The Karachi Stock Exchange’s (KSE) benchmark 100-share index on Friday fell by over one percent on across-the-board selling after the capital gains tax (CGT) ordinance – that allowed keeping the ‘source of investment’ undisclosed – was challenged in the court, dealers said.
“Reports that CGT ordinance has been challenged in the court forced investors to aggressively offload their shares,” said Samar Iqbal, an equity dealer at Topline Securities.
The benchmark KSE 100-share Index declined by 158.60 points, or 1.16 percent, to 13,558.70 points. The index moved both sides of the fence by 257.94 points, making an intra-day high of 13,768.27 points and a low of 13,510.33 points.
The KSE 30-share index dropped 162.18 points, or 1.37 percent, to 11,708.96 points.
Iqbal observed that across-the-board selling pressure was seen in the market but the cement sector took most of the brunt. DG Khan Cement fell by 2.7 percent with a turnover of 13 million shares. While oil stocks also fell in line with declining oil prices in world markets.
Stocks that played a major role in driving the benchmark index down were DG Khan Cement, Lucky Cement, Engro Foods Limited, National Bank of Pakistan, MCB Bank, Habib Bank Limited, Pakistan Telecommunication Company Limited (PTCL), Fauji Fertilizer Company, Pakistan Petroleum Limited, Oil and Gas Development Company Ltd. and Pakistan Oilfields Limited.
A total of 195 companies’ stocks closed under selling pressure out of total 353 companies’ stocks that were active on the board. However, stocks of 80 companies managed to close in positive territory while 78 companies’ stocks closed unchanged.
Moreover, about half a dozen stocks closed with over four percent decline in their share prices in the session.
These included Engro Foods Limited, PTCL and Byco Petroleum.
Hasnain Asghar Ali, head of equity sales at Invisor Securities, said that historically a low turnover price erosion on the eve of the monetary policy announcement led to the panic selling. Major sale was seen in frontline stocks, which resulted into a massive adjustment of more than 1.5 percent in the benchmark index during the session.
State Bank of Pakistan, however, announced to keep the discount rate unchanged at 12 percent for the next two-month period after the session at KSE concluded. Analysts, however, foresee a neutral impact of statue-quo in rate at the shares market.
Turnover improved by 12 percent to 124.43 million shares from 110.65 million shares traded in the previous session. Turnover in futures market surged to 13.14 million shares from 8.31 million shares traded a day earlier.
Market capitalisation declined by Rs39 billion to Rs3,468 billion.
Jahangir Siddiqui and Company was the turnover leader with 21.96 million shares and it closed at Rs13.93 with an increase of 90 paisas. It was followed by DG Khan Cement with turnover 13.08 million shares and it closed at Rs39.80 with a loss of Rs1.28. Engro Corporation was on the third position with 7.40 million shares turnover and it closed at Rs108.44 with a fall of Rs1.82.
Rafhan Maize Rs132.97
Closing Rs2,963.47
Mitehells Fruit Rs16.45
Closing Rs345.63
JDW Sugar Rs4.53
Closing Rs95.53
Unilever Pak Rs51.50
Closing Rs7,208.50
Sanofi Aventis Rs9.13
Closing Rs183.00
Shezan Int Rs8.65
Closing Rs199.90
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