Pakistani stocks end up

Pakistani markets ended higher on Tuesday as cautious investors bought cheaper shares.

Pakistani markets ended higher on Tuesday as cautious investors bought cheaper shares after a 2.5 percent market drop the previous day,dealers said. But this was still off the day’s high.

Investors were also hopeful of a positive outcome in an upcoming meeting on Wednesday between the Karachi Stock Exchange (KSE) authorities and the National Assembly (NA) Standing Committee on Finance regarding a capital gains tax (CGT),said Asad Iqbal,Chief Investment Officer at Faysal Asset Management.

The KSE benchmark 100-share indexrose 0.23 percent,or 20.95 points,to end at 9,250.55 on turnover of 82.81 million shares. The KSE-index hit an intra-day high of 9,370.36 points.

The KSE-index fell 2.55 percent on Monday.

In its budget for the 2010/11 fiscal year,the government announced that a capital gains tax of 10 percent would be imposed on stocks held for six months or less and 7.5 percent on stocks held between 6 months to a year.

Dealers said the government had previously agreed with the stock market that the capital gains tax would be levied from the start of the 2010/11 fiscal year on July 1.

But now there are concerns that the government may seek to tax gains made before that date as well,they said.

Another disagreement was on the filing of returns for the new tax. Stockbrokers say they need to be filed annually,but the budget states that brokerage houses must submit quarterly returns.

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In the currency market,the rupee eased against the dollar amid higher dollar demand from importers,though dealers said trading volumes were low.

The rupee closed at 85.38/43 to the dollar,down from Monday’s close of 85.32/38.

In the money market,overnight rates ended at 12.15 percent,compared with Monday’s close of 12.40 percent and dealers said they were waiting for a treasury bill auction which is scheduled for Wednesday.

There are inflows worth 87.9 billion rupees ($1.02 billion) from maturing securities on Thursday,but their impact will be matched by a fortnightly central bank treasury bills auction on Wednesday,with a target of 90 billion rupees,dealers said.