KARACHI: The post-budget session saw a continuation of a strong buying spree following the decision to maintain a status quo for the equities market. Additionally, a tax increase on interest income for bank depositors was positively received by investors, prompting a buying rush across the board, tossing the KSE benchmark KSE 100 index to an all-time high above the 124,000-point barrier on Wednesday.
One major budgetary proposal suggests increasing the withholding tax (WHT) rate on interest income from 15 to 20 per cent for filers, effective July 1.
Ahsan Mehanti of Arif Habib Corporation said stocks reached a new all-time high, led by scrips across the board, as investors welcomed the status quo on equity taxes and higher withholding taxes on banking deposits in the federal budget 2025-26, which is expected to attract banking funds to the stock market for a better return.
He mentioned that the budget projections driven by the International Monetary Fund include a modest fiscal deficit of 3.9pc of GDP, a low current account deficit, and an expected GDP growth rate of 4.2pc. Additionally, it anticipates privatisation proceeds of Rs86.5 billion and a proposed increase in the federal Public Sector Development Programme to Rs1tr. These factors significantly contributed to the bullish close at the PSX.
According to brokerage Topline Securities, the bulls took firm control of the trading floor as the highly anticipated federal budget announcement sparked a wave of investor optimism, propelling the benchmark index into record-breaking territory. Widely applauded by market participants, the budget set a reassuring tone on fiscal direction and policy clarity, bolstering investor sentiment across the board.
The index shattered the psychological barrier of 124,000, marking a stunning intraday rally of 2,563 points, before closing at a historic high of 124,352.68 — up 2,328.24 points or 1.91pc.
Top contributors to the index’s rise included Lucky Cement, Fauji Fertiliser, Pakistan Petroleum, Engro Holdings, and Mari Energies, which collectively added a remarkable 953 points.
Trading activity turned robust as the trading volume rose 75.58pc to 1.04bn shares, while the traded value surged 113.98pc to Rs46.70bn day-on-day.
Ali Najib, Deputy Head of Trading Arif Habib Ltd, said the rally was fuelled by broad-based buying, as investors viewed the budget as “neutral to positive”, particularly in light of its alignment with fiscal prudence and IMF reform commitments.
Published in Dawn, June 12th, 2025
