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Author: Mrs. Anjum Shahnawaz

  • Stock market ends down by 203 points on lack of investors confidence

    Stock market ends down by 203 points on lack of investors confidence

    KARACHI: The stock market ended down by 203 points on Friday due to lack of investors confidence.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 33,672 points as against 33,875 points showing a decline of 203 points.

    Analysts at Arif Habib Limited said that the market remained lackluster today, following the trend seen in recent past sessions.

    The source of Low volumes and lack of investor confidence in equities appears to be higher interest rate, which was further aggravated by an earlier than anticipated schedule of Monetary Policy.

    As per SBP, Monetary Policy will now be announced on July 16 rather than end July, as earlier anticipated.

    HUBC, which have been in the limelight in past sessions remained negative amidst low volumes.

    Overall, index moved in the range of +126 points and -276 points, ending the second session at -193 points (unadjusted). Cement Sector led the volumes table with 9.6 million shares, followed by Power (7.8 million). KEL ranked first in terms of volumes with 6.9M shares, followed by MLCF (4.5 million).

    Sectors contributing to the performance include Cement (-40 points), Power (-28 points), O&GMCs (-27 points), E&P (-18 points), Autos (-18 points), Fertilizer (+33 points).

    Volumes increased by 40 percent DoD to reach 55.3 million shares as against 39.5 million.

    Average traded value also increased by 58 percent to reach US$ 14.3 million as against US$ 9.1 million.

    Stocks that contributed significantly to the volumes include KEL, MLCF, BOP, ESBLR and TRG, which formed 35 percent of total volumes.

    Stocks that contributed positively include FFC (+30 points), EFERT (+13 points), UBL (+10 points), HBL (+9 points) and MEBL (+3pt). Stocks that contributed negatively include PSO (-21 points), ENGRO (-15 points), HUBC (-15 points), POL (-12 points) and DGKC (-11 points).

  • Rupee continues losing streak against dollar

    Rupee continues losing streak against dollar

    KARACHI: The Pak Rupee continued losing streak on Friday amid higher demand for import and corporate payments.

    The rupee ends 31 paisas to close at Rs158.80 to the dollar from previous day’s closing of Rs158.49 in interbank foreign exchange market.

    The foreign exchange market was initiated in the range of Rs158.40 and Rs158.70. The market witnessed day high of Rs158.90 and low of Rs158.50 and ended at 158.80.

    Currency experts said that the rupee fell during the entire week despite inflows of $994 million from IMF two days ago.

    The exchange rate also witnessed depreciation of the rupee in the open market. The buying and selling of dollar was recorded at Rs158.70/Rs159.30 from previous day’s close of Rs158.50/Rs159.50 in cash ready market.

  • SBP to announce monetary policy on July 16

    SBP to announce monetary policy on July 16

    KARACHI: State Bank of Pakistan (SBP) will announce key policy rate for next two months of July 16, 2019, a statement said on Friday.

    The SBP said that the Monetary Policy Committee of the central bank would meet on Tuesday, July 16, 2019 at SBP Head Office Karachi to decide the policy rate.

    In the previous monetary policy announced on May 20, 2019, the committee decided to increase the policy rate by 150 basis points to 12.25 percent effective from May 21,2019.

    The decision was taken into account the considerations and the evolving macroeconomic situation, the committee noted that further policy measures are required to address underlying inflationary pressures from (i) higher recent month-on-month headline and core inflation outturns; (ii) recent exchange rate depreciation; (iii) an elevated fiscal deficit and its increased monetization, and (iv) potential adjustments in utility tariffs.

    Analysts at Arif Habib Limited said that the SBP would adopt a proactive stance to increase its benchmark policy rate by 100 basis points in July 2019 to address the underlying pressure on the economy.

    In its report issued on June 28, the analysts said that in addition, monetary tightening is expected on the back of i) rising inflationary pressure due to increase in prices of petroleum products, essential food items and price revision of utilities, ii) an elevated fiscal deficit and its increased monetization, and iii) recent exchange rate depreciation.

  • Cash payment above Rs5 million for immovable property to attract penalty of 5pc of total value

    Cash payment above Rs5 million for immovable property to attract penalty of 5pc of total value

    KARACHI: A person who purchases immovable property having fair market value greater than Rs5 million through cash or bearer cheque then the person is liable to pay five percent of the value of immovable property as penalty.

    From tax year 2020 starting July 01, 2019 the purchase of immovable property has been prohibited through any bearer instrument or cash if its value is above Rs5 million.

    According to the FBR if a person commits offence than such person shall pay a penalty of five percent of the value of property determined by the Board under sub-section (4) of section 68 or by the provincial authority for the purposes of stamp duty, whichever is higher.

    A new section has been inserted in the Ordinance which provides that purchase of assets set as out below shall now only be made through a crossed cheque drawn on a bank or through a crossed demand draft or crossed pay order or any other crossed banking instrument –

    (a) Immovable property having fair market value greater than Rs05 million; (b) Any other asset having fair market value of more than Rs01 million.

    For the purpose of this section, the fair market value means the value notified by FBR under Section 68(4) of the Ordinance or the value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.

    In the event, the transaction of purchase of the asset is not carried out in the manner prescribed above, such asset shall not be entitled for allowance of depreciation or amortization, as specified under the Ordinance.

    The amount paid other than in the specified manner shall not be regarded as cost under Section 76 of the Ordinance for the purpose of computing gain on disposal of such asset.

    In addition a penalty of five percent of the fair market value of the asset so purchased shall also be levied.

  • Consumers may not able to get 5pc sales tax rebate till FBR notification

    Consumers may not able to get 5pc sales tax rebate till FBR notification

    ISLAMABAD: General public may not be able to avail 5 percent rebate on their purchases until a notification is issued by the Federal Board of Revenue (FBR).

    Through Finance Act, 2019 a new proviso has been added wherein customers of Tier-1 retailers are entitled for pay-back up to 5 percent of sales tax involved in the sales tax invoice.

    This shall encourage the customers to demand sales tax invoice from registered retailers.

    “However, these provisions shall be applicable when the Board so notifies,” said the FBR in instructions to Inland Revenue offices regarding enforcing changes to sales tax laws made through Finance Act, 2019.

    The FBR informed the IR about changes made to regime of Tier-1 retailers.

    These changes are included option to pay 2 percent turnover tax has been withdrawn.

    Provisions relating to SRO 1125(I)/2011 under which zero-rate sales tax was available, have been omitted, thus subjecting textile and leather items to normal rate except for the integrated retail outlets for which the rate shall be 14 percent as per amendment in Eighth Schedule.
    Another new proviso aims at expanding the scope of real-time integration beyond textile and leather. These provisions shall become effective when the Board so notifies.

    After such notification, the input tax shall be reduced by 15 percent for retailers failing to integrate Point of Sales (POSs) in the prescribed manner, as provided in the newly inserted sub-section (6) in section 8B.

  • Raising loans on interest prohibited, SECP issues draft amendment to Shariah regulations

    Raising loans on interest prohibited, SECP issues draft amendment to Shariah regulations

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Thursday issued draft amendments to Shariah Governance Regulations, 2018 saying that raising loans on interest is prohibited.

    In regulation 11, the SECP proposed following amendments:

    “(ii) the collective amount raised as loan on interest whether long-term or short-term debt does not exceed thirty percent of the market capitalization or total assets of the company, knowingly that raising loans on interest is prohibited whatsoever the amount is;

    “(iii) the total amount of interest-bearing deposits and Shariah non-compliant investments, whether short-, medium- or long-term, shall not exceed thirty percent of the market capitalization of total equity or total assets of company knowingly that interest taking deposits and investments are prohibited whatsoever the collective amount is”;

    The SECP further proposed amendment:

    “Provided that the prevailing Shariah screening criteria of the Exchange for all shares Islamic index may be used only for the companies on the all shares Islamic index, and shall be replaced with the above criteria by 30th June 2020.”

    For disposal of Shariah non-compliant investments, the SECP proposed:

    “Shariah compliant companies shall divest the Shariah non-compliant investments above thirty per cent threshold within a period of one year or when the market value of the investment equals the cost of investment, whichever is earlier:

    “Provided that the Commission may, for reasons to be recorded in writing and subject to such conditions or restriction as it may deem fit to impose on recommendation of the Shariah Advisory Board, relax any of the requirements of this regulation in case of any difficulty arises in giving effect to any of the requirements of this regulation in a particular case, or class of cases.”

    In regulation 3, it is proposed:

    “Provided that the companies on PSX All Shares Islamic index shall be deemed to be Shariah compliant till December 31, 2019:

    “Provided further that for purpose of availing tax rebate, the Shariah compliant companies referred in the first proviso shall meet the criteria as prescribed in Income Tax Ordinance, 2001.”

  • CNIC condition not applicable on purchases below Rs50,000

    CNIC condition not applicable on purchases below Rs50,000

    KARACHI: The condition of providing CNIC details is not applicable on purchases up to Rs50,000 by a person, said Zeeshan Merchant, former vice president of Karachi Tax Bar Association (KTBA).

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  • SBP issues procedure for loans under PM’s Kamyab Jawan SME Lending Program

    SBP issues procedure for loans under PM’s Kamyab Jawan SME Lending Program

    KARACHI: The State Bank of Pakistan (SBP) on Thursday announced the official procedure for obtaining a loan under the Prime Minister’s Kamyab Jawan SME Lending Program, a flagship initiative aimed at empowering youth and small enterprises across the country.

    (more…)
  • Gold rate hits all time high at Rs82,000

    Gold rate hits all time high at Rs82,000

    KARACHI: The price of gold has reached to all time high at Rs82,000 per Tola in the local market, traders said on Thursday.

    The traders said that the price of one tola gold increased by Rs1700 to reach all time high of Rs82,000. One toal is measured at 1 kilogram is equal to 80 tola.

    The price of gold for 10 grams also increased by Rs1458 to reach at Rs70,302, according to Sarafa Bazar Karachi.

    The traders attributed the hike in price to increase in international price of bullion. In international market the gold increased by $24 to reach at $1420 per ounce.

    The traders said that in the local market people were investing in the gold due to strict monitoring of foreign currency and dull activity in stock market.

  • FBR meeting on July 12 to speed up action against Benami properties

    FBR meeting on July 12 to speed up action against Benami properties

    ISLAMABAD: In order to speed up action against Benami properties an important meeting is scheduled for July 12 (Friday) at Headquarter of Federal Board of Revenue (FBR).

    The meeting will presided over by Syed Shabbar Zaidi, Chairman, FBR and all the relevant officers of Benami Zones will attend the meeting.

    An office order circulated to the three Benami Zones, said that the phenomenon of Benami property was one of the major socio-economic malaise afflicting the national development, equitable distribution of resources and overall governance in the country.

    “In order to combat this menace the federal government has recently activated specialized Benami Zones at Karachi, Lahore and Islamabad, constituted various enforcement and adjudication authorities and promulgated rules for effective implementation of the Benami Property (Prohibition) Act, 2017.”

    The office order further said that to have initial introduction and orientation, develop understanding of the legal framework, appreciate roles and responsibilities and share knowledge on the subject for impartial, judicious and expeditious implementation of the Benami Transactions (Prohibition) Act, 2017 a meeting of all stakeholders had been scheduled on Friday July 12, 2019 at FBR HQs Islamabad.

    The officers, who will attend the meeting included: Commissioners Inland Revenue as approving authority of the three Benami Zones.

    Deputy Commissioners as initiating officers and Assistant Commissioners as administrators under Benami laws will also attend the meeting.