PSX Closing Bell: Round Two

June 07, 2024 (MLN): Pakistan’s benchmark stock index surged by most in a year on Thursday following the announcement of budget 2024-25 yesterday, which ended uncertainty regarding hike in capital gain or dividend taxes.

The KSE-100 index jumped 3,410.7 points or 4.7% to a record high of 76,208.

This was the largest single-day increase in point terms in history, and the highest percentage increase since the International Monetary Fund's (IMF) bailout package last year.

The index remained positive throughout the day, showing an intraday high of 76,338.15 (+3,540.72) and a low of 73,329.80 (+532.37) points.

The total volume of the KSE-100 index was 344.98 million shares.

Of the 100 index companies 87 closed up, 9 closed down, while 4 were unchanged.

The government decided to set the capital gains tax at a flat rate of 15% for filers for the sale of securities acquired on or after July 01, 2024.

For non-filers, the gain will be taxed at normal rates with a minimum rate of 15% and a maximum rate of 45%.

Arif Habib Limited in its budget review said, "We believe that the change in the CGT rate was one of the major uncertainties and caused panic in the market during the last couple of weeks.

"Maintaining the current CGT rates for filers would positively impact the market."

Similarly, AKD Securities in its budget review said, "The budget is neutral for the overall market, as a Capital Gains Tax (CGT) of 15% on purchases from July 2024 onward is imposed at a flat rate, given the holding period of less than one year for majority of retail and high-net-worth (HNW) investors."

KSE-100 index was supported by Commercial Banks (1,074.36pts), Oil & Gas Exploration Companies (578.9pts), Fertilizer (451.08pts), Cement (434.59pts), and Power Generation & Distribution (257.02pts).

On the flip-side, the index was let down by Textile Composite (68.44pts), Food & Personal Care Products (45.99pts), Leasing Companies (0.07pts), Woollen (0.02pts), and Vanaspati & Allied Industries (0pts).

Companies adding points to the index were HUBC (227.89pts), MCB (221.91pts), UBL (208.84pts), OGDC (208pts), and FFC (200.43pts).

Meanwhile, companies that dragged the index lower were COLG (62.23pts), ILP (60.76pts), KTML (6.02pts), SCBPL (2.59pts), and PKGP (2.32pts).

In the broader market, the All-Share index closed at 48,497.08 with a net gain of 1,662.79 points or 5.28%.

Total market volume was 635.53 million shares compared to 293.08m from the previous session while traded value was recorded at Rs30.75 billion showing an increase of Rs20.15bn.

There were 301,705 trades reported in 425 companies with 294 closing up, 87 closing down and 44 remaining unchanged.

To note, the KSE-100 has gained 34,755 points or 83.84% during the fiscal year, whereas the ongoing calendar year has witnessed a cumulative increase of 13,757 points, equivalent to 22.03%.

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