KARACHI: The stock market staged a robust rally on Monday as brokers and investors were jubilant over the outcome of meeting with prime minister and his team on Sunday. The index, which had witnessed the worst weekly performance in over a year last week with a loss of 1,934 points, started out on a positive note as buyers fell over one another to accumulate stocks, sending the market up by 659 points in just the first hour of trading.

By the close of trade, the index had gained 737.58 points (1.9 per cent) and settled at 39,299.63.

Former PSX Chairman Arif Habib told Dawn that all major demands of the stock market were conceded by the government and expressed satisfaction over the patient hearing from prime and finance minister on participants’ proposal that could rejuvenate the long languishing market.

The prime minister said the government was committed to stabilising the market and help wealth creation while finance minister — who once sat on the board of the exchange — was said to display complete knowledge about the difficulties faced by the investors.

Among the list of six major issues put forward by the bourse and accepted by Imran Khan was the reduction of advance tax to 0.01pc, from 0.2pc on the purchase and sale of shares (both sides). Market participants believe it would help generate volume.

Secondly, the government agreed to rationalise capital gains tax on equities in line with real estate in the next budget. It was agreed to allow carry forward of capital losses up to three years; rationalisation of taxation of holding companies on inter-corporate dividend; promote listing of government and CPEC projects debts at the exchange; and curtail the over regulation over brokers to promote equity investments.

Habib believes that since the two sides agreed to enact the proposed changes on fast track, the implementation process was likely to be completed before the announcement of the next budget.

As investors returned in droves to the market, traded volume jumped 20pc to 154 million shares with individuals taking the lead among buyers. Major gainers were Pakistan Petroleum, up 5pc, Oil and Gas Development Company 4.43pc, Habib Bank 3.38pc, Pakistan Oilfields 4.24pc and Lucky Cement 2.32pc.

Published in Dawn, December 11th, 2018