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Pakistan stocks welcome the national budget

KARACHI —The share market yesterday welcomed the new national budget but the initial buying euphoria could not be sustained owing apparently to some pressing political constraints, notably the lawyers long march followed by stray profit-selling.

The market's positive reaction to the new budget was well-reflected in the early run-up of the KSE 100-share index, which shot up by 157 points to quote at the session's high of 13,163.45. But it failed to sustain it on selling triggered by fears of violence owing to lawyers long march when it arrives in Islamabad.

It was finally ended with a modest rise of 9.26 points at 13,025.64 as some leading base shares came in for selling under the lead of National Bank.The early run-up was attributed to sharp rise in some of the leading base shares led by MCB, which was quoted higher by Rs4.07 at Rs309.97.

"The budget literally meets all the demands of investors and brokers including tax exemption on capital gains tax for another two years, status quo on other corporate taxes such as capital value tax but now the only worry of the market was said to be political tensions", analyst Ahsan Mehanti thinks.

Analyst Faisal A.Rajabali attributed the late slowdown to withdrawal of financial support, said to be a tactical move to meet the market technical demands but at no stage it was felt that the current run-up is overdone.

He said the market had already absorbed a good part of the corporate tax reliefs in the pre-budget sessions after having pushed the index above the barrier of 13,000 points.

The investors will be back in the market after having full view of the fiscal measures and their likely negative or positive sympathetic impact on the share market, he added.

Among the top gainers Bata Pakistan and Attock Petroleum were leading,up by Rs24.25 and 22.20, while Exide Pakistan and EFU General Insurance fell by Rs8.70 and 8.50.

Trading volume was light at 128 million shares as leading investors were still in the process of analysing the taxation proposals as losers held a modest lead over the gainers at 162 to 135, with 34 shares holding on to the last levels.

Bank of Punjab led the list of actively traded shares, higher by Rs1.69 at Rs35.65 on 7 million shares, followed by Fauji Fertiliser, one of the benefiaries of budgetary reliefs alongwith banks and oil sectors, higher by Rs1.79 at Rs37.69 on 6 million shares, Arif Habib Securities, lower by Rs1.11 at Rs172.69 also on 6 million shares, Nishat Mills, off Rs1.49 at Rs100.50 on 5 million shares