Tag: 2024-25 budget

  • PSX witnesses largest single-day jump with gain of 3,410 points

    PSX witnesses largest single-day jump with gain of 3,410 points

    Pakistan’s benchmark stock index (PSX), the KSE-100, experienced an unprecedented surge on Thursday, marking its most significant gain in a year.

    This rally follows the government’s announcement of the 2024-25 budget, which alleviated concerns regarding potential increases in capital gains and dividend taxes.

    The KSE-100 index soared by 3,410.7 points, or 4.7 per cent, reaching 76,208 points. This increase represents the largest single-day jump in point terms.

    In the index’s history and the highest percentage rise since the International Monetary Fund (IMF) bailout package was introduced last year.

    Investor sentiment remained overwhelmingly positive throughout the trading session. The index hit an intraday high of 76,338.15 points, an increase of 3,540.72 points, and a low of 73,329.80 points, still up by 532.37 points.

    By the end of the day, the total volume traded on the KSE-100 index was 344.98 million shares.

    Out of the 100 companies listed on the index, 87 saw their shares close higher, nine experienced declines, and four remained unchanged.

    The government’s decision to set the capital gains tax at a flat rate of 15 per cent for filers on the sale of securities acquired on or after July 1, 2024, was a significant factor contributing to the market’s positive performance.

    For non-filers, capital gains will be taxed at normal rates, with a minimum rate of 15 per cent and a maximum rate of 45 per cent.

    This decisive move by the government has been well-received by investors, bringing clarity and stability to the market and fostering an environment of confidence and growth.

  • State Bank of Pakistan cuts policy rate to 20.5%

    State Bank of Pakistan cuts policy rate to 20.5%

    The State Bank of Pakistan (SBP) has reduced its key policy rate by 150 basis points to 20.5 per cent, marking the first rate cut in nearly four years.

    The move, announced on Monday, aligns with market analysts’ expectations and comes just ahead of the country’s annual budget for 2024-25.

    Since June 2023, the central bank had maintained borrowing costs at a record 22 per cent. The Monetary Policy Committee (MPC) highlighted that while the significant decline in inflation since February was generally anticipated, the inflation figures for May were better than expected.

    The MPC also observed that underlying inflationary pressures are easing due to the tight monetary policy stance and fiscal consolidation efforts.

    This trend is evident from the continued moderation in core inflation and the improvement in inflation expectations among both consumers and businesses, according to recent surveys.

    Despite acknowledging some upside risks to the near-term inflation outlook, particularly from upcoming budgetary measures and uncertainties regarding future energy prices, the MPC remains confident that the cumulative impact of previous monetary tightening will help keep inflationary pressures in check.