Capital Value Tax on trading of shares

After the announcement of imposing Capital Value Tax on trading of shares in the finance bill of 2010-2011 there are many days where the downward trend has been observed in the stock exchange. After witnessing a mixed trend on Tuesday, the KSE-100 index finally closed at the level of 9,250.55 points with a net gain of 20.95 points. The market opened on a positive note as the investors took fresh positions on low levels and the index hit 9,369.38 points intra-day high, up 139.78 points.

However, uncertainties over imposition of Capital Gains Tax forced the investors to off-load their holdings after mid session and the index dropped into negative zone at 9,175.79 points intra-day low level, down 53.81 points. The index, however, managed to close in positive due to late buying in some selective stocks.

Trading activities remained low due to investors' lack of interest and the volumes at ready counter declined to 82.953 million shares as compared to 89.526 million shares traded on Monday. The overall market capitalisation increased by Rs 7 billion to stand at Rs 2.605 trillion. Out of the total 406 active scrips, 209 closed in positive and 175 in negative while the value of 22 scrips remained unchanged.

Lotte Pakistan was the volume leader with 12.057 million shares, however lost Re 0.12 to close at Rs 8.61. Hub Power Co declined by Rs 1.41 to close at Rs 30.74 with 10.603 million shares. BoP gained Re 0.47 to close at Rs 10.02 with 4.264 million shares. WorldCall Telecom increased by Re 0.19 to close at Rs 3.35 with 4.078 million shares. Jahangir Siddiqui Co inched up by Re 0.18 to close at Rs 11.33 with 3.469 million shares.

DG Khan Cement gained Re 0.44 to close at Rs 23.40 with 3.389 million shares. TRG Pakistan inched up by Re 0.07 to close at Rs 4.64 with 2.476 million shares. Lafarge Pakistan gained Re 0.03 to close at Rs 2.70 with 2.423 million shares. Lucky Cement increased by Re 0.23 to close at Rs 61.20 with 2.035 million shares. Nishat Mills lost Re 0.81 to close at Rs 44.05 with 1.966 million shares.

Siemens Pak and Unilever Pakistan were the highest gainers and increased by Rs 48.61 and Rs 46.55 to close at Rs 1022.10 and Rs 4050.00 respectively while Unilever Food and Hinopak Motor were the worst losers and declined by Rs 10.01 and Rs 4.17 to close at Rs 979.99 and Rs 118.50 respectively.

Ahsan Mehanti at Shehzad Chamdia Securities said that a mixed activity was witnessed as uncertainty loomed over pending capital gain tax issues in Pakistan capital markets. Although the market witnessed healthy opening on the back of expectations of positive outcome of meetings between senate standing committee and KSE officials on capital gain tax regulations for foreign and local investors scheduled on Wednesday. The recovery in global capital markets and rise in international oil prices also supported positive activity initially, however investors lack of confidence was also seen due to their concerns over lack of clarity on key budgetary issues.