KARACHI, Jan 12: The levy of stamp duty on electronic transfer of shares to or through the Central Depository Company (CDC), imposed in the Sindh Finance Bill 2006-07, has been held in abeyance for two years, beginning the current financial year.

The decision was reached on Friday after talks involving senior representatives of the Government of Sindh and members from the CDC, the mutual funds and the stock brokers community.

Reaching the market in the second session, following the Friday prayer break, the news of deferment of stamp duty was greeted with a 66-point rise in the KSE-100 index. That put the market that had been dilly-dallying for the past three days back on track.

The levy of stamp duty on transfer of shares to or through CDC at 0.1 per cent of face value was decreed in the Sindh budget 2006-07, which was taken by the investors in distaste. Series of meetings that were held between the Sindh government and the bourses ended without an outcome. But on Friday, the parties managed to find a mutually acceptable solution.

Those participating in the talks included Sindh Minister for Revenue Dr Irfan Gul Magsi, Advisor to Chief Minister for Finance MA Jalil, Chairman of Securities & Exchange Commission of Pakistan Razi-ur-Rehman, Senior Member of Sindh Board of Revenue Syed Anwar Hyder, ex-Member (RS&EP) of Sindh Board of Revenue Aijaz Hussain Kazi, Managing Director of Karachi Stock Exchange MA Lodhi, Chief Executive Officer of CDC Mohammed Hanif Jakhura, Chairman of Mutual Fund Association of Pakistan M Najam Ali and Secretary CDC Kamran Kazi.

Some brokers admitted that it was not the sum of money which at 0.1 per cent of Rs10 was conceded to be a minor amount, but the ‘psychological impact’ that was doing the damage. The fear of the levy was one of the reasons blamed for the recent slump in volume of daily trade.

The investors were also peeved at the fact that the duty was leviable only on companies registered in Sindh irrespective of the fact where the trade takes place.