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Monday, 17 June, 2002, 11:57 GMT 12:57 UK
Investors ignore Pakistan budget
Karachi Stock Exchange trader
War threats and terror attacks have distracted traders
Pakistan's stock market failed to cheer the country's budget on Monday, even though it included a range of measures that set out to help companies and attract investors.

Investors' attention has been diverted by recent terror attacks and by the continued military tension with India.

"Its positive in the long term but in the short-term one can say investors are cautious about the geo-political situation in the region," said Saad Hashmey, Research Head at IP Securities.

Over time, the budget, which was passed over the weekend, should have a positive impact, said industry officials.

"It will help to lure investors into the stock market and it will create depth in the market in the long term," said Karachi Stock Exchange chairman Saleem Chamdia.

Aim to please

"It's a positive, investor-friendly budget which contains positive measures for specific sectors and nothing adversely affecting any company or sector," Mr Hashmey said.

The budget included moves to:

  • halve withholding tax on brokerages to 5%
  • introduce equal withholding tax exemptions on dividends for state-run and private sector mutual funds
  • cut corporate tax for banks by 3% per year until it reaches 35% in five years
  • cut corporate tax for companies by 2% per year until it reaches 35%

"These measures are basically aimed at improving the working of the corporate sector," Mr Hashmey said.

The KSE index of leading Pakistani shares had risen 0.43% by 0700 GMT on Monday.

So far this year, the index has gained almost 40%.

See also:

14 Jun 02 | Business
10 Jun 02 | Business
22 Apr 02 | Business
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