The Pakistan Stock Exchange fell more than 2,000 points, or nearly 5 per cent, in just 22 minutes of frantic trade on Friday afternoon after Prime Minister Shahbaz Sharif announced a new “super tax” on large-scale industries that stunned investors. Gave.
Mr Sharif on Friday announced a 10 per cent “super tax” on large-scale industries such as cement, steel and automobiles, a move he said was aimed at tackling rising inflation and saving the cash-strapped country from going “bankrupt”. was. The prime minister said in his address to the nation, high net worth individuals would also be subject to a “poverty alleviation tax”.
Moments after Mr Sharif’s announcement, the benchmark KSE-100 index was down 2,053 points, or 4.8 per cent.
Raza Zafar of Topline Securities said the “super tax” announced on Friday created havoc in the stock market and dented investor confidence.
“The negative market reaction is not surprising as this new tax is going to hurt corporate profits,” he said.
Based on the PSX rulebook, trading in all securities is halted for a specified period if the index moves up or down five percent from its last close and remains there for five minutes.
“PSX saw huge pressure after the Prime Minister announced a 10 per cent super tax on industries for a year to bridge the fiscal deficit gap,” said Ahsan Mehanti of Arif Habib Corporation.
Alpha Beta Core CEO Khurram Shahzad told Dawn newspaper that following the latest steps by the government, corporate income tax and investor tax will now exceed 50 per cent and 55 per cent, respectively.
“It is the highest not only in the region but in the history of Pakistan. In fact, it has one of the highest tax rates in the world,” he said.
The KSE-100 index, which opened in green in line with its positive trend on Thursday, closed at 41,051.79 points on Friday after falling 1,665.18 points or 3.9 per cent.
Shares of 364 companies were traded during the session. According to Jio TV, at the close of trading, 61 shares were in green, 287 in red and 16 remained unchanged.
Overall trading volume increased to 424.22 million shares against Thursday’s 349.48 million. It said the shares traded during the day were valued at PKR 12.8 billion.