Islamabad January 8 2025: The KSE100 index closed sharply lower today, losing 1,914 points, reflecting aggressive selling pressure from Banks as Prime Minister visits PSX.
The prime minister visited Pakistan Stock Exchange to mark the exceptional performance of PSX and becoming the top stock market in the world.
Shehbaz Sharif underscored the significance of progressive taxation and structural reforms and said that Pakistan had a target of enhancing the tax to GDP ratio to 10.6 percent under the commitments with IMF but we have taken the ratio to 10.8% that is a major achievement.
Expressing satisfaction on significant decrease in the policy rate from 22% to 13%, he noted that there was more space available to further decrease it but any such move must be made in a prudent and cautious manner.
Banks played a significant role in driving the decline, recording a notable net outflow of US$ 5.95 million, as their selling activity of US$ 8.33 million far exceeded their purchases of US$ 2.38 million, signalling a bearish sentiment within the sector. Banks sold US$ 4.5 million worth smaller shares hurting the retail investors the most.
Earlier the government has increased the standard income tax for banks from 39% to 44% for the current tax year ending on December 31. For tax year 2026, starting from January 1, the rate will go down to 43%. For tax year 2027 and onwards, the rate will be 42%, through ordinance.
The 100-Index of the Pakistan Stock Exchange (PSX) continued with bearish trend on Wednesday, losing 1,904.23 points, a negative change of 1.64 percent, closing at 114,148.46 points as compared to 116,052.68 points on the last trading day.
A total of 116,052.68 shares were traded during the day as compared to 792,770,655 shares the previous trading day, whereas the price of shares stood at Rs 32.466 billion against Rs.39.694 billion on the last trading day.
As many as 464 companies transacted their shares in the stock market, 118 of them recorded gains and 293 sustained losses, whereas the share price of 53 companies remained unchanged.
Foreign Investors Portfolio Investment (FIPI) saw a net outflow of US$ 1.81 million, with sales of US$ 11.13 million surpassing their purchases of US$ 9.31 million.
Individuals, who were the most active in terms of gross activity, registered nearly balanced flows, with a marginal net buying position of US$ 0.14 million, as their buying of US$ 111.22 million closely matched their selling of US$ 111.08 million. Brokers and “Others” also contributed to the selling pressure, with net outflows of US$ 0.30 million each.
On the other hand, insurance companies and corporates were the only bright spots, with net inflows of US$ 1.42 and US$ 5.89 million, respectively, providing some support to the market. However, their positive flows were insufficient to offset the heavy selling pressure across other investor groups, culminating in a significant drop in the index.
