereas there was flight of $7 million in April alone.”
With budget preparation coming to its end, investors are worried about new taxes that the cash-strapped government might impose on corporate earnings, analysts said. Hamad Aslam, head of equities at BMA Capital, said that investors do not want to take bets in the current circumstances. “Trading in shares will remain lean until the budget comes out.”
Investors with cash see risk in stocks and prefer to invest in money market funds, he said. “Some companies like Fauji Fertilizer offer very good returns. But the macro-level issues undermine the micro delights.”
Qasim Ali Shah, head of equities at Global Securities, said that trading activity would increase if the government accepted KSE’s budget proposals regarding tax exemption for small investors.
“According to some reports, the Federal Board of Revenue (FBR) has accepted some of these proposals. Now we have to wait and see what sort of agreement is reached.” Some companies including the oil and gas ones are trading at attractive levels and offer good returns, he said.
Trading was marked by selling in Lotte Pakistan PTA. It was the second highest traded share with a volume of 5.7 million. It closed down 2.3 percent as PTA margins fell followed by a decline in price of cotton, analyst said.
With trade of 6.7 million shares, Jehangir Siddiqui was again the volume leader. It gained 0.8 percent to end the day at Rs7.19. Azgard Nine saw trade in 5.3 million shares. It was slightly down at Rs5.77.
LSE eases
By our correspondent
LAHORE: The Lahore Stock Exchange benchmark LSE-25 Index eased out of 3,200-level to close at 3,161 points, amid low trading volumes, dealers said on Monday.
Out of 114 active shares, only eight companies advanced, 43 declined and 63 companies remained unchanged. The trading volumes stood at 1.7 million shares. Lotte Pakistan PTA was the volume leader, recording a turnover of 31,639 shares.
Baring JGPL that added nominal value of Rs0.10 all the top 10 volume leaders were among the losers. Flying Cement Company was the top gainer with an increase of Re1 to close at Rs2.34. Oil and Gas Development Company was one of the two blue-chips featuring among the top eight gainers, adding 90 paisas to close at Rs148.54. Engro Chemicals Corporation was the top loser with a decline of Rs3.47 to close at Rs194.03.
