The market capitalization of the Pakistani stock market has grown by about $4 billion since November thanks to several positive developments
In less than four months, the market capitalization of the Karachi Stock Exchange (KSE) has surged from US $34 billion in October, to US $38 billion as of January 12, said Ahmed Nabil, chief investment adviser of the Pak-Oman Asset Management Company.
“Foreign investors’ continued interest in making investment in Pakistani stock market, release of $633m worth coalition support fund by the United States, IMF’s decision to extend deadline of levying the Reformed General Sales Tax (RGST) and impressive growth in remittances supported growth (of the) market and encouraged new investment,” Nabil said.
The market has recorded $70m in foreign investment since November that encouraged local investment at the bourse, improved its market capitalization and value of blue chip instruments, he said.
In Pakistan local investors usually follow foreign investment in the stock market, Nabil added.
The government has deferred the enforcement of the RGST after opposition parties came out strongly against it. But the tax will be enforced in July to increase the tax-to-GDP ratio, government revenues and to promote better documentation of sales and purchases, he said.
About 9% of Pakistan's GDP comes from tax revenues, well below the international standard of 15%. The IMF had sought to have Pakistan impose the RGST as of January 1, but has agreed to its postponement to July. Both the tax ratio and RGST are conditions for loans to Pakistan.
In less than four months, the market capitalization of the Karachi Stock Exchange (KSE) has surged from US $34 billion in October, to US $38 billion as of January 12, said Ahmed Nabil, chief investment adviser of the Pak-Oman Asset Management Company.
“Foreign investors’ continued interest in making investment in Pakistani stock market, release of $633m worth coalition support fund by the United States, IMF’s decision to extend deadline of levying the Reformed General Sales Tax (RGST) and impressive growth in remittances supported growth (of the) market and encouraged new investment,” Nabil said.
The market has recorded $70m in foreign investment since November that encouraged local investment at the bourse, improved its market capitalization and value of blue chip instruments, he said.
In Pakistan local investors usually follow foreign investment in the stock market, Nabil added.
The government has deferred the enforcement of the RGST after opposition parties came out strongly against it. But the tax will be enforced in July to increase the tax-to-GDP ratio, government revenues and to promote better documentation of sales and purchases, he said.
About 9% of Pakistan's GDP comes from tax revenues, well below the international standard of 15%. The IMF had sought to have Pakistan impose the RGST as of January 1, but has agreed to its postponement to July. Both the tax ratio and RGST are conditions for loans to Pakistan.
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