Persistent selling in frontline high priced stocks amid low volumes, budget nervousness and likely repercussions of the planned operation in North Waziristan, forced the benchmark to plunge in the negative zone. Speculative activity in FCCLR that contributed 40 percent to the total turnover kept volumes on a higher side. Moreover, the value of trade suffered a massive set back, as a total loss of 51 points comprised of an elimination of 36 points on 500 shares trade of Nestle and ULEVER combined.
Prudent investors took a cautious stance after yesterday’s newspaper indicated the imposition of a 15 percent income tax surcharge via ordinance as it is likely to impact the disposable income of individuals as well as that of the corporate sector. Furthermore, there was also news related to the imposition of new taxes after the IMF criticised government measures and asked for a reduction in the fiscal deficit, justifying the behaviour of the investors. Furthermore, an imposition of a 15 percent surcharge on income in the upcoming fiscal year is expected to tone down the corporate earnings for the FY12 and CY11. Hence, investors started re-rating their investments and valuations. The KSE 100 index closed at 12123.15 with the loss of 72.44 points and total volume stood at 30,793,665 along with the total value of 1,528,364,283. The KSE 30 index lost 35.60 points and closed at 11762.76 levels and the All Share index closed at 8439.75 after losing 48.80 points. Out of a total of 341 scrips traded, 84 scrips rose, 158 declined and 99 remain unchanged.
High volatility in the local political and geo-political situation and an impact of the former announcement regarding the federal budget on the expected date kept market participants on back foot. Various rumours suggesting different rates for the replacement of CGT and the transaction tax also contributed to the negative flow of the market.
