KARACHI, June 16: Share market on Wednesday lacked normal trading interest as investors were in two minds about an early settlement of the Capital Value Tax issue despite positive feelers from the relevant quarters.
The KSE 100-share index suffered a modest decline of 12.94 points at 5,305.42 as compared to 5,318.36 a day earlier, reflecting the weakness of leading base shares, notably OGDC and PTCL.
"When any issue is referred to a committee to give its findings, it means it has reached the dead end", one broker said in a lighter vein "it is pretty difficult to achieve eagerly awaited consensus to settle the burning issue just in one go.
"Both the Central Board of Revenue and the exponents of the end of the CVT know where the solution lies", another said "the truth will finally prevail sans settlement". The gap is too big to be bridged, he says "the CBR demands Rs5bn, while bourses chief offer Rs1.5bn and how there could be a settlement without an agreed tax amount."
Analysts said general investors need not to worry as their saving was not under any financial threat and everything would be normal after the dust settled down. The market should have tasted one of the dullest trading session in the recent past but strong presence of some leading financial institutions kept easy going on selected counters.
"Counter proposals by the bourses chief to generate Rs1.5 billion revenue in lieu of the CVT have reinforced investor perceptions that the end of the levy appears too far", analysts said "most of them indulged in a manageable business".
The bourses chief had, among others, proposed to raise withholding tax on their share income to 10 per cent from the previous five per cent to raise Rs1.5 billion, but the government was eyeing a figure of Rs10 billion.
"Those who have stake in the share business need to share windfall profits they had netted during the last two years after the market capital and the index soared by 300 per cent," says a leading analyst "I don't think the end of the CVT is now that easy as it requires Parliament nod".
Counter negative moves by those who are now at the receiving end will continue to manifest in various forms as the government seems to have digested the negative fallout of the violent reaction.
A sharp decline in the turnover figure from 428m shares a day earlier to 333m shares reflects that both leading investors and the brokerage houses by now have a fair idea about the levy.
Broader market, however, performed well as most of the dividend-driven shares in the textile and sugar sectors posted good gains amid moderately active trading. Both PSO and ICI Pakistan performed well on reports of higher earnings.
The latter also showed good gains amid reports that it had decided to sell its 25 per cent shareholding in Pak PTA, which is under pressure and had fallen by Rs2 at Rs16.70. ICI Pakistan and PSO rose by Rs4.45 and Rs5.55.
Other good gainers were led by Abbott Lab, Millat Tractors, which had been under pressure after the permission to allow import of tractors, Island Textiles, IGI Insurance and Fateh Textiles, which rose by Rs8 to Rs25.
Losers were led by Shell Pakistan, Al-Ghazi Tractors, Fazal Textiles, Colgate Pakistan, Javed Omer and Arif Habib Securities, off by Rs4 to Rs30. Trading volume suffered sharp contraction at 333m shares but gainers managed to hold a modest edge over the losers at 174 to 170, with 39 shares holding on to the last levels.
Fauji Cement again topped the list of actives, up by 45 paisa at Rs18.25 on 46m shares followed by OGDC, easy by the same amount at Rs64.65 on 24m shares, D.G.Khan Cement, easy five paisa at Rs58.75 on 20m shares, Nimir Chemicals, up by 65 paisa at Rs7.65 on 18m shares and Sui Southern Gas, up by 35 paisa at Rs33.90 on 17m shares.
Other actives were led by Nishat Mills, unchanged on 15m shares, Bosicor Pakistan, higher by Rs1.55 also on 15m shares, National Bank, off 75 paisa at Rs62.80 on 13m shares, F.F.Bin Qasim Fertilizer, lower 15 paisa on 12m shares and Sui Northern Gas, up by 55 paisa at Rs65.55 on 11m shares.
FORWARD COUNTER: PSO came in for active short-covering at the lower level and recovered Rs5.10 at Rs260.10 on 5m shares followed by PTCL, easy 35 paisa at Rs41.55 on 3m shares, Bank Alfalah, steady by five paisa at Rs61.85 on 2m shares, Hub-Power, lower five paisa at Rs32.10 and ICI Pakistan, up by Rs4 at Rs84.05 on 2m shares each.
DEFAULTER COS: Unity Modaraba led the list of actives on this counter, firm five paisa at Rs2.70 on 0.707m shares followed by Asset Investment Bank, lower 20 paisa at Rs8.35 on 0.578m shares.
Other actives were led by Dandot Cement, easy five paisa at Rs11.70 on 0.490m shares and Indus Polyester, up by 35 paisa at Rs9.15 on 0.407m shares.
