Stocks marginally lower in light trade; banks closed

KARACHI: Pakistani stocks ended marginally lower on Friday in light trade as most institutions stayed out of the market on the first day of the new fiscal year.

The Karachi Stock Exchange's benchmark 100-share index ended 0.09 percent, or 11.86 points, lower at 12,484.17, on turnover of only 34.69 million shares.

"There was not much activity in the market, and most institutions were absent on the first day of the new fiscal year," said Khalid Iqbal Siddiqui, director at brokers Invest and Finance Securities Ltd. Friday was also a bank holiday.

"There was no trigger in the market, and we saw little interest in the blue chips. Most of the activity was witnessed in second-tier stocks," he said.

Volume has generally been low in the outgoing 2011/11 fiscal year. Average daily volumes during the year fell to a nine-year low, analysts said.

Topline Securities brokers said in a report this week that trade was also damaged by security concerns, the economic slowdown, higher interest rates and the re-introduction of a capital gains tax (CGT) after a 30-year gap.

The government confounded market expectations by retaining the CGT 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 interbank currency and money markets were closed on Friday for a bank holiday.

Copyright Reuters, 2011