100 Index gasping for breath as political climate worsens

KSE 100 Index dipped by more than 995 points or 2.5 percent yesterday posting the third largest decline during the year 2018. The bearish sentiment was fuelled by the worsening political situation after Federal Investigation Agency (FIA) barred presidents of three banks from flying abroad amid allegations of laundering money for politicians and businessmen.

In recent news, FIA has asked for Summit Bank’s (SMBL) equity details from Securities and Exchange Commission Pakistan (SECP) and the State Bank of Pakistan (SBP). The FIA is currently investigating an alleged money laundering case with sums exceeding Rs. 35 billion against the depositors and the beneficiaries. These beneficiaries include former President Asif Ali Zardari, his close aide Anwar Majeed and his company, The Omni Group and the Bahria Town scion Zain Riaz.

The action was initiated by the FIA after Supreme Court took a suo moto notice of 29 illegal accounts used to launder money for politicians. The accounts were opened in three banks – United Bank Limited, Summit Bank Limited and Sindh Bank Limited.

Furthermore, to ensure customer confidence in Summit bank, State Bank of Pakistan yesterday in a press release said that the Supreme Court's instructions provided in the order in no way pertain to the regular operations of the Summit bank and affects the depositor’s money. The said bank is working in normal manner and meeting its obligations towards depositors. All rumors circulating in the media, particularly social media, about the Summit Bank are baseless and misleading. The public in general and depositors of the Summit Bank, in particular, are advised not to pay attention to such rumors.

Pakistan’s Federal Board of Revenue registered a 11.4 percent growth in net revenue collection during the current fiscal. FBR recorded provisional net collection of Rs. 3,751 billion against Rs. 3,368 billion collected during the previous fiscal year. FBR has set revenue targets for Inland Revenue Service and Customs at Rs. 3,335 billion and Rs. 600 billion, respectively. Whereas, Customs revenues have surpassed its target by Rs. 6 billion, Inland Revenue fell short by Rs 190 billion.