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Author: Mrs. Anjum Shahnawaz

  • Stock market rebounds; gains 637 points

    Stock market rebounds; gains 637 points

    KARACHI: The stock market rebounded on Tuesday after massive losses a day earlier on world oil price fall and coronavirus fear.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 37,696 points as against 37,059 points showing an increase of 637 points.

    Analysts at Arif Habib Limited said that the market rebounded today erasing most of the losses sustained yesterday.

    Market opened on a positive note today with +145 points, however, dipped again and lost 145 points (intra-day).

    Oil & gas stocks kept the selling pressure on, due to low oil prices that maintained a plateau of around U$34/bbl.

    Interestingly, both OGDC and PPL, which were offered in huge quantities at lower lock yesterday got disposed off at and around today’s lower circuit breakers.

    PSO turned out to be the head turner today with a positive opening, and closing the session at upper circuit.

    Cyclicals, Cement and Steel sector stocks were on back burner in relative terms, although leading stocks managed to post decent volumes.

    Cement sector posted volumes of 86.2 million shares, followed by O&GMCs (43.5 million) and Banks (28.8 million). Among scrips, MLCF realized 27.9 million shares, followed by PPL (23.6 million) and FCCL (16.1 million).

    Sectors showing performance include E&P (-152 points), Banks (+353 points), Fertilizer (+112 points), O&GMCs (+93 points), Chemical (+39 points) and Pharma (+32 points).

    Volumes declined from 307.9 million shares to 274 million shares (-11 percent DoD). Average traded value however, increased by 46 percent to reach US$ 106.7 million as against US$ 73.3 million.

    Stocks that contributed significantly to the volumes include MLCF, PPL, FCCL, OGDC and KEL, which formed 36 percent of total volumes.

    Stocks that contributed positively include HBL (+101 points), BAHL (+64 points), MCB (+60 points), PSO (+50 points) and ENGRO (+45 points).

    Stocks that contributed negatively include PPL (-85 points), POL (-61 points), OGDC (-36 points), LUCK (-19 points), and HMB (-8 points).

  • Rupee ends down by 87 paisas against dollar

    Rupee ends down by 87 paisas against dollar

    KARACHI: The Pak Rupee fell by 87 paisas against dollar on Tuesday amid recovery in stock markets.

    The rupee closed at Rs157.45 to the dollar from previous day’s close of Rs156.58 in interbank foreign exchange market.

    The local unit witnessed Rs3.20 decline during past two days against the dollar.

    Currency dealers said that the currency market was volatile during the day due to massive decline of stock markets in the UK and the US. They said that the market was anticipating outflows of foreign investment from the domestic debt market.

    The foreign currency market was initiated in range between of Rs157.25 and Rs157.75. The market recorded day high of Rs158.00 and low of Rs156.50 and closed at Rs157.45.

    The exchange rate in open market, however, maintained the levels. The buying and selling of dollar was recorded Rs156.70/Rs157.00, the same previous day’s closing in cash ready market.

  • PSX ready for operation in case of coronavirus lockdown: CEO

    PSX ready for operation in case of coronavirus lockdown: CEO

    KARACHI: Pakistan Stock Exchange (PSX) has evolved strategy to remain operational in case of any lockdown due to coronavirus, Farrukh Khan, Chief Executive Officer (CEO) of PSX said on Tuesday.

    He was talking with the media at an event organized at the PSX for women empowerment.

    “We have made efforts. IT teams and other business departments have made strategy for making stock market operational,” he said while referring to new cases and in case situation further deteriorated and lead to lock-down.

    Farrukh said that last days significant fall at world stock markets was due to coronavirus, which had economic impact.

    “Entire Italy is locked down. It has serious impact on world economy,” he said adding that other reason was massive fall in world oil prices.

    He hoped that economy would grow on falling oil prices. The developments has given room for reducing interest rate.

    He said that reduction in interest rate would help the stock market and the economy.

  • Philip Morris declares Rs2 billion after tax loss

    Philip Morris declares Rs2 billion after tax loss

    KARACHI: Philip Morris Pakistan, the leading cigarette manufacturer in the country, has declared after tax loss of around Rs2 billion for year ended December 31, 2019.

    The losses have been mainly attributed to Rs2.44 billion operating losses, the company said on Monday.

    Philip Morris Pakistan is a Pakistani tobacco manufacturing company, which is a subsidiary of Philip Morris International, has declared loss after tax of Rs1.98 billion for the year 2019 as compared with profit of Rs543 million in the preceding year.

    The company declared loss per share of Rs32.15 for the year under review as compared with earnings per share of Rs1.68 in the year 2018.

    The company recorded an operating loss before tax of Rs2.44 billion for the year ended December 31, 2019 compared with an operating profit before tax of Rs640 million in 2018.

    The operating loss before tax was mainly due to management decision to reorganize its operational footprint by closing its factory in Kotri, which was essential to ensure long term sustainability of the business in Pakistan considering the unpredictable fiscal environment.

    The company further said that excluding the one off impairment / employees separation costs which was a result of the closure of the Kotri factor and GLT Voluntary Separation Scheme, the company would have recorded an operating profit before tax of Rs357 million for the year ended December 31, 2019 instead of operating loss before tax.

    The company declared net turnover of Rs13.33 billion for the year as compared with Rs16.199 billion in the year 2018.

    The company declared gross profit of Rs4.19 billion in the year 2019 as compared with Rs6.02 billion in the preceding year.

  • Sindh Revenue Board suspends sales tax registration of 18 construction companies

    Sindh Revenue Board suspends sales tax registration of 18 construction companies

    KARACHI: Sindh Revenue Board (SRB) has suspended registration of 18 construction companies for defaulting tax payments and failure to file monthly sales tax returns.

    The SRB has directed the companies to make compliance with the provincial tax laws by March 12, 2020 otherwise their cases would be proceeded for cancellation.

    Following companies have been suspended for non-compliance:

    01. M/S CATALYST ENGINEERING SERVICES

    02. M/S START CONSTRUNCTION COMPANY

    03. M/S. A.H BUILDERS & CONSTRUCTION COMPANY

    04. M/S. ROCCRETE CONSTRUCTION & CO

    05. M/S. GUL MEMON CONSTRUCTION COMPANY (GOVERNMENT CONTRACTOR)

    06. M/S. JD BUILDERS

    07. M/S ABDULLAH RAHOO & COMPANY

    08. M/S MUHAMMAD AYOOB ENTERPRISES

    09. M/S MALIK NAVEED CONSTRUCTION COMPANY

    10. M/S SHOUKAT ALI & COMPANY

    11. M/S MUMTAZ ALI KHUSKH (GOVERNMENT CONTRACTOR)

    12. M/S JUMAN S/O ALLAH BACHAIO SHEEDI

    13. M/S RAMEEZ RAJA CONSTRUCTION COMPANY

    14. M/S A.KAREEM & SONS

    15. M/S MALIK MUHAMMAD SAEED GOVT & CIVIL CONTRACTOR

    16. M/S REMIX CONSTRUCTION

    17. M/S BISMILL CONSTRUCTION CONTRACTING COMPANY

    18. M/S MEHRAJ COMPANY

    During suspension period the companies are unable to deal with registered persons and also not able to get government contracts.

  • Rupee depreciates by Rs1.17 against dollar in early trading

    Rupee depreciates by Rs1.17 against dollar in early trading

    KARACHI: The Pak Rupee witnessed significant decline at the opening of trade on Tuesday. The rupee lost Rs1.17 paisas against dollar in early trade, dealers said.

    The dollar is being traded atRs157.75 to the dollar from last day’s closing of Rs156.58 in interbank foreign exchange market.

    Currency experts said that the massive losses in world stock markets motivated investors to consolidate their funds. Due to these reasons outflows in portfolio investments in debt securities market would had happened.

    The rupee lost Rs3.51 in last two days.

  • Tax collection from profit on banking deposits jumps up by 185%

    Tax collection from profit on banking deposits jumps up by 185%

    KARACHI: The collection of withholding tax from profit on banking deposits surged by 185 percent during first eight months (July – February) 2019/2020 owing to higher interest rates maintained by the central bank.

    The withholding tax collection from profit on debt (banking deposits) increased to Rs43.75 billion during first eight months of current fiscal year as compared with Rs15.32 billion in the same period of the last fiscal year.

    The sources in Regional Tax Office (RTO)-II, Karachi, a revenue collecting arm of the FBR said that that due to prevailing high rate ofinterest attracted bank deposits.

    The State Bank of Pakistan (SBP) has keptpolicy rate unchanged at 13.25 percent. The policy rate was gradually increasing since August 2018 when the rate was 7.5 percent.

    The sources explained that under Section 151(1)(b) withholding tax is collected on profit on debt paid by banking companies or financial institutions on account or deposit maintained.

    Every banking company is required to collect 10 percent of the gross yield/profit paid up to Rs500,000 or 15 percent of the gross yield / profit paid exceeding amount Rs500,000 at the time the profit on debt is credited to the account of the recipient or is actually paid, whichever is earlier.

    The sources said that it is mandatory for the banks to collect double the amount of withholding tax from those persons receiving profit on debt but not on the Active Taxpayers List (ATL).

    The government through Finance Act, 2019 introduced 10th Schedule to the Income Tax Ordinance, 2001 to enhance the rate of withholding tax by 100 percent on certain transactions.

    The measure has been taken to force persons making large transactions and paying withholding tax on such transactions but remained outside the tax net.

    The sources said that after the implementation of the 10th Schedule the pace of return filing for Tax Year 2018 increased in order to avoid paying 100 percent higher rate of withholding tax.

  • SBP to announce monetary policy on March 17

    SBP to announce monetary policy on March 17

    KARACHI: State Bank of Pakistan (SBP) will announce monetary policy statement for next two months on March 17, 2020, a statement said on Monday.

    The monetary policy committee (MPC) will review the existing policy rate along with economic indicators and inflation.

    The SBP kept the policy rate at 13.25 percent during the three policy statement.

    The SBP kept the policy rate unchanged at 13.25 percent since July 2019 on the back of uptick in prices of consumer items.

    Market analysts anticipate 100 basis points cut in policy rate due to sharp decline in world oil prices and improvement in economic indicators.

  • FBR allows tier-1 retailers to integrate POSs by March 30

    FBR allows tier-1 retailers to integrate POSs by March 30

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed big retailers to integrate their point of sale (POS) with FBR’s online system by March 31, 2020 in order to avoid legal action.

    The FBR on Monday extended the date of online integration of Tier-1 retailers.

    The FBR said that it had condoned the time limit as provided in Sales Tax Rules, 2006 up to March 31, 2020, for online integration of tier-1 retailers’ POSs with board’s computerized system for real-time reporting of sales.

    However, this permission is subject to condition that the teir-1 retailers should furnish in writing their willingness to integrated all their POSs in terms of the rules to respective Regional Tax Offices (RTOs)/Large Taxpayers Units (LTUs) by March 15, 2020.

    Previously, the deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system.

    All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.

    Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:

    (a) a retailer operating as a unit of a national or international chain of stores;

    (b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;

    (c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;

    (d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers”; and

    (e) a retailer, whose shop measures one thousand square feet in area or more.

  • Stock market ends down by 1161 points despite sharp recovery

    Stock market ends down by 1161 points despite sharp recovery

    KARACHI: The stock market made significant comeback after intraday crash on Monday and trimmed the decline 1161 points to close the market.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) ended 37,059 points from last Friday’s closing of 38,220 points showing decline of 1161 points or 3.3 percent.

    The market witnessed decline of 2300 points in intraday trading.

    Analysts at Topline Securities said that KSE 100 index declined by 3.13 percent to close at 37,059 level, taking cue from international markets, where bears dominated following the deepest oil price cut by Saudi Arabia (sharpest decline since 1991) as OPEC failed to strike a deal with its allies regarding production cuts.

    Market witnessed its first ever halt as KSE 30 index made an intraday decline of 1200 (down by -7.4 percent), where rule states that if KSE-30 Index continues to trade 4 percent above or below its opening index value for consecutive 5 minutes, trading in all securities shall be halted for 45 minutes.

    E&P sector which declined by 7 percent in light of decline in oil prices was largely responsible for market halt, as the sector has a significant weight of 19 percent in KSE 30 index.

    Secondly, the expectation of a rate cut gained further momentum consigning banks to the depths with several index heavy banks (HBL,UBL, BAHL, BAFL, MEBL) hitting lower locks.

    As a result the 100 index was down 2,302 points at its lowest ebb.

    Some recovery was witnessed in the market on the back of cyclicals, as investor’s started cherry picking especially in the cement sector given the high leverage status.

    Trading volume and value for the day stood at 308mn shares and Rs.11.4 billion respectively. FCCL was today`s volume leader with 30.7 million shares.