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Clarification about imposition of tax boosts KSE index by 176.42 points

Intense buying activities were witnessed at the Karachi stock market on the last trading day of the week Friday powered by Adviser to PM on Finance Shaukat Tareen’s clarification denying imposition of tax on the bourse.

Analysts said that investors built portfolios as proposal for Rs 650 billion Public Sector Development Programme (PSDP) allocation for FY2009-10 forwarded by Annual Plan Coordination Committee (APCC) was taken positive for cement sector and the economy and restored the confidence among investors.

The Karachi Stock Exchange (KSE) 100-share index gained 176.42 points or 2.53 percent to close at 7,146.24 points as compared with 6,969.82 points traded in the previous session. The KSE 30-share index increased by 231.87 points and closed at 7,715.97 points as compared to 7,484.10 points. The KMI 30 index also surged 318.22 points to close at 10,335.54 points as against 10,017.32 points.

The market turnover went up by 38.59 percent and traded 111.46 million shares as compared to previous session’s 80.42 million shares. The overall market capitalisation fell 1.38 percent to close at Rs 2.067 trillion as compared with Rs 2.096 trillion. Out of total 312 companies, 70 closed in positive zone, 323 in negative, while 10 remained unchanged.

“Rally initiated from the closing hours on Thursday found an extension right from the word go, besides providing an opportunity of profit-taking to the buyers in previous session mainly those who followed the strategy of buy on deep reds,” said Analyst at Aziz Fida Husein, Hasnain Asghar Ali. “Clarification denying imposition of additional taxes on share business allowed renewed buying interest in the main board stocks.”

The value buyers did stay on back foot initially, but they had to increase the buying limits mainly due to absence of leverage float and rumours of a modified leverage product for addressing financial needs allowed the momentum to stay positive.

Penny stocks mainly Pakistan PTA supported the rise in turnover as they contributed almost 35 percent to the total turnover on back of news that a foreign company has shown interest in acquiring 15 percent of the total outstanding shares and value of shares traded however failed to register remarkable increase identifying need of ready board leverage.

Brokers said passing of $1.5 billion aid per annum by US congress, pledge of $224 million for internally displaced persons by donor agencies and advancement in operation against militancy in Swat were taken positively by investors. Minimal reduction in local petroleum prices announced by the government later on Thursday night was also taken positively by the oil marketing companies.

The KSE 100-share index opened in the green zone with a gain of 67.24 points and at the end of the day closed at 7,146.24 points with a gain of 176.42 points.

Pak PTA Ltd was the volume leader in the share market with 55.19 million shares as it closed at Rs 3.67 after opening at Rs 2.99 making a financial gain of 68 paisas. Jah Sidd and Co traded 11.38 million shares as it closed at Rs 25.33 from its opening at Rs 24.13 gaining Rs 1.20. DGK Cement traded 11.37 million shares as it closed at Rs 26.30 as against its opening at Rs 25.50 gaining 80 paisas. NIB Bank traded 7.35 million shares as it closed at Rs 5.66 as compared to its opening at Rs 5.21 gaining 45 paisas. Fauji Fertilizer Co traded 5.65 million shares as it closed at Rs 101.35 as compared with its opening at Rs 98.20 gaining Rs 3.15.

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