KSE-100 gains 3,410.73 points or 4.69% in post -budget rally \u2014 highest-ever single-day gain
\n Karachi
\nFiring on all its rockets, the stock market on Thursday blasted off to hit unscaled highs as investors cheered the Capital Gains Tax (CGT) status quo in the federal budget 2024-25, traders said.
\nPakistan Stock Exchange\u2019s (PSX) benchmark, the KSE-100 Shares Index reached an all-time high of 76,208.16 points, showing an unprecedented giant leap of 3,410.73 points or 4.69% \u2014 the highest-ever single-day gain.
\n\u201cThe market was expecting an increase in capital gains tax and so investors had reduced exposure significantly,\u201d Adnan Sheikh, assistant vice president of Pak Kuwait Investment Co told Reuters.
\nAfter the budget and Monday\u2019s cut of 150 bps in the central bank\u2019s policy rate, the market could see a record day as \u201cequities are the best option for the medium term\u201d, Sheikh added.
\nApart from the capital gains tax, analysts say the budget and other revenue measures are in line with expectations.
\nThe rally set all the top sectors on fire, triggering widespread buying interest in automobile assemblers, cement, commercial banks, engineering, oil and gas marketing companies (OMCs), and refineries.
\nThis euphoria gripped the market a day after Finance Minister Senator Muhammad Aurangzeb unveiled Pakistan\u2019s federal budget for 2024-25, which aims to boost tax revenue of Rs13 trillion for the year starting July 1, up nearly 40% from the current year.
\nThe budget aims for a modest 3.6% growth, a move seen as a delicate balancing act to satisfy the International Monetary Fund (IMF) while addressing the nation\u2019s fiscal challenges with heightened taxation.
\nIt\u2019s been designed to strengthen the case for a new bailout deal from the IMF, as Pakistan seeks an estimated loan ranging from $6 billion to $8 billion, to avert default in an economy growing at the region\u2019s slowest pace.
\n\u201cWe believe this budget will serve as prior action for a new IMF programme,\u201d Topline Securities said in a note.
\nIf parliament passed the budget in compliance with IMF measures, Topline said it expected a forward price-to-earnings ratio of 6.93 in three years, a historic high, from 3.4 now.
\nPakistan\u2019s international sovereign bonds also rallied with longer-dated maturities enjoying the largest gains.
\nThe 2036 bond added 1.4 cents\u2013its biggest gain in more than two months\u2013to be bid at just over 77 cents in the dollar, Tradeweb data showed.
\nDefending the decision to boost tax revenue, Finance Minister Muhammad Aurangzeb said the present tax-to-GDP ratio of a little under 10% was not sustainable. Key objectives for the upcoming fiscal year include efforts to increase the ratio gradually to 13% in the next three years, Aurangzeb told a press conference after presenting the budget in parliament.<\/p>\n","protected":false},"excerpt":{"rendered":"
KSE-100 gains 3,410.73 points or 4.69% in post -budget rally \u2014 highest-ever single-day gain Karachi Firing on all its rockets, the stock market on Thursday blasted off to hit unscaled highs as investors cheered the Capital Gains Tax (CGT) status quo in the federal budget 2024-25, traders said. Pakistan Stock Exchange\u2019s (PSX) benchmark, the KSE-100 […]<\/p>\n","protected":false},"author":2,"featured_media":412697,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-412674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news"},"yoast_head":"\n