Stocks end up; rupee firms

KARACHI: Pakistani stocks ended up on Wednesday in light trading, as investors remained sidelined amid a lack of positive triggers, dealers said.

The Karachi Stock Exchange's benchmark 100-share index ended 0.35 percent, or 43.27 points, higher at 12,369.41.

Turnover fell to 59.47 million shares, compared with 68.17 million shares traded on Monday but still lower than the daily turnover which is usually on average around 100 million shares.

"There is still uncertainty in the market and lack of interest," said Mohammed Sohail, chief executive at Topline Securities Ltd.

Dealers said there was lack of interest in the market because of the continued implementation of a capital gains tax.

The government confounded market expectations earlier this month by not removing the 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 next triggers for the market will be the IMF meeting in July and the year-end corporate results," said Khalid Iqbal Siddiqui, director at Invest & Finance Securities Ltd.

Pakistan and IMF officials are due to meet in July to discuss the possible release of the sixth tranche which has been delayed since last August due to the slow implementation of fiscal reforms.

In the currency market, the rupee firmed to 85.59/64 to the dollar, from Tuesday's close of 85.65/70, amid lack of import payments.

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 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 fell to 11 percent, compared with the previous day's close of 13.00 percent as dealers said there were some payments of circular debt that came in the market.

Copyright Reuters, 2011