Pakistan Stock Exchange sinks by greater than 2,000 factors after PM Sharif declares ‘super tax’

The Pakistan Stock Exchange plunged by greater than 2,000 factors or almost 5 per cent in simply 22 minutes of manic commerce at midday on Friday, after Prime Minister Shehbaz Sharif introduced a brand new “super tax” on large-scale industries that spooked buyers.

Sharif on Friday introduced a ten per cent “super tax” on large-scale industries like cement, metal and car, a transfer he mentioned was geared toward tackling spiralling inflation and saving the cash-strapped nation from going “bankrupt.” High web value people will even be topic to a “poverty alleviation tax,” the premier mentioned in his tackle to the nation.

Moments after Sharif’s announcement, the benchmark KSE-100 index was down by 2,053 factors or 4.8 per cent.

Raza Jaffar of Topline Securities mentioned the “super tax” introduced on Friday had induced mayhem on the inventory market and had spooked buyers’ confidence.

“The negative reaction of the market is not surprising as this new tax is going to hurt corporate profitability,” he mentioned.

As per the PSX rule guide if the index goes 5 per cent above or beneath its final shut and stays there for 5 minutes, buying and selling in all securities is halted for a specified interval.

“PSX witnessed massive pressure across the board after the Prime Minister announced a 10 per cent super tax on industries for one year to bridge the gap in the fiscal deficit,” Ahsan Mehanti of Arif Habib Corporation mentioned.

Khurram Schehzad, CEO of Alpha Beta Core advised the Dawn newspaper that after the federal government’s newest measures, the company earnings tax and investor tax will now exceed 50 per cent and 55 per cent, respectively.

“This is the highest not only in this region but in the history of Pakistan. In fact, it is one of the highest tax rates in the world,” he mentioned.

The KSE-100 index, which opened within the inexperienced consistent with its constructive development on Thursday, lastly closed on Friday at 41,051.79 factors after plummeting by 1,665.18 factors or 3.9 per cent. Shares of 364 firms have been traded in the course of the session. At the shut of buying and selling, 61 scrips closed within the inexperienced, 287 within the crimson, and 16 remained unchanged, based on Geo TV.

Overall buying and selling volumes rose to 424.22 million shares in contrast with Thursday’s tally of 349.48 million. The worth of shares traded in the course of the day was PKR 12.8 billion, it mentioned