SUNDAY JANUARY 22: Government decision to attract more investors

KARACHI: The government decision to approve all SECP proposals is expected to attract more investors and to increase trading activities at the stock markets, analysts said. They said the imposition of capital gains tax and its mode of collection had affected investor interest badly and the average daily trade had declined drastically at 10-year lowest levels.
The participation of retail investors having their share of over 50 percent in the daily trading activities remained extremely low since the imposition of capital gains tax, they mentioned. "The taxation measures approved by the Finance Minister will provide life to a dead market," Muhammad Sohail, leading analyst and former member director at Karachi Stock Exchange board said.
"The market volumes that fell to 10-year lowest level after imposition of capital gains tax would improve," he said. "A vibrant capital market will help in new listings, capital formation and privatisation," he added. The benchmark KSE-100 index had already registered healthy gains of 865 points during the last six sessions on investors' expectations over the acceptance of SECP proposals and tax amnesty. Trading activities on the local bourse also increased significantly as the volumes on Friday stood at 178 million shares as compared to an average daily trade of around 30 million shares during the last many months.