- OUR STAFF REPORTER
However, in the short to medium term, the market is expected to be highly sensitive to the geo-political developments emerging in post-Osama scenario, future of the US-Pakistan strategic relationships and continuation of financial assistance from the US. In addition to these factors, the law and order situation and future of the IMF-supported Stand-By Arrangement Programme will set the market direction in months to come.
In a report issued by JS Global, it was stated that the upcoming budget might be a non-event for the oil and telecom sectors. On the other hand, increase in corporate tax rate for banks and insurance and potential removal of gas subsidy for fertilizers would bode negative for all three sectors in the coming financial year.
According to the report, the government is unlikely to withdraw the Capital Gain Tax on stocks trading, especially when the key focus is to bring in new sectors under the umbrella to broaden the tax base.
Pakistan market is trading at the cheapest PE multiples in comparison to its regional peers. The KSE-100 index is trading at a 2012F PE of 6.6x, and offers a steep discount of 48 per cent to the regional peers. Also, in comparison to the regional frontier markets the KSE is at a 44 per cent discount, the report said.
