Business | Markets

Pakistan stocks surge on news of tax break

Pakistani shares surged yesterday to end nearly five per cent higher after a decision to extend an exemption on capital gains tax, including on share trading, in the budget to be announced next week.

  • Reuters
  • Published: 00:08 June 5, 2008
  • Gulf News

Karachi: Pakistani shares surged yesterday to end nearly five per cent higher after a decision to extend an exemption on capital gains tax, including on share trading, in the budget to be announced next week.

The Karachi Stock Exchange (KSE) benchmark 100-share index rose 4.89 per cent, or 610.03 points, to 13,089.50. Volume was 97.34 million shares and gainers beat losers 356 to 38. The free-float KSE-30 index gained 4.94 per cent to 15,361.89.

"The announcement that there will be no capital gains tax and the current tax regime will not be changed gave the market the shot in the arm it had been looking for," said Asad Iqbal, managing director at Esmail Iqbal Securities Ltd.

Capital gains tax is charged on profits made on the sale of non-inventory assets.

The KSE said the tax exemption would be extended for two years, until June 30, 2010, and the current tax regime for capital markets would remain unchanged in the budget for the 2008-09 fiscal year (July-June), to be announced on June 10.

"This is what we believe is a far-sighted decision," said Adnan Afridi, managing director of the Karachi Stock Exchange.

Impact

"A healthy capital market has a very direct impact on overall macro-economic stability."

A KSE delegation met the finance minister and top economic officials on Tuesday to discuss capital market policy.

Among the most active companies, volume leader TRG Pakistan rose 14.2 per cent to Rs8, Oil and Gas Development Co Ltd gained five per cent to Rs130.72 and NIB Bank ended eight per cent higher at Rs13.57.

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