A mixed bag for stock market

The net impact of the 2023-24 budget is expected to range between neutral and negative for most listed companies, even though a few sectors like technology, real estate and pharmaceutical may find some cause for celebration. Speaking to Dawn, Ismail Iqbal Securities Head of Equity Research Fahad Rauf said the budget contains few significant events for the stock market based on the information available so far. “The IMF programme is the key here. Going by the speech of the finance minister, I don’t think there’s any major deviation from what the IMF wants us to do,” he said. No tax on reserves The stock market saw a lot of activity in the run-up to the budget because of a rumour that the government would impose an advance tax on companies’ reserves, which are retained profits from past years. Speculations that companies would have to pay an adjustable tax of 5-7.5 per cent on their retained earnings fuelled a spree of board meetings by listed companies. Firms rushed to shield themselves from the likely advance tax by declaring one-time, heavy pay-outs to shareholders in the form of either cash dividends or bonus shares. A larger number of companies resorted to declaring bonus shares as the same aren’t currently taxed, unlike cash dividends that attract a 15pc tax.