KARACHI: Despite trade and industry’s criticism of the tax-laden budgetary proposals for the next fiscal year, the Pakistani share market on Thursday staged an unprecedented single-day rally of almost 4 per cent in the post-budget session, lifting the index to a record closing above 76,000 closing.
Speaking with Dawn, Aqeel Karim Dhedhi, a veteran stockbroker and chairman of AKD Group, attributed the market rally to positive budgetary proposals, including higher development spending, withdrawal of tax exemptions, and bringing the high-earning export sector and non-filers into the regular tax net.
Explaining the market downturn a week before the announcement of the federal budget, he said the market was abuzz with propaganda that taxes on dividend income, CGT, etc., would be doubled, which shook investor confidence, especially foreigners. However, the budgetary proposals mainly target untaxed areas and potential non-filers. Hence, a robust rally reflects a positive economic outlook for the next fiscal year.
He, however, admitted that the rising cost of energy is a key hurdle. He hopes the government will extend some relief in the form of a discounted tariff for the industrial sector to keep the growth momentum intact. “This is direly needed to achieve an ambitious tax collection projection of Rs13 trillion,” he added.

Mr Dehdi did cite growing remittances, a better current and trade account position, a cut in interest, a successful China visit, etc., as factors that have led to the restoration of market confidence. Still, he remarked that political stability is mandatory for the stainability of this positivity.
Topline Securities Ltd Chief Executive Mohammed Sohail told Dawn that record gains were seen at PSX because the budget 2024-25 did not impose taxes on investment, as the market feared.
He said there were reports that the government may include dividends and Capital Gains Tax into the personal income tax of individuals and companies. However, no such step was announced.
“With budgetary targets in line with IMF estimates, investors will be confident that a new long-term loan will soon be approved, providing much-needed stability,” he remarked.
Ahsan Mehanti of Arif Habib Corporation said the government’s focus to appease IMF with Rs18.9tr budget outlay for a $8bn bailout programme, setting a higher GDP growth target to 3.6pc, lower fiscal deficit target at 6.9pc, Rs30bn projections for privatisation proceeds contributed to the bullish close.
As a result, the benchmark index hit an intraday record at 76,338.15 points and a low of 73,329.80. However, the index settled at an all-time high at 76,208.16 after rallying 3,410.73 points or 3.55pc on a day-on-day basis.
The overall trading volume surged 116.81 per cent to 635.52 million shares. The traded value almost tripled to Rs30.74bn on a day-on-day basis.
Stocks contributing significantly to the traded volume included K-Electric Ltd (66.83m shares), Fauji Cement (39.80m shares), WorldCall Telecom (21.75m shares), OGDCL (17.60m shares) and D.G. Khan Cement (17.35m shares).
The shares registering the most significant increases in their share prices in absolute terms were Unilever Foods (Rs149.99), Mari Petroleum (Rs137.66), Sazgar Engineering (Rs66.80), Lucky Cement (Rs66.73) and Sapphire Textile (Rs56.26).
Foreign investors remained active sellers as they offloaded shares worth $3.38m.
Published in Dawn, June 14th, 2024
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