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Tag: Pakistan Stock Exchange

  • PSX proposes scheme for attracting investment from black economy

    PSX proposes scheme for attracting investment from black economy

    KARACHI: Pakistan Stock Exchange (PSX) has advised the government to introduce a scheme for attracting investment from large black economy.

    In its budget proposals for fiscal year 2019/2020 the stock exchange advised the government to introduce a mechanism and regulatory structure for the launch of registered savings and investment accounts (RSIA) to help channel savings towards productive investments.

    “RSIAs will help capital from the large undocumented sector into the formal economy. Further. It is also crucial firm guarantees be offered that contributions be subject to full amnesty – aside from Anti-Money Laundering and Terrorist Financing issues diligence.”

    Giving rationale to its proposal, the PSX said that where they have been introduced, registered savings and investment accounts have been very successful in channeling saving to productive investments through capital markets and often constituents the main source of income in retirement.

    In Pakistan, they will bring the added benefit of driving the government’s goal to document the informal sector.

    RSIAs could become one of the driving forces in the transformation of Pakistan’s economy. By some estimates, 40 million middle-class Pakistanis have an average accumulated wealth of $10,000 for a total over Rs50 trillion.

    “Much of that wealth is currently investment in real estate, gold and other asset classes in Pakistan and offshore. If RSIAs can capture 10 percent of that wealth, it would be equivalent to more than half the current market capitalization of PSX listed companies or more than the outstanding amount of PIBs and Sukuks.

    The stock market proposed the new scheme to be introduced in the Income Tax Ordinance, 2001.

    The PSX recommended that initially there should be no limit to the amount an investor can contribute to a RSIA. “In this way, the government would maximize the benefits of RSIAs described above, including tax revenue upon withdrawal. Furthermore, unlike VPSs, no tax credit should be given with regard to contributed amounts.”

    It is further recommended that all income within the account such as capital gains and dividends should be tax free, like VPSs. It is this feature and the opportunity to legally invest in capital market instruments that will attract capital from the informal sector.

    “Investment should be limited to listed equities, ETFs, tradable bonds and mutual funds. Principle-based prudential rules must be adopted to ensure protection of client assets and suitability of investments.”

    The PSX said that withdrawals should be treated a taxable income because contributions are presumed to have been made from sources that have not been taxed.

    “Unlike VPSs, investors should be allowed to withdraw capital from the account any time they want. That feature is key in attracting capital from wealthy individuals who may otherwise not want to lock up their capital.”

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

    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.

  • PSX recommends CGT exemption to foreign investors

    PSX recommends CGT exemption to foreign investors

    KARACHI: Pakistan Stock Exchange (PSX) has proposed to exempt capital gain tax (CGT) on disposal of securities by foreign investors.

    The PSX in its proposals for budget 2019/2020 on Thursday, recommended the exemption of CGT on disposal of securities by foreign investors.

    Giving rationale to its proposals, the PSX said that the exemption of CGT on foreign investors would facilitate substantial capital inflow by relaxing the cumbersome and time consuming account opening and registration process for foreigners as they get discouraged and overwhelmed with the current registration structure and look for better investment alternatives in regional markets.

    It further said that Pakistan has taxation treaties with a number of countries thus foreigners would be liable to pay taxes according to the treaty. “Therefore, taxing foreigners would burden them and not only increase their cost of business but most importantly discourage them from investment in Pakistan’s capital market.”

    It is proposed that the proviso to sub – rule 2 of Rule 13N of Income Tax Rules, 2002 shall be omitted.

    The PSX said that it is observed that most countries do not impose capital gains tax on disposal of securities by foreigners.

    Bangladesh, Malaysia, and many other countries do not levy CGT on transactions of disposal of securities conducted by foreigners.

    Even in countries that do have CGT on foreign investors, the rules are distinctly different from those that apply to domestic investors, in order to provide an attractive tax environment and avoid double taxation.

    One important reason for not imposing such tax is that most of the countries have double taxation treaties.

    In Pakistan, foreign investors file income tax returns regularly and pay taxes in accordance with the provisions of the Income Tax Ordinance, 2001 or reduced rates provided under treaties executed with such countries.

    Foreign investors should be given preferential tax rates as they might still be required to pay taxes in their home country where they are considered as a resident taxpayer.

    The PSX also urged the tax authorities to review the mechanism for payment of CGT on disposal of securities for domestic investors.

    It said that at present National Clearing Company of Pakistan Limited (NCCPL) calculates and collects Withholding Tax on Capital Gains made on disposal of shares listed on Pakistan Stock Exchange Limited.

    However, it is witnessed that in many countries there is no capital gain tax collected by any institution but rather individuals/ corporate are required to file their tax returns and pay taxes if any on the capital gains made by trading of shares.

    A broad range of countries including Canada, USA, Indonesia, India, and Vietnam do not mandate the collection of CGT by any intermediary at the time of disposal of securities, and the CGT is payable at the time of filling of returns.

    In Singapore, Hong Kong, Malaysia and Mauritius there is no capital gains tax.

    Therefore, considering international perspective, it would be appropriate if in Pakistan, payment of capital gains tax be made obligatory on individuals and corporates and the status of NCCPL should be such that only the information is provided to the tax authorities by NCCPL.

    In line with the common practice internationally, the government should review and revise the mechanism for payment of tax on capital gains for filers.

    An alternative to the current convention should be explored along with pros and cons. Withholding tax at NCCPL level for filers should be debated thoroughly and replaced with the obligation on investors who are filer to pay CGT through annual tax returns.

    However, the current mechanism of withholding on CGT for investors who are non-filers shall remain the same provided no WHT on such non-filers whose Capital Gains is up to Rs100,000 per annum.

    In any case, NCCPL should provide information on all investors’ capital gains and losses to tax authorities for tracking purposes.

    In line with international practice for collection of capital gains tax, an obligation to file returns and pay taxes on disposal of securities at year end would encourage a widespread tax culture among investors.

    It is proposed that section 100B, 8th Schedule to the Income Tax Ordinance 2001 and Rule 13N of Income Tax Rules, 2002 shall be amended accordingly.

  • Stock market gains 292 points in volatile trading

    Stock market gains 292 points in volatile trading

    KARACHI: The stock market gained 292 points on Thursday amid highly volatile trading sessions.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,796 points from previous day’s closing of 36,504 points with gain of 292 points.

    Analyst at Next Capital Limited said that the decline in international oil prices after the US Energy Information Administration (EIA) reported a much bigger than expected rise in commercial crude inventories kept the oil stocks under pressure throughout the day.

    Pakistan Petroleum Limited recorded (-0.43 percent) and Pakistan Oil Fields (-0.86 percent).

    Market participation for the 100 index decreased to 84.2 million from 93.1 million in the previous session.

    Major contribution to total market volume came from BOP, WTL, and LOTCHEM churning 25.1 million shares out of the total market all share volume of 106.8 million shares.

    Analysts at Topline Securities said that following fall of around 5.5 percent in month of April (till 24th), index slightly recovered 0.8 percent as amnesty scheme is likely to be presented in front of cabinet next week.

    Further, likely meeting of Prime Minister Imran with IMF chief in China and expected arrival of IMF mission from Apr 27-30, 2019 also restored investors confidence in getting bailout package.

  • Trading restores at PSX after technical fault

    Trading restores at PSX after technical fault

    The Pakistan Stock Exchange (PSX) experienced a temporary suspension in trading on April 25, 2019, lasting for over an hour due to a technical fault.

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  • Stock market ends in green on banks earning

    Stock market ends in green on banks earning

    KARACHI: The stock market ended in green mainly on positive earning declared by banks on Wednesday.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,504 points as against 36,404 points showing an increase of 100 points.

    Analysts at Arif Habib Limited said that the market went green today and went up by 329 points.

    The positive drive was mainly attributed to positive earnings posted by Banks (HBL, UBL, MCB) as well as DGKC that showed promising results as against market expectation.

    Post result announcement, all the pertinent stocks gained in terms of price and volume, however, due to prevailing weak sentiment, profit booking ensued as well that largely eroded almost all the gains in Cement sector scrips.

    Cement sector garnered 23 million shares, which is the highest among other sectors, followed by Banks (18 million) and Chemical (15 million). LOTCHEM has consecutively been performing on the bourse after a long time and again topped the volumes table with 9.8 million shares, followed by BOP that also showed price improvement over yesterday.

    Sectors contributing to the performance include Banks (+77 points), Power (+35 points), E&P (+27 points), Food (+15 points), Pharma (-36 points), Tobacco (-10 points).

    Volumes dipped further to reach 116 million shares as against 120 million shares (-3 percent DoD). Average traded value also declined by 8 percent to reach US$ 32.5 millionas against US$ 35.4 million.

    Stocks that contributed significantly to the volumes include LOTCHEM, BOP, TRG, PIOC and MLCF, which formed 36 percent of total volumes.

    Stocks that contributed positively include UBL (+42 points), HUBC (+37 points), NESTLE (+20 points), OGDC (+16 points), and HMB (+14 points). Stocks that contributed negatively include ABOT (-12 points), NBP (-11 points), FFBL (-11 points), PMPK (-10 points) and SEARL (-9 points).

  • Equity market extends losses on concerns over budgetary measures

    Equity market extends losses on concerns over budgetary measures

    KARACHI: The equity market extended previous day’s losses on Tuesday owing to concerns over new budgetary measures under planned IMF program.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,404 points as against 36,902 points showing a decline of 498 points.

    Analysts at Arif Habib Limited said that the index saw a significant draw down of 765 points.

    Issues contributing to the negative sentiment included a key meeting among Cement manufacturers to discuss the market share and possibly redefine the same in north and south regions.

    Besides, recent resignation of FM and joining of the Advisor to Finance Ministry caused concern among investors for deferral in finalization of IMF.

    In addition, future contract in the on-going rollover week attracted selling interest from investors. Cement Sector led the volumes with 19 million shares, followed by Chemical (15 million).

    LOTCHEM managed to move upward though the price gains were contained. SNGP after showing phenomenal results, announced yesterday, saw lower circuit by session’s end.

    Sectors contributing to the performance include Fertilizer (-66 points), Banks (-66 points), Cement (-58 points), E&P (-58 points), O&GMCs (-51 points).

    Volumes continued declining trend and reached 120 million shares from 126 million shares (-5 percent DoD). Average traded value increased by 13 percent to reach US$ 35.4 million from US$ 31.3 million.

    Stocks that contributed significantly to the volumes include LOTCHEM, KEL, SNGP, BOP and PIOC, which formed 35 percent of total volumes.

    Stocks that contributed positively include MCB (+4 points), MUREB (+3 points), UBL (+2 points), FATIMA (+2 points), and MEBL (+2 points). Stocks that contributed negatively include HBL (-33 points), DAWH (-30 points), ENGRO (-23 points), OGDC (-23 points).

  • Stock market down 391 points on selling pressure

    Stock market down 391 points on selling pressure

    KARACHI: The stock market lost 391 points to start the week on Monday with selling pressure witnessed during the trading.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,902 points as against 37,292 points showing a decline of 391 points.

    Analysts at Arif Habib Limited said that profit booking was apparently the only idea on investors’ mind.

    SNGP, which hit upper circuit the other day with high volume was scheduled to announce financial results today.

    Although SNGP beat street consensus and did hit upper circuit today, it couldn’t sustain selling pressure and price went below last trading day’s closing price.

    LOTCHEM retained investors’ interest and despite trading below upper circuit several times, it managed to close at upper circuit.

    Overall, the index lost 453 points during the session besides marking +187 points in the beginning.

    Cement sector led the volumes with 24 million shares, followed by Chemical (21.8 million) and Banks (12.5 million). Among scrips, LOTCHEM topped the chart with 19.7 million shares, followed by PIOC (10.6 million).

    Sectors contributing to the performance include Banks (-118 points), E&P (-40 points), Fertilizer (-37 points), Cement (-29 points), Power (-27 points).

    Volumes declined considerably from 177.4 million shares to 125.9 million shares (-29 percent DoD). Average traded value also declined by 33 percent to reach US$ 31.3 million as against US$ 46.9 million.

    Stocks that contributed significantly to the volumes include LOTCHEM, PIOC, KEL, SNGP and PAEL, which formed 45 percent of total volumes.

    Stocks that contributed positively include LOTCHEM (+8 points), INDU (+2 points), DCR (+2 points), ICI (+2 points), and PKGS (+2 points). Stocks that contributed negatively include HBL (-56 points), PPL (-22 points), MCB (-20 points), LUCK (-18 points) and FFC (-17 points).

  • PSO declares 55 percent decline in net profit for nine-month period

    PSO declares 55 percent decline in net profit for nine-month period

    KARACHI: The net profit of Pakistan State Oil (PSO) has declined substantially by 55 percent to Rs5.92 billion for the period July – March 2018/2019 as compared with Rs13.22 billion in the corresponding period of the last fiscal year.

    According to financial results submitted to Pakistan Stock Exchange (PSX) on Monday for nine-month period ended March 31, the earning per share of the company also fell to Rs15.15 as compared Rs33.80 in the same period of the last year.

    The gross sales of the company was flat at Rs950.93 billion during July – March 2018/2019 as compared with Rs930.38 billion in the same period of the last fiscal year.

    The gross profit of PSO reduced to Rs23.88 billion for the nine-month period ended March 31, 2019 as compared with Rs28.87 billion in the same period of the last fiscal year.

    The profit of the company for the quarter January – March 2019 also fell to Rs1.67 billion as against Rs4.70 billion, posting 64 percent decline.

    Analysts at Topline Securities said that the company recorded loss of around Rs2.3 billion on petrol, while, gain of around Rs2 billion and Rs95 million on Furnace Oil (FO) and HSD respectively.

    Further, volumetric decline of 6 percent YoY in HSD/Petrol and 31 percent YoY decline FO sales also weighed on overall gross profits of the company.

  • Ghandhara Nissan declares 44 percent decline in net profit for nine-month period

    Ghandhara Nissan declares 44 percent decline in net profit for nine-month period

    KARACHI: Ghandhara Nissan Limited, the assembler of light commercial and heavy vehicles in Pakistan, has posted significant decline in net profit by 44 percent for nine-month period ended March 31, 2019.

    The company submitted its finance results for July – March 2018/2019 to Pakistan Stock Exchange (PSX) on Monday.

    The company declared Rs135.92 million profit after tax for the period as compared with Rs242.85 million for the corresponding period of the last fiscal year.

    The earnings per share also fell to Rs2.38 for the period under review as compared with Rs4.91 in the same quarter of the last fiscal year.

    The revenue off the company was stagnant at Rs1.7 billion for the first nine months of the current fiscal year as compared with Rs1.74 billion in the same period of the last fiscal year.

    After excluding the cost of sales the gross profit of the company was at Rs300.89 million as against Rs358.95 million in last year.

    The profit before taxation of the company stood at Rs178.84 million for the nine-month period ended March 31, 2019 as compared with Rs316.82 million in the same period of the last fiscal year.

    The profit after tax for the third quarter (January – March) 2019 was sharply declined by 85 percent to Rs6.87 million as compared with Rs45.8 million declared for the same quarter of the last year.