Geo Business

Selling at KSE takes away195 points

KARACHI: Bears gripped the local equities at Karachi Stock Exchange (KSE) where the 100-share Index ended almost 1.6 percent lower on Monday, led by selling of Engro Corporation amid uncertainty over the nation's gas supply, dealers said. There are risks with regards to gas supply from Sui Northern Gas for Engro's new plant worth $1 billion, the world's largest single-train urea ammonia plant. "Uncertainty of gas supply to Engro $1 billion plant forced institutional investors to trim their positions in the company," said Samar Iqbal, a dealer at Topline Securities Ltd. The Karachi Stock Exchange's benchmark 100-share index ended 1.58 percent, or 195.33 points, lower at 12,165.98. Turnover was only 51 million shares, compared with 47.67million shares traded on Friday. Daily turnover is usually on average around 100 million shares. Dealers said there was lack of interest in the market because of the continued implementation of a capital gains tax. The government confounded market expectations earlier this month by not removing the capital gains tax on certain investments in the 2011/12 budget, announced on June 3. A 10 percent capital gains tax is imposed on stocks held for six months or less, and a 7.5 percent tax is levied on stock sheld between 6 months to a year. Engro ended 4.99 percent lower at 168.90 rupees, while Sui Northern shed 4.98 percent to close at 21.20 rupees. (Reuters)