PSX’s net profit falls by 10.6pc on elimination of tax on bonus shares

KARACHI: The earning of Pakistan Stock Exchange (PSX) during first nine months of current fiscal year fell by 10.6 percent due to elimination of tax on bonus shares, which results no dividend received by the capital market.

The stock market on Friday released its financial report and said that its earnings were Rs59 million during July-March 2019 as compared with Rs66 million in the corresponding period of the last fiscal year.

The PSX said that foreign investors had been balancing their portfolios since the net buy position for the third quarter 2019 stood at over $31.3 million. “This indicates their optimism about the long term prospects of Pakistan’s equity market,” it said.

“However, during the nine months period ended March 31, 2019, the foreign investors off-loaded securities worth $373 million which was absorbed by the local investors,” it added.

During the period, the Finance Supplementary (Second Amendment) Act, 2019 was enacted in March 2019 and some notable features favorable to the capital market include abolishment of the advance tax at 0.02 percent on purchase and sale value of shares traded in lieu of tax on commission applicable to members of the stock exchange, loss on disposal of securities would be allowed to carry forward to the next year and subsequent two tax years, to be offset against capital gain earned in those years and effective July 01, 2019, for companies availing group relief, tax on inter-corporate dividend has been reduced to the extent of percentage of shareholding the recipient of dividend has in the distributing company.

PSX recorded a pre-tax profit of Rs64 million for the nine-month period ended March 31, 2019 against Rs122 million for the corresponding period of the last fiscal year, posting 48 percent decline.

During the year, PSX implemented revised fee structure for the annual listing fee. This structure resulted increase in revenue by Rs113 million during first nine months of current fiscal year.

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