The actions in the Pakistan Stock Exchange (PSX) reached a historical maximum of 124,000 points on Wednesday, since the federal budget proposed for the next fiscal year was well received by investors for being “neutral to positive.”
The reference KSE-100 index rose 2,285.13, or 1.87 percent, to stand at 124,309.57 since the last closure of 122,024.44 at 11:49 am
Although there were uncertainties around fiscal measures before the budget announcement, the PSX remained optimistic yesterday and won almost 400 points to cross the 122,000 -point brand, just before the budget was presented in the National Assembly.
Awais Ashraf, research director at AKD Securities, said Dawn.com That the budget announcement was “well received by investors, mainly due to the absence of new taxes or levies in the stock market, relieving initial concerns.”
He pointed out: in general, the budget is considered neutral to positive for the listed sectors, with tax collection and fiscal deficit/primary objective of surpluses seen as not events, since we believe that they remain within the capacity of the authority to meet for fiscal year 26 “.
Despite a record tax deficit of RS1.07 billion registered for the outgoing fiscal year, the Government has established next year’s income objective at RS14.13TR, an increase of 18.7pc with respect to the revised estimate of this year of RS11.9TR, against the original budget objective of RS12.97TR.
Expanding the factors related to the stock market, Ashraf said that the increase in the tax rate of profits on debt and the “proportional imposition of taxes on mutual funds that depend on dividends received from debt and shares at a rate of 25 percent of mutual funds of 15 pieces, respectively, provide greater traction for the capital market.”
The Minister of Finance, Muhammad Aurengzeb, announced yesterday an increase in the tax rate on interest income from 15pc to 20pc, a measure that can discourage savings.
However, some entrepreneurs have described the proposed plan as a “camouflage budget” due to their unrealistic objectives and the lack of significant relief for both the business community and the general public.
The executive president of the Business Council of Pakistan, Ehsan Malik, pointing out “small mercies”, described the real estate sector as the “true winner” of the budget.
The Chamber of Commerce and Industry of Investors abroad (OICCI), Secretary General M. Abdul Aleem expressed its disappointment for the limited progress of the Government in addressing inequitable corporate tax rates.
More to follow
