IMF\u2019s refusal to allow Pakistan reduce property transaction taxes dents market morale, analysts
\n Islamabad
\nThe bourse opened the week on a negative note, plunging sharply amid concerns in the cement sector, low trading volumes ahead of Eid ul Fitr, and rollover week pressures.
\nThe Pakistan Stock Exchange\u2019s (PSX) benchmark KSE-100 Index dropped 2,002.55 points, or -1.69%, to close at 116,439.62. The day\u2019s high was recorded at 118,797.70, while the low touched 116,257.51 \u2014 a fall of 2,184.66 points, or -1.84% from the previous session\u2019s close of 118,442.17.
\nAccording to market analysts, investor sentiment was dampened by news of increased royalty charges on the cement sector by the Khyber Pakhtunkhwa government.
\n\u201cOne reason is that there\u2019s news in the cement sector suggesting that KP is increasing royalty, which has caused cement stocks to decline, and that in turn has pulled the market down,\u201d said Sana Tawfik, Head of Research at Arif Habib Limited.
\n\u201cSecondly, trading volumes are low because Eid is approaching. Lastly, it\u2019s rollover week. So these three factors are basically the reason the market is down,\u201d she added.
\nThe sudden drop comes after the PSX witnessed a strong rally over the past week, driven by optimism over progress in talks with the International Monetary Fund (IMF) and expectations of reforms in the energy sector. However, fresh developments over the weekend have somewhat stalled that momentum.
\nIn a setback to the real estate sector, the IMF has reportedly rejected Pakistan\u2019s request to reduce transaction taxes for the property sector. While earlier government officials claimed an agreement in principle had been reached to lower withholding tax on property purchases by 2% starting April 1, the IMF has clarified it has not approved any such concession. This follows similar refusals from the Fund on reducing tax rates for the tobacco and beverage sectors.
\nThe global lender has also insisted on written assurances from Pakistan that provincial governments will not engage in wheat procurement, as part of the conditions for reaching a Staff Level Agreement (SLA) under the $7 billion Extended Fund Facility (EFF). Negotiations, however, remain ongoing.
\nFinance Minister Muhammad Aurangzeb, on Friday, struck an optimistic tone, expressing confidence that Pakistan would soon receive positive news from the IMF. He told reporters that negotiations were in their final stages with no major hurdles in the way, reaffirming the government\u2019s commitment to fiscal discipline and economic reforms.
\nDespite mounting pressures, some macroeconomic indicators remain encouraging. The Sensitive Price Index (SPI), which tracks short-term inflation, recorded a 0.35% week-on-week decline in the week ending March 20, reflecting continued easing of inflationary pressures. On Friday, the PSX had already shown signs of fatigue, ending its six-session winning streak with the KSE-100 Index slipping by 327.60 points, or 0.28%, to close at 118,442.17. During that session, the index reached a high of 119,405.91 and dipped as low as 118,334.40.<\/p>\n","protected":false},"excerpt":{"rendered":"
IMF\u2019s refusal to allow Pakistan reduce property transaction taxes dents market morale, analysts Islamabad The bourse opened the week on a negative note, plunging sharply amid concerns in the cement sector, low trading volumes ahead of Eid ul Fitr, and rollover week pressures. The Pakistan Stock Exchange\u2019s (PSX) benchmark KSE-100 Index dropped 2,002.55 points, or […]<\/p>\n","protected":false},"author":2,"featured_media":466983,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-469039","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n