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Pakistan Stock Exchange witnessed mixed trend during the first week after Eid holidays however ended on positive note on the back of healthy buying during last three days of the outgoing week. BRIndex100 gained 16.83 points on week-on-week basis to close at 3,734.74 points. Average daily volumes stood at 126.663 million shares.

BRIndex30 increased by 232.96 points to close at 19,058.45 points with average daily turnover of 96.775 million shares. KSE-100 index inched up by 67.66 points on week-on-week basis and closed at 35,572.95 points. Trading activities improved as average daily volumes on ready counter increased by 9.4 percent to 136.37 million shares as compared to previous week's average of 124.64 million shares. Average daily trading value increased by 10.2 percent to Rs 5.18 billion. Total market capitalization increased by Rs 4 billion to Rs 7.151 trillion.

An analyst at AKD Securities said that the week started off a negative note, with the market falling by about 1000 points on broad expectations of a negative budget, with market anticipating significant taxation measures to be adopted. However, the market pared losses in the remaining sessions of the week as market murmurs regarding deployment of market support fund gathered pace.

Contrary to broader expectations, Budget'19 was headline equities positive despite sectoral developments amid government of Pakistan's efforts to increase its tax base.

The leader board during the week included FFBL (up 11.4 percent), PIOC (up 9.8 percent), FFC (up 9.2 percent) and CHCC (up 8.9 percent), whereas laggards were PSMC (down 5.3 percent), PSO (down 4.6 percent), NBP (down 4.4 percent) and HASCOL (down 3.6 percent).

An analyst at JS Global Capital said following a long week of Eid holidays, the market opened this week to yet another bout of negativity, losing 938 points on the first day, before posting a recovery in the next three trading sessions to eventually close at 35,573, up by 0.2 percent on week-on-week basis.

The performance of the local bourse this week shadowed the timing of the federal budget, which was announced after market hours on Tuesday 11 June. Although new taxes were proposed or tax rates increased, they were mostly in line with the news flows that had been doing the rounds ahead of the budget. Once it was all over, the market underwent a relief rally from an oversold position. To provide a recap, some eye-catching taxes that were announced or certain changes proposed in the FY19-20 federal budget included efforts to increase the documented economy by broadening the tax net, FED to be applicable on automobiles of all engine sizes (previously only on over 1,700cc), zero-rating status to be withdrawn, introduction of treasury single account (it was mentioned during the budget speech, but not a part of the budget), FED to be increased to Rs 2/kg from Rs 1.5/kg on a 50kg cement bag (equivalent of Rs 25/bag) and (6) minimum turnover tax to be increased from 1.25 percent to 1.5 percent.

Copyright Business Recorder, 2019


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