Pakistani shares fall over one percent on budget worries

Pakistani shares fell over one percent on Monday as concern over an expected increase in the capital gain tax in next budget pushed skittish investors to offload economically sensitive stocks, dealers said.

“Correction was observed at the local bourse as investors expecting an increase in capital gain tax over the upcoming budget,” said Hammad Aman, analyst at Topline Securities

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed down 1.25 percent or 459.57 points to 36,234.69 points. The highest index level of the day remained at 36,694.26 points while the lowest level of the day was recorded at 36,182.11 points. KSE-30 Index shed 1.55 percent or 330.25 points to close at 20,913.02 points.  Turnover increased by 6 million shares to 205.44 million shares against 199.98 million shares, trading value fell to Rs9.18 billion against Rs9.43 billion while market capital decreased to Rs7.39 trillion against Rs7.46 trillion. Of a total of 380 companies’ active in the session, only 99 recorded in green, 263 in red while 18 remained unchanged.

Heavy weight stocks Habib Bank Limited, MCB Bank Limited, Fauji Cement, and Lucky Cement declined by 2.6 percent, 3.5 percent, 5 percent and 2.7 percent, respectively contributing 193 points to the fall combined.

HASCOL once again closed at its upper limit as board of directors of the company approved the establishment of a joint venture for developing oil storage/terminal facility.  “FCCL closed at its lower limit as one of its cement silo collapsed yesterday destroying the coal mill and damaging new production line of the company,” Aman said.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed bearish amid pressure in overbought scrips across the board on uncertainty ahead of Rs4.4 trillion federal budget 2016-7 approvals later this week.

Institutional support remained in cement and textile stocks on proposals for over Rs1.675 trillion development plans and exports growth package.

“Foreign outflows and concerns on likely higher taxes on corporate sector played a catalyst role in bearish close in the pre-budget session at PSX,” Mehanti said.

Highest increase was recorded in shares of Philip Morris Pak, which rose by Rs80.60 to Rs1,693.70/share, followed by Siemens Pak that increased by Rs40 to Rs909.99/share. Major decline was noted in shares of Colgate Palmolive, which fell by Rs45 to Rs1,480/share, followed by Ferozsons (Lab) that decreased by Rs35.94 to Rs960.83/share.

Significant turnover was recorded in stocks of K-Electric Ltd, Kohinoor Spinning, TRG Pak Ltd, Pak Int Bulk, Dewan Cement, TPL Trakker Ltd, Byco Petroleum, Jahangir Siddiqui Co, Japan Power and Sui Northern Gas Pipeline Limited (SNGPL).

K-Electric Ltd remained the volume leader with 22.71 million shares with a fall of 17 paisas to Rs7.60/ share. It was followed by Kohinoor Spinning with 15.73 million shares with an increase of 68 paisas to Rs6.28/share.

Shares’ turnover in the future contracts decreased to 39.86 million shares from 103.50 million shares traded in the previous session.