KSE 100 index plunges by 497 points under correction

Amanullah Khan

Karachi

KSE 100 Index plunged by 497 points primarily under correction to close in red at 52138 levels here today.
It may be noted that on a general scale budgetary developments are negative for the market sentiment where increase in capital gain tax to a flat 15% on holding period of up-to 5 years, ) Increase in dividend tax to 15% and continuation of super tax are likely to be prime sentiment dampeners.
However, amendment made to mandatory distribution policy where 40% of profit will now have to be distributed either in cash or bonus to avoid a 10% tax on reserves may support market perception of Financial Year 2018 budget. According to market analysts, Pakistan Stock Exchange may witness some initial pressure following increase in taxes (both capital gains and dividend), however, PSX’s inclusion in MSCI-EM index from June 1st and robust economic indicators may result in a strong rebound in sentiments. Meanwhile the trading activity remained depressed amid an extremely low volume of 201 million all shares indicating the steep slash of the market volume. However the cement sector remained active and Power Cement right share were the volume leaders with a trade of 23 million shares to their creit. The other two volume leaders were Aisha Steel and the Bank of Punjab right share with trade volumes of 11 million and 10 million shares to their credit respectively.

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