KARACHI: Pakistani stocks ended higher on Thursday but investors' interest remained low and volume thin, which dealers said was due to the continued implementation of capital gains tax (CGT) on certain investments.
The Karachi Stock Exchange's benchmark 100-share index ended 0.42 percent, or 51.97 points, higher at 12,369.12.
Turnover was only 45.98 million shares, down from 54.8 million a day earlier.
"There was very little interest in the market and most investors continued to remain on the sidelines, largely due to the CGT issue," said Khalid Iqbal Siddiqui, director at brokers Invest and Finance Securities.
The government confounded market expectations by not removing capital gains tax on certain investments in the 2011/12 budget, announced on June 3.
A 10 percent capital gains tax is imposed on stocks held for six months or less, and a 7.5 percent tax is levied on stocks held between 6 months to a year.
"The market picked up some pace in the second half after the announcement of a board meeting by Pakistan Petroleum Ltd (PPL)next month, where it is expected to announce cash dividend," said Siddiqui.
PPL , the fourth in the table of volume leaders, ended 3.04 percent higher at 217.98 rupees.
In the currency market, the rupee eased to 85.84/89 to the dollar, from 85.80/85 the previous day, amid steady dollar demand from importers.
The rupee hit a record low of 86.50 last month, but dealers said the local unit is expected to stay largely stable in the coming days because of increased remittances from Pakistanis working abroad.
According to official data, remittances sent by overseas Pakistanis crossed $10 billion for the first time, hitting $10.1 billion in the first 11 months of the 2010/11 fiscal year, an increase of 25.20 percent compared with the same period last year.
In the money market, overnight rates rose to 13.90 percent from 11.0 percent a day earlier, following net outflows of more than 55 billion rupees ($640 million) from the market, dealers said.
Copyright Reuters, 2011
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