Daily Times

Pakistani equities on Wednesday closed on a positive note with the benchmark KSE 100 Index gaining 278 points, closing at 34,938 levels, up 0.8 percent.

The local bourse kicked off on a negative note, making a low of -52 point but later on recovered after making a high of +478 points.

An equity analyst at IIS Securities said KSE 100 Index remained volatile throughout the session. He said much-awaited budget was unveiled on Tuesday with higher and new taxes aimed to increase revenue.

The overall budget impact is neutral to negative for most major sectors except pharma.

The Federal Budget 2019-20 was a negative to neutral event for the banking sector. The government has hinted at the formation of a Single Treasury Account (TSA) under which the government will withdraw all its deposits ($12 billion) from commercial banks.

The corporate tax rate which was supposed to be reduced by 1 percent each year has been frozen at 29 percent for the next 2 years.

HBL (+2.0%), UBL (+0.1%) and MCB (+0.7%) closed in the green zone. Activity was seen in the Cements despite negativity in the budget where FED was increased which Cement manufacturers are not in a position to pass on the additional cost to the consumers, DGKC (+4.2%), FCCL (+4.2%) and MLCF (+4.4%) closed near limit up.

Traded value stood at $34 million, up 15 percent and volume stood at 151 million, up 29 percent.

Furthermore, major contribution to total market volume came from BOP (-2.1%), MLCF (+4.4%), KEL (-0.7%), EPCL (+2.0%), TRG (+5.4%).Maaz Mulla, an equity analyst, expects market to remain choppy and volatile as the things get clearer on the budget front.