PSX gains over 300 points on expectations of ‘investor-friendly budget’

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index opened in the green on Monday and gained more than 300 points on expectations of an “investor-friendly budget” for the fiscal year of 2024, which will be presented on June 9. According to the PSX website, the index closed at 41,340.06 points, up 0.92 per cent or 375.52 points. “The market rose on expectations of an investor-friendly budget, especially measures related to tax on reserves that may force listed firms to pay more to shareholders,” Topline Securities CEO Mohammed Sohail told Dawn.com. Last week, Dawn reported that a dozen and a half companies listed on the PSX said they were going to hold board meetings for reasons other than financial results in the coming days. Their apparent objective was to prevent the possible expense arising out of an advance tax that the government may impose in the 2023-24 budget on their reserves, which are retained profits from past years. Board meetings will help the companies shield themselves from the likely advance tax through the declaration of one-time, heavy pay-outs to shareholders or an increase in authorised share capital to create space for the issuance of bonus shares. Bonus shares aren’t taxed, unlike cash dividends that attract a 15pc tax.