On Monday,Pakistani stocks remained lacklustre as investors,already cautious over a new capital gains tax,awaited the re-introduction of margin buying,dealers said. The Karachi Stock Exchange's (KSE) benchmark 100-share index,ended 0.62 percent,or 59.68 points,lower at 9,637.97. Turnover was only 14.71 million shares,down from 22.47 million shares traded on Friday,and the lowest since December 2008. There is absolutely no interest in the market for now,and such a situation is not good,said Sajid Bhanji,director at Arif Habib Ltd. Investors are still not sure what would be the impact of the new tax. Plus,in the absence of any leverage products,there is not enough liquidity available,he said. In its budget for the 2010/11 fiscal year,the government imposed a capital gains tax of 10 percent on stocks held for six months or less,and 7.5 percent on stocks held between 6 months and a year. The tax was activated on July 1,the start of the new fiscal year. Dealers said investors were also hoping for the re-introduction of margin buying in the market,which will improve liquidity and result in better volumes. KSE authorities and the Securities and Exchange Commission of Pakistan (SECP) met last month to discuss margin buying and other leveraged products,and decided to form a committee required to submit its recommendations within 15 working days. A meeting of the stakeholders to discuss the issue is scheduled for Wednesday,dealers said. In the currency market,the rupee ended at 85.45/50 to the dollar,little changed from Friday's close,and dealers said they expected the rupee to remain steady in coming weeks. In the money market,overnight rates edged up to close at 11.0-11.5,from 10.0-11.0 percent on Friday,and dealers said they expected them to remain around current levels in the absence of any major cash inflows.
