How Pakistan Stock Exchange responded to Tax Amnesty Scheme
KARACHI – The capital market recorded recovery of more than 1000 points during the outgoing owing to much awaited amnesty scheme announcement with lot of incentives offered by the government to regularize the cash flows and assets.
The KSE-100 index gained nearly 1077 points or 2.4 percent closing at 46638 points where focus of the investors were mostly to the amnesty scheme where the government gave incentives to Pakistani who held their wealth abroad or inside after paying 2 percent to 5 percent of their assets, dollar, gold or securities.
The market during the entire week witnessed positive trend in anticipation of announcement of Amnesty scheme and government steps for resolution of external account woes.
During the outgoing week, cement and banking sector emerged as the top performers, contributing 195/194 points respectively, as investors sentiments improved in cement sector post recent jump in cement prices by Rs50/bag and investors’ expectations of passing of amnesty flows through banking channel.
Total shares turnover in the week showed jump of 8 percent, while value traded increased by 34 percent. Among participants, mutual funds remained net buyers of 45.4 million dollars whereas, banks remained net sellers of 15.9 million dollars. Moreover, foreign investors remained net buyer of 3.6 million dollars.
The week remained full of Budget-FY19 related news flows such as (1) proposal of cut in taxes for salaried class, (2) government eyeing fiscal deficit at 4.6% for FY19 with PSDP cut on cards, (3) Pakistan Banks Association proposing 2 percent collection charges given to banks for performing WHT agent and withdrawal of Super Tax and (4) Fertilizer industry urging government to abolish GIDC on feed gas. Moreover, news of government considering to abolish regulatory duty on steel wiped out partial gains of the Steel sector during the week, as the sector gained 2.9 percent on week on week basis only.