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Category: Stock & Commodity

  • Citi Pharma’s IPO book building starts June 15

    Citi Pharma’s IPO book building starts June 15

    KARACHI: Citi Pharma IPO’s book building phase is scheduled to held on June 15 and 16, 2021 where high net worth individuals and institutional investors will subscribe to 75 per centof the issue size (54.5 million shares), according to a statement issued on Monday.

    The book building will start at the floor price of Rs28 per share, including premium of Rs18 per share. Based on the interest from investors during the book building process, the strike price can rise by 40 per cent (Rs39.20 a share), thus helping the company collect Rs2.8 billion.

    After the book building process, successful bidders will be provisionally allotted 75 per cent of the issue size (54.5 million shares). The remaining 25 per cent (18.1 million shares) will then be offered to retail investors at the strike price. Citi Pharma aims to raise up to Rs2.8 billion by offering a 35 percent stake to institutional and ordinary investors.

    Citi Pharma is one of the largest active pharmaceutical ingredients (API) manufacturers in Pakistan and also makes formulations products. In particular, Citi Pharma sells paracetamol, an API used in painkillers, to GlaxoSmithKline that mixes it with other chemical salts and sells under the renowned brand of Panadol.

    Citi Pharma is raising new funds primarily to expand its existing capacity of 3,600 tonnes per annum of paracetamol to 6,000 tonnes per annum. The demand for paracetamol has surged in the wake of Covid-19. In addition, company plans to add new APIs as well as pharmaceutical formulations (final products) to its existing product line.

  • Stock market gains 421 points on positive budget sentiments

    Stock market gains 421 points on positive budget sentiments

    KARACHI: The stock market gained 421 points on Monday as positive sentiments prevailed on budget announcement. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 48,726 points as against last Friday’s closing of 48,305 points, showing an increase of 421 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note following the Budget announcement on Friday evening.

    Dividend anticipation from SOEs (State Owned Enterprises) helped OGDC propel to hit upper circuit (with a hefty dividend payout expectation), followed by positive price performance of PPL.

    Similarly, positive measures for Footwear, Tyre, Refinery, Steel and Cement sectors supported the listed scrips in these sectors to perform positive during the session.

    Market hit a high of 677 points after the pre-opening session, after which profit booking brought the index down by roundabout 400 points, however, buying momentum continued which enabled Index to close +421 points.

    Among scrips, BYCO led the table with 108.4 million shares, followed by HUMNL (108.1 million) and WTL (98 million).

    Sectors contributing to the performance include E&P (+202 points), Cement (+92 points), Engineering (+52 points), Banks (+42 points), O&GMCs (+32 points).

    Volumes increased from 1024 million shares to 1217.8 million shares (+19 percent DoD). Average traded value also increased by 72 percent to reach US$ 275.1 million as against US$ 159.8 million.

    Stocks that contributed significantly to the volumes include BYCO, HUMNL, WTL, ASL and AGL, which formed 32 percent of total volumes.

    Stocks that contributed positively to the index include OGDC (+106 points), PPL (+68 points), SYS (+44 points), INIL (+27 points) and POL (+25 points). Stocks that contributed negatively include TRG (-61 points), FFC (-27 points), UNITY (-17 points), FFBL (-13 points) and NRL (-10 points).

  • Stock market gains 474 points on positive economic indicators

    Stock market gains 474 points on positive economic indicators

    The Pakistani stock market saw a significant surge on Thursday, gaining 474 points after positive comments from the Finance Minister during the disclosure of the Economic Survey of Pakistan for the outgoing fiscal year.

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  • SECP proposes exemption of additional CGT on foreign investors

    SECP proposes exemption of additional CGT on foreign investors

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has recommended exemption of additional capital gain tax (CGT) on disposal of shares in case of foreign investors, who are not on the Active Taxpayers List (ATL).

    The SECP submitted tax proposals for budget 2021/2022 to the Federal Board of Revenue (FBR).

    The SECP submitted following proposal in case of CGT:

    Exempt foreign investors from applicability of 100 percent additional tax in case their name is not appearing in Active Taxpayers List (ATL) in the Tenth Schedule

    Core objectives

    Presently, 44 percent of total foreigners investing through PSX are currently not appearing in ATL list as a result of which they are subject to Capital Gain Tax (CGT) @ 30 percent.

    For such investors who do not have any other source of income in Pakistan except capital gains, should not be subject to additional 100 percent tax for not being in the ATL

    Align it simplified tax regime for Roshan Digital Account (RDA) holders, wherein tax rate applicable for persons appearing on ATL will be charged to RDA holders

    Foreigners may be subject to taxation in their home country being resident tax payer therefore, a balanced taxation of their income in Pakistan is essential

    Benefit to Economy

    The rationale taxation of foreigner’s income from investment will result in inflow of foreign exchange, boosting foreign exchange reserves of the country.

    Broaden investor base of capital markets and more liquidity to capital markets by luring foreign investors.

    Impact on Tax Revenue

    Foreigners represents approximately 5 percent of overall capital market investors trading and removing additional tax will not materially impact tax revenue.

    Fresh investments will result in further tax revenue, in case tax incentives are provided.

    Comparable regional practices relating to taxability

    A brief overview of CGT practices adopted in other regions is provided below:

    CountryRate of CGT
    Bangladesh15 percent
    India10 percent – Long term 15 percent – Short term
    MalaysiaNil
    KyrgyzstanCGT are subject to ordinary income tax rate at 10 percent
    Nigeria10 percent
    MauritiusCorporate: 15 percent if holding period is less than 6 months Individual: 10 percent if income is less than MUR 650,000 & 15 percent if income is more than MUR 650,000
    OmanNil
    UAENil
    SingaporeNil
  • KSE-100 index slides by 370 points on profit taking

    KSE-100 index slides by 370 points on profit taking

    KARACHI: The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) fell by 370 points on Wednesday as profit taking was witnessed during the day.

    The index closed at 47,778 points from previous day’s closing of 48,148 points, showing a decline of 370 points,

    Analysts at Topline Securities said that the equities closed negative.  After a slight positive opening profit taking has been witnessed at the bourse as Pakistan’s trade deficit widened by 20 percent to US$3.6 billion in May 2021 compared to US$3.0 billion in April 2021.  

    E&Ps sector closed down 0.70 percent despite higher international oil prices. KAPCO down by 3.98 percent after announcing DPS of Rs5/share – lower than street expectation. Similarly TRG dented the KSE100 Index by 48 points.

    Total traded volume and value for the day stood at 1,355 million shares and Rs23.18 billion, respectively. The volume leader for today’s session was WTL with 716.81 million shares exchanging hands.

  • SECP suggests measures to document real estate sector

    SECP suggests measures to document real estate sector

    ISLAMABAD: Securities and Exchange Commission (SECP) has submitted its tax proposals for budget 2021/2022 for documenting real estate sector and promotion of Real Estate Investment Trusts (REITs).

    The SECP submitted following suggestions for documenting real estate sector and promotion of REITs:

    (i) Reduce tax on dividend from REITs from 25 percent to 15 percent to synchronize it with mutual funds [First schedule, Part-1, Division-III, paragraph B] of Income Tax Ordinance, 2001.

    (ii) Exempt advance tax on property transfers to/from a REIT Scheme u/s 236C and 236K of Income Tax Ordinance, 2001.

    (iii) Exemption for CGT provided in clause 99A, Part 1, 2nd schedule be applied to all categories of REITs (mix-use projects) without any sun-set clause

    (a) Core objective of the proposals:

    • To support government vision for development of housing sector and allied industries

    • To promote regulated real-estate sector for promoting documentation and transparency

    • To introduce level playing field for regulated sectors

    • To remove disadvantage/dis-incentive caused to the REIT sector (Presently 1 licensed REITs, 4 REITs in pipeline and 9 RMCs registered)

    • To increase overall tax revenue for FBR and provincial revenue authorities

    (b) Direct and indirect impact on tax revenue (impact will be positive)

    • Direct tax revenue for FBR increases; example – Tax revenue of Dolmen City REIT is highest tax being paid compared to any other Mall bigger or of same size. In addition, corporate tax from RMC;

    • Encourages sector to grow thereby, fostering economic activity through allied industries resulting in higher tax collection;

    • Transfer of properties to the REIT structure will also induce proportional tax collection of provincial/local revenue departments;

    (c) Benefit for national economy

    • Promoting economic activity through regulated, documented and transparent models and moving towards formal economy

    • Level playing field for different investment avenues (collective pooled investments through REIT Fund)

    • Investor participation in real estate sector with protection of interests under the REIT law vis-a-vis, falling prey to unregulated real estate sector mushrooming in the market

    • Increase in revenue for the federal and local governments;

    • Disclosure and taxation of property transactions at market value instead of DC rates

    • Job creation related to construction, real estate and allied industries;

    • Broaden the investor base and size of capital markets;

    • Due to mandatory listing, small savers can share profits arising from real estate industry (which currently not available) – tax revenue from trading at stock exchange + CGT.

  • Stock market sheds 155 points on selling pressure

    Stock market sheds 155 points on selling pressure

    KARACHI: The stock market witnessed a decline of 155 points on Tuesday mainly on selling pressure during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 48,148 points as against previous day’s closing of 48,303 points, showing a decline of 155 points.

    Analysts at Arif Habib Limited said that the market slumped today while bearing selling pressure that began yesterday.

    Increase in cement price / bag helped Cement stocks trade in green, whereas KAPCO saw price moving up on the notification of board meeting to consider interim dividend.

    On the other hand, TRG contributed to downside in Index due to concerns over minimum global tax as envisaged by EU and US. Among scrips, WTL topped the volumes with 400 million shares, followed by BYCO (37.8 million) and HUMNL (35.1 million).

    Sectors contributing to the performance include Technology (-72 points), O&GMCs (-41 points), Textile (-29 points), E&P (-19 points) and Refinery (-13 points).

    Volumes increased from 936.1 million shares to 1,040.5 million shares (+11 percent DoD). Average traded value however declined by 14 percent to reach US$ 153.4 million as against US$ 177.7 million.

    Stocks that contributed significantly to the volumes include WTL, BYCO, HUMNL, TPLP and PTC, which formed 52 percent of total volumes.

    Stocks that contributed positively to the index include KAPCO (+29 points), HBL (+14 points), MCB (+12 points), DAWH (+12 points) and BAHL (+8 points). Stocks that contributed negatively include TRG (-74 points), PSO (-24 points), OGDC (-14 points), SNGP (-13 points) and KTML (-8 points).

  • Introduction of new tax regime under consideration: Tarin

    Introduction of new tax regime under consideration: Tarin

    ISLAMABAD: Finance Minister Shaukat Tarin on Monday said that the government is considering to introduce a new tax regime that is in accordance with the changing economic environment.

    The finance minister said this at a meeting with Managing Director / CEO Pakistan Stock Exchange Farrukh H. Khan to review proposals for Federal Budget 2021-2022.

    The Federal Minister for Finance and Revenue, Shaukat Tarin, chaired the meeting here at the Finance Division with Adviser to PM on Austerity and Institutional Reforms Dr. Ishrat Hussain, SAPM on Finance and Revenue Dr. Waqar Masood, Chairman FBR and Secretary Finance Division were also present during the meeting.

    MD, Pakistan Stock Exchange (PSX) gave a detailed presentation on the huge impact of stock markets on wealth creation and mobilization of capital.

    He said that a broad-based capital market helps to achieve important economic and social objectives like increasing the number of tax payers, optimizing savings and investment rates, and reducing wealth inequalities.

    Tax measures are an important policy tool to increase investments and savings in the economy and to stay competitive with other markets.

    The Managing Director submitted proposals to align rates of capital gain tax on disposal of securities in line with regional practices, rationalization of tax rates for companies listed on the stock exchange, enhanced tax credit for listed small and medium enterprises, unlocking the potential of private funds and many other suggestions that will help broadening the tax base/ revenue collection.

    The finance minister appreciated the recommendations from the MD Stock Exchange and said that the present government is strongly committed to strengthening of the financial markets and is ready to adopt measures that could mobilize capital to more productive sectors.

    Shaukat Tarin welcomed the proposals and assured that these will be given due consideration in the upcoming budget.

  • Stock market gains 91 points amid selling pressure

    Stock market gains 91 points amid selling pressure

    KARACHI: The stock market witnessed a gain of 91 points on Monday amid heavy selling despite positive news flows related to budgetary measures.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 48,303 points as against last Friday’s closing of 48,212 points, showing an increase of 91 points.

    Analysts at Arif Habib Limited said that the market saw heavy selling pressure today against all the positive news flow that came to fruition over the weekend, from possible reduction in CGT to duty reduction for Auto manufacturers and release of circular debt related payments to IPPs.

    Reportedly, ISL increased steel prices today which helped the stock price gain during the session, however profit booking brought the price below LDCP by the closing. E&P, Refinery, O&GMCs, Technology stocks bore selling pressure.

    KAPCO, which was the main beneficiary of release of circular debt related funds from the Government, could not stand firmly and selling pressure brought its price below LDCP briefly. Among scrips, HUMNL topped the volumes with 118 million shares, followed by WTL (80.5 million) and PTC (64.6 million).

    Sectors contributing to the performance include Glass (+22 points), Fertilizer (+19 points), Textile (+18 points), Power (+14 points) and Cement (+12 points).

    Volumes increased from 867.3 million shares to 936 million shares (+7 percent DoD). Average traded value also increased by 4 percent to reach US$ 178.3 million as against US$ 171.9 million.

    Stocks that contributed significantly to the volumes include HUMNL, WTL, PTC, BYCO and TELE, which formed 37 percent of total volumes.

    Stocks that contributed positively to the index include SYS (+27 points), GHGL (+22 points), KTML (+19 points), HUBC (+12 points) and PTC (+11 points). Stocks that contributed negatively include TRG (-25 points), PSO (-12 points), PPL (-10 points), NML (-9 points) and HBL (-9 points).

  • Weekly Review: stock market to remain positive on budget incentive expectations

    Weekly Review: stock market to remain positive on budget incentive expectations

    KARACHI: The stock market will likely remain positive during the next week with a view of a positive budget for the market, analysts said.

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