Pakistan stocks up by about 5 per cent on tax delay

KARACHI - Pakistan stocks staged a massive rebounce Wednesday, gaining around 5 per cent on reports that government is likely to delay taxes on stock trading for at least next two years, traders said.
The key KSE-100 Index shot up by 4.8 per cent, breaching the major psychological barrier to close at 13,089 points against Tuesday's 12,479.
"The delay in the Capital Gains Tax was the prime factor in pulling up stocks today," said Munir Ladha, a director at Karachi Stock Exchange.
Ladha said the market was in a very positive mood and would see gains in coming three months, if political conditions remained stable.
Earlier, there were reports that the government was planning to levy a 15 to 20 per cent tax on stock trading in the upcoming budget for fiscal 2008-09 that begins in July.
The Karachi bourse saw a loss of over 1,500 points during the last two weeks of May due to interest rate hike by the central State Bank of Pakistan amid political uncertainty over rumours of resignation by embattled President Pervez Musharraf.
"The market is quite attractive for foreign investors right now," said Saad Ahmed, head of research at Capital One Equities.