Karachi, June 24 (PTI) The Pakistan Stock Exchange plunged more than 2,000 points or almost 5% in just 22 minutes of manic trade at noon on Friday, after Prime Minister Shehbaz Sharif announced a new super tax on large -scale industries that have frightened investors.
Friday, Sharif announced a superb 10% tax on large -scale industries such as cement, steel and automobile, a decision which, according to him, aimed to tackle spiral inflation and avoid that the country short of money does not “bankrupt”.Individuals of high net value will also be subject to a “tax on poverty reduction,” said the Prime Minister in his speech to the nation.
A few moments after Sharif’s announcement, the Benchmark KSE-100 index fell 2,053 points or 4.8%.Raza Jaffar of Topline Securities said that the super tax announced on Friday had caused chaos on the stock market and had frightened the confidence of investors.
The negative market reaction is not surprising because this new tax will affect business profitability, he said.According to the PSX rules book if the index goes five percent above or below its last closure and remains there for five minutes, the trade in all titles is interrupted for a specified period.”The PSX witnessed massive pressure at all levels after the Prime Minister announced a 10% super tax on the industries for a year to fill the budget deficit gap,” said Ahsan Mehanti d’Arif Habib Corporation.
Khurram Schehzad, CEO of Alpha Beta Core, told the Dawn newspaper that after the latest government measures, corporate income tax and investor tax will now exceed 50% and 55%, respectively.”It is the highest not only in this region but in the history of Pakistan. In fact, it is one of the highest tax rates in the world,” he said.
The KSE-100 index, which opened its doors in green in accordance with its positive trend on Thursday, finally closed Friday at 41,051.79 points after falling by 1,665.18 points or 3.9%.The shares of 364 companies were negotiated during the session. At the end of trading, 61 scripts closed in the green, 287 in the red and 16 remained unchanged, according to Geo TV.
Global negotiation volumes reached 424.22 million shares, against the total of 349.48 million on Thursday. The value of the shares negotiated during the day was 12.8 billion PKR, he said.