Stocks fall as govt kills corporate tax concessions

Stocks on Friday remained under pressure after the government promulgated the Ordinance effecting amendments to certain tax laws, which would result in withdrawal of Rs140 billion tax exemptions, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 Shares Index shed 0.45 percent or 204.54 points to close at 45,521.63 points.

Volumes increased to 529.2 million shares from 470.40 million shares in the last trading session.

The promulgation of the ordinance is one of the prior actions for the approval of the $500 million IMF tranche.

Earlier, government held out an assurance to the IMF to put in place the legislation in parliament before March 20 with an agreement that it will come into effect from July 1, 2021.

Ahsan Mehanti at Arif Habib Corp said stocks closed bearish amid pressure in scrips across the board on uncertainty over outcome of government’s Rs700 billion additional revenue measures, higher power tariff, and withdrawal of corporate tax exemptions.

“Investor concerns over IMF conditions for budgetary support, promulgation of ordinances for withdrawal of tax exemptions, and NEPRA autonomy impacting industrial tariff weighed on trade, Mehanti added.

KSE-30 shares index lost 0.68 percent or 127.87 points to close at 18,722.08 points.

As many as 391 scrips were active, of which 131 advanced, 238 declined and 22 remained unchanged. An analyst at Arif Habib Limited said last day of the rollover week saw market shedding 289 points during the session.

“Confirmation of amendment to the Income tax ordinance to take effect of withdrawal of Rs140 billion tax exemptions had bearing on steel, cement, fertiliser, oil and gas marketing companies, whereas banking sector stocks also went down due to overall selling pressure,” the analyst said.

Key subjects of rollover i.e., Netsol, TRG Pakistan also ended negative with the exception of Attock Refinery (ATRL), which traded positively throughout the session.

Topline Securities in a report said the market largely remained under pressure during the day.

The brokerage attributed the pressure to growing COVID cases, as the number of cases had crossed the psychological threshold of 4,000 cases to clock in at 4,368 (highest number after June 21, 2020).

Habib Bank (HBL), Bank Al Habib (BAHL), Pakistan State Oil, United Bank, and Lucky Cement cumulatively dented the benchmark index by 147 points.

Companies reflecting highest gains were Service Industries, up Rs52.53 to close at Rs1,064.74/share, and Indus motor Company, up Rs38.20 to close at Rs1,139.01/share.

Top losers were Bata Pakistan, down Rs90.6 to close at Rs1,959.4/share, and Nestle Pakistan, down Rs57.50 to end at Rs5,940/share.

Highest volumes were witnessed in Byco Petroleum that saw a turnover of 83.51 million shares.

The scrip gained 54 paisas to close at Rs11.54/share. Pakistan Refinery was second with a turnover of 56.42 million shares. It gained Rs1.92 to close at Rs28.53/share.

Pak Telecommunications was third with a turnover of 39.61 million shares. It gained 02 paisas to finish at Rs10.13.