Stocks edge lower after budget, but seen steady
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Stocks edge lower after budget, but seen steady

Karāchi : Pakistan | Jun 06, 2011 at 6:26 AM PDT
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KARACHI: Pakistani stocks ended lower on Monday, on sentiment dampened by an announcement made on Friday in the national budget for the fiscal year 2011/12 (July-June) that capital gains tax (CGT) would still apply to individual investors.

Dealers said the losses were capped by investor interest in some sectors benefiting from the budget.

The Karachi Stock Exchange’s benchmark 100-share index ended 0.20 per cent, or 25.01 points, lower at 12,211.65.

Turnover rose to 95.85 million shares from 65.31 million on Friday.

“The market was expecting the removal of the CGT, which did not happen, so that had a negative impact today,” said Sajid Bhanji, director at brokers Arif Habib Ltd.

“But the government reduced the excise duty on cement, which had a positive impact, and also it did not increase the rate of corporate tax on bank, as was expected, which is also positive for the market,” he said.

Cement manufacturers were amongst the most active companies on Monday, with DG Khan Cement ending 1.22 per cent higher at 24.97 rupees.

Dealers said they expected the market to remain steady in the near-term, before regaining positive momentum.

In the currency market, the rupee ended at 85.92/94 to the dollar, little changed from Friday’s close, as dollar supplies matched demand from importers.

The rupee hit a record low of 86.50 last month, and dealers said the local unit may face some pressure in days ahead, amid increased demand for dollar for import payments and a bleak outlook.

khalidhussain is based in Jhang, Punjab, Pakistan, and is a Stringer for Allvoices.
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