KSE-100 index advanced 2.3 per cent to close at 11,338 points level, gaining 255 points over market rumours that the KSE board is sending proposals and is formally meeting FBR officials to convince them that individual investors be exempted from the Capital Gains Tax (CGT) and instead be taxed under the Presumptive Tax Regime.
Almost all major blue chip companies ended the day in ‘green’ in the face of major offshore selling reported in banking and fertiliser stocks. ENGRO jumped to its upper circuit breaker as foreign selling subsided and over rumors of urea price increase in the coming days, followed by FFBL hitting its upper circuit breaker. Oil advance was led by POL and OGDC gaining 1.3 per cent & 3.6 per cent respectively after MOL announced a discovery of 1,296 bbls of oil per day and 30 mmscf of gas per day in Manzalai-9. MCB was by far the best performer among banks jumping 2.5% over expectations of better earnings and payout with full year results.
The trading session was expected to follow its usual lackluster spell but strong rumours gripped the local stock market about removal of CGT. Furthermore the CGT would be replacing the old CVT which does not require much documentation. The rumour energised traders and punters aggressively stormed the market which pushed the benchmark upwards by 255 points. Irrespective of fundamental issues, most of the stocks were enjoying the high tide and the index sharply recovered.
Engro kissed the Rs90 mark and rebounded aggressively to close the day at Rs96.56. “Our economic management is still under the influence of IMF, hence we may not expect the removal of CGT in the near term if tax collection is well below the targets,” said Bilal Asif, Head of Research at HMFS. “If the rumour turned out to be correct, we can expect volumes to greatly improve which may improve the performance of the benchmark,” he added. The KSE 30 index closed at 10409.25 levels with the gain of 248.07 points, while All Share index closed at 7841.33 levels after gaining 167.24 points. Total 150 scrips advanced 79 declined and 83 remain unchanged out of total 312 scrips traded.
