April 22, 2019 (MLN): The market seems to be following an extremely bizarre trend, fortified uncontrollable by factors. The KSE-100 index, which was celebrating a clear cut victory in its last session, became a victim of some unsolicited events that took place recently, leading to a loss of 390 points in today’s session.
The first and foremost reason behind today’s disappointing performance, as per the media reports, was the IMF’s disagreement over the much talked about “Tax Amnesty Scheme”, which was due for an approval by the Prime Minister in the Federal Cabinet meeting that took place on April 17, 2019, and was ultimately postponed for approval in the next meeting.
The IMF has firmly stated that “such schemes fail to achieve their intended objectives and are quite damaging to the moral of obliging taxpayers”, the report said.
Secondly, the government’s decision to move to a single Value-Added Tax (VAT) system took another jibe at the equity markets. This new system, as part of an overall medium-term macroeconomic framework, envisages around Rs. 1.25 trillion increase in federal and provincial revenues for the government.
Further negative sentiments emanated from the possibility of Pakistan failing to fulfil the 10 FATF requirements, which means that it could continue its stay on the grey list.
Commercial Banks once again stood at the receiving end of the losses that were witnessed on the trading floors, as it lost around 117 points. This was followed by E&P companies which lost 39 points during today’s session.
The scrips that significantly influenced the benchmark index’s performance included HBL (-2.84%), PPL (-1.05%), MCB (-1.18%), LUCK (-1.65%) and FFC (-1.07%).
Moreover, the index witnessed trading of 104 million shares of the listed scrips, having a total value of Rs. 4.1 billion. Engulfed within a range of 639 points, the index touched an intraday high of 37,479 points and an intraday low of 36,839 points.
Meanwhile, the broader KSE All Share index lost around 261 points and closed the session at 26,967 points. It traded nearly 125 million shares, having a value of Rs. 4.4 billion.
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