Profit-taking erased earlier gains at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 closed with an increase of nearly 140 points on Wednesday.
A topsy-turvy session was witnessed at the bourse, as the benchmark index hit a high of 62,399.53 before retreating due to development on the political front where former prime minister Imran Khan was handed another sentence by the court – this time in the Toshakhana case.
A buying rally led by energy stocks was witnessed, for most of the trading session, pushing the index to an intra-day high of 62,600.12.
However, the benchmark index retreated amid late selling to close at 61,979.18, an increase of 137.44 points or 0.22%.
Index-heavy stocks including Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) closed marginally positive.
At close on Tuesday, volatility on the political front had dented sentiment at the bourse as the benchmark index lost over 900 points to settle at 61,841.74.
Experts said the return of some positivity came amid reports of the resumption of the circular debt by the interim government, which drove index-heavy energy sector stocks upwards.
Business Recorder, citing its sources in the Finance Ministry, reported that Caretaker Minister for Power and Petroleum, Muhammad Ali, has set an extremely ambitious circular debt reduction plan amounting to Rs1,268 billion for caretaker Finance Minister Dr Shamshad Akhtar for onward sharing with the International Monetary Fund (IMF) for its concurrence.
Concurrence from IMF shall be required highlighting a rare opportunity to settle energy sector circular debt (CD) stock of Rs1,268 billion using funding from the government of Pakistan (GoP) for one to two days.
The proposal is not contrary in any manner to MoF’s commitment with regards to supplementary grants (SG) as the SG required for this CD settlement is budget neutral and will be returned with an extra amount for the GoP and tax revenues for FBR.
Moreover, the caretaker federal cabinet has approved reorganisation and digitisation of the Federal Board of Revenue (FBR) after the recommendations of the inter-ministerial committee headed by the finance minister were presented.
In light of these reforms, the Federal Tax Policy Board will be formed in the Revenue Division, which will be responsible for the formulation of tax policy in the country, determination of revenue targets and cooperation between stakeholders. The Federal Policy Board will be headed by the federal finance minister.
As a result of the restructuring, Customs and Inland Revenue will be headed, separately, by Director Generals of the respective cadre.
Globally, Asian shares fell broadly on Wednesday, while the Australian dollar slid after surprisingly soft domestic inflation data and short-dated Treasury yields stayed elevated ahead of a rate decision from the Federal Reserve.
Chinese markets wobbled after an official factory survey showed China’s manufacturing activity in January contracted for a fourth straight month.
MSCI’s broadest index of Asia-Pacific shares outside Japan, opens new tab slid 0.5% and was heading for a monthly loss of 5%, snapping a two-month winning streak.
That was in part due to a steep selloff in Chinese markets amid angst over the lack of large stimulus moves by authorities to shore up the economy and waning investor confidence.
Meanwhile, the Pakistani rupee increased a marginal 0.02% against the US dollar in the inter-bank market on Wednesday. At close, the local unit settled at 279.50 after a gain of Re0.05 against the greenback, as per the State Bank of Pakistan.
Volume on the all-share index decreased to 276.5 million from 436.1 million a session before.
The value of shares declined to Rs9.27 billion from Rs15.28 billion in the previous session.
K-Electric Ltd. was the volume leader with 36.3 million shares, followed by B.O.Punjab with 21 million shares, and Hascol Petrol at 14.1 million shares.
Shares of 349 companies were traded on Wednesday, of which 165 registered an increase, 151 recorded a fall, while 33 remained unchanged.
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