0
KARACHI: Pakistani stocks rose more than 1.5 per cent to close at their highest since June 2008 on Friday on expectations of progress on issues like capital gains tax, dealers said.
Officials from the Federal board of Revenue (FBR) and the Securities and Exchange Commission of Pakistan (SECP) are meeting on Friday to discuss policy proposals.
“The hope that FBR will soon accept SECP’s gains tax proposal provided a boost to local equities,” said Samar Iqbal, a dealer at Topline Securities.
The Karachi Stock Exchange (KSE) benchmark 100-share index rose 1.52 per cent, or 190.60 points, to end at 12,706.52 points.
Turnover rose to 192.35 million shares, compared with 178.04 million shares traded on Thursday.
In the currency market, the rupee ended weaker at 90.85/90 to the dollar, compared with Thursday’s close of 90.80/83 because of increased import payments.
Dealers expect pressure on the rupee to persist because of rising international oil prices, which topped $123 a barrel on Friday and were heading for a fifth straight weekly gain.
The rupee touched a record low of 91.28 to the dollar in January, pressured by worries about higher payments for oil imports and the country’s overall economic health.
Islamabad started repaying an $8 billion International Monetary Fund (IMF) loan on Friday with a $399 million payment.
The State Bank of Pakistan cautioned this month that financing the country’s projected current account deficit would be a challenge.
The deficit is expected to widen further in the coming months because of debt repayments and a lack of external aid.
The current account recorded a provisional deficit of $2.633 billion in the first seven months of the 2011/12 fiscal year, compared with a deficit of $96 million in the same period last year, according to data from the State Bank of Pakistan.
Dealers said they were also cautious after the IMF advised Pakistan to take immediate steps to tackle growing budget pressures and raise interest rates to contain inflation.
The central bank kept the key policy rate flat at 12 per cent for the next two months in its monetary policy announcement earlier this month.
The IMF in February projected a widening of Pakistan’s budget deficit in the 2011/12 fiscal year to 7 per cent of gross domestic product, compared with the government’s revised budget target of 4.7 per cent.
In the money market, overnight rates rose to 11.75 per cent, compared with the previous day’s close of 9 per cent amid tight liquidity in the interbank market.
