The Pakistan Stock Exchange exhibited robust performance in its initial trading session on Thursday, following the unveiling of the federal government’s annual budget.
The benchmark KSE-100 index, monitoring the top 100 companies listed on the exchange, surged past the significant milestone of 75,000 points. By 12:30 pm on Thursday, the KSE-100 benchmark index had soared to 75,676.24 points, reflecting a remarkable increase of 2,878.81 points or 3.95% from the previous day’s close.
A widespread surge in buying activity was witnessed across pivotal sectors of the Pakistani stock market. Notable sectors experiencing an uptick included automobile manufacturers, cement companies, commercial banks, engineering firms, oil and gas marketing companies, and refineries.
The optimistic market response followed the announcement of Pakistan’s federal budget for the 2024-25 fiscal year by Finance Minister Muhammad Aurangzeb. The budget aimed at achieving a modest economic growth rate of 3.6% for the upcoming year, as the government endeavored to address the nation’s burgeoning fiscal challenges and align with International Monetary Fund requirements through increased taxation.
Analysts observed a generally positive sentiment towards the budget’s impact on the stock market. One noteworthy aspect was the unchanged treatment of Capital Gains Tax (CGT), maintaining it at normal tax rates.
Sana Tawfik, head of Research at Arif Habib Limited (AHL), remarked on the government’s intent to introduce tax reforms and take stringent measures against non-filers, deemed positive for the market.
Similarly, Topline Securities highlighted the budget’s effect on dividend income tax and Federal Excise Duty increase on cement, alongside the positive impact of the rise in Public Sector Development Programme on cement and engineering stocks.
Nevertheless, concerns were raised regarding the textile sector, as the proposal to include exporters in the normal tax regime was viewed as unfavorable. Despite these considerations, the overall market response remained largely optimistic, exemplified by the KSE-100 Index’s noteworthy surge.
