KSE-100 rises over 800 points amid budget buzz
The Pakistan Stock Exchange opened trading on a positive note on Tuesday, as the benchmark KSE-100 Index gained over 800 points during the first trading session of the week following the Eid holidays, with investors eyeing upcoming budget measures to be unveiled later in the day.
At 12:35pm, the benchmark index was hovering at 122,450.11, a gain of 809.11 points or 0.67%.
Buying momentum was observed in key sectors including commercial banks, fertilizer, oil and gas exploration companies, OMCs and refinery. Index-heavy stocks, including PRL, WAFI, MARI, OGDC, POL, HBL, MCB, and MEBL, traded in the green.
The federal government today would present the budget 2025–26 with an estimated size of Rs17.6 trillion in the National Assembly for debate and approval.
Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb would present the federal Budget-2025-26 in the National Assembly. He would also lay the Finance Bill 2024 in the Senate on the same day, as required under Article 73 of the Constitution.
During the previous week, the Pakistan Stock Exchange (PSX) stayed positive, fueled by growing optimism over a potential agreement between Pakistan and the IMF.
The benchmark KSE-100 index rose by 1,950 points or 1.6% to close at 121,641 points on the last trading day of the week compared to 119,691 points at the end of the previous week.
Overall, four trading sessions were held due to the Eid holiday on Friday, June 6, 2025.
Internationally, stocks were buoyant and the dollar remained on guard on Tuesday as trade talks between the United States and China were set to extend to a second day, with tentative signs that tensions between the world's two largest economies could be easing.
US President Donald Trump put a positive spin on the talks at Lancaster House in London, which wrapped up for the night on Monday and were set to resume at 0900 GMT on Tuesday.
Stocks advanced in Asia, extending their rise from the start of the week.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5%, while Nasdaq futures gained 0.62%. S&P 500 futures edged 0.43% higher.
EUROSTOXX 50 futures and FTSE futures both added roughly 0.1% each.
This is an intra-day update
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Business Recorder
an hour ago
- Business Recorder
Rs17.6trn FY26 Budget unveiled under the shadows of IMF conditions, US tariff tensions and war threat
ISLAMABAD: Finance Minister Muhammad Aurangzeb on Tuesday presented the federal budget 2025-26 to the parliament, with a total outlay of Rs17.573 trillion, targeting a GDP growth target of 4.2 percent against 2.7 percent in the outgoing year. Aurangzeb termed the budget the start of a strategy to create a competitive economy and economic productivity to increase exports and fundamentally change the economy's DNA. The government has set inflation target of 7.5 percent for the next fiscal year. Regarding the fiscal deficit, the government projected a target of 3.9 percent of the GDP — or Rs5,037 billion — from the outgoing fiscal year's target of 5.9 percent. The primary surplus is targeted at 2.4 per cent of the GDP against the budgeted 2 percent in the current fiscal year, which has been revised to 2.2 percent. Pakistan's Rs17.6trn budget to be unveiled today The finance minister stated that it was unavoidable to aim for a 14 percent tax-to-GDP ratio and added that achieving the national targets was 'impossible without the transformation of the Federal Board of Revenue (FBR).' The government has set an ambitious tax collection target for the FBR at Rs14,131 billion, an 8.95 percent increase from the current fiscal year of Rs1,2970 billion and 18.7 percent higher than the revised estimate of Rs11,900 billion. Non-tax revenue is estimated to be Rs5,147 billion for the next fiscal year against the budgeted Rs4,845 billion for the current fiscal year. 'We are providing tax relief to those who need it the most, ie, the salaried class,' Aurangzeb said, noting that the government has decided to significantly reduce tax rates in various income tax slabs. Salaries of government employees were proposed to be raised by 10 percent with a seven percent increase in pensions. The Special Conveyance Allowance of 4,000 rupees monthly for special persons will be increased to 6,000 rupees. Further, 30 percent Disparity Reduction Allowance for deserving government employees has been proposed in the budget. The Armed Forces of Pakistan have rendered exemplary services for the defence of the motherland, said the minister, adding that in recognition of their services, it has been proposed to give a Special Relief Allowance to the officers, JCOs and soldiers of the Armed Forces of Pakistan. These expenditures will be met from the allocated Defence Budget of 2025-26. The federal government has proposed a significant increase in the defence budget for the upcoming fiscal year, allocating a total of Rs2,550 billion. 'The spirit with which we protected our national sovereignty, we need to ensure our financial security in the same way,' he maintained. 'Pakistan has now achieved economic stability and is moving towards a Pakistan that is prosperous,' he added. The minister said for the salaried class falling under the Rs600,000-Rs1.2 million annual tax slab, the government has decided to reduce the tax rate from five per cent to one per cent. Tax amount has been reduced to 6,000 rupees from existing 30,000 rupees on the employees getting 1.2 million rupees, whereas, the income tax rate on those earning between Rs1.2 million-Rs2.2 million has been reduced from 15 per cent to 11 per cent. Those earning between Rs2.2 million-Rs3.2 million are proposed to pay 23 per cent income tax as compared to the current 25 per cent,' he said. Further, the government, in a bid to reduce the ongoing 'brain drain', has decided to reduce the surcharge on those earning over Rs10 million by oneper cent. Aurangzeb said that from July onwards, the tax filing process will be simplified. Talking about relief measures to ease taxes on the corporate sector, Aurangzeb said a reduction of 0.5 per cent in the super tax has been proposed for the corporations generating 200 million to 500 million rupees annual income. He said this concession indicates government's resolve to rationalise the ratio of the corporate tax. The minister said withholding tax on purchase of property is being reduced from four per cent to 2.5 per cent and 3.5 per cent to 2.5 per cent as well as three per cent to 1.5 per cent. He said there is proposal to completely abolish the Federal Excise Duty (FED) up to seven per cent on the transfer of commercial properties, plots and houses to lessen burden on the construction sector. To encourage mortgage for the provision of loan on low-cost housing, tax credit is being introduced on houses up to 10 marlas and flats of 2,000 square feet. He said the government would promote mortgage financing and comprehensive mechanism would be introduced in that regard. Aurangzeb said stamp paper duty on purchase of property in Islamabad Capital Territory would be reduced from four per cent to one per cent so that shortage of houses could be addressed. He expressed the confidences that these measures will accelerate the housing sector, enabling it to play its due role in the economic development of the country. The government, in its bid to promote horizontal equity has proposed to raise tax rate on interest income from 15 per cent to 20 per cent. The government has proposed Rs16,286 billion for current expenditure in the budget for fiscal year 2026 budget, a 5.33 per cent decrease from the outgoing fiscal year. Civil administration expenditure would be Rs0.97 trillion, pension expenditure Rs1.06 billion, power and other sectors Rs1.19 billion. He said 971 billion rupees are being allocated for the civil administration expenditures, while 1,055 billion rupees have been reserved for the pension expenditures. He said 1,186 billion rupees are being earmarked for subsidy on electricity and other sectors. Speaking on tax revenues, he said the tax-to-GDP ratio was only 8.8 per cent in June 2024, which was raised to 10.3 per cent in the first nine months of fiscal year 2025, and would reach 10.4 per cent by the end of June. The government's revenue was now at 11.6 per cent, including the provinces' 0.8 per cent contributions. 'The FBR has increased tax-to-GDP ratio by 1.6 per cent, which is historic not just in Pakistan but the world,' he asserted. The government has announced to end the distinction between filers and non-filers. Only individuals who submit a wealth statement will be allowed to carry out major financial transactions. An 18 per cent sales tax will now be imposed on the import of solar panels to promote local manufacturing. The finance minister said it has been proposed to impose 'carbon levy' at the rate of 2.5 rupees per litre on furnace oil, high-speed diesel and petrol with the aim to discourage the use of fossil fuel and ensure availability of financial resources for climate change and Green Energy programmes. He said this levy will be enhanced to five rupees per litre in the fiscal year 2026-27. The budget also envisages enforcement measures under FED. The finance minister said it has been proposed to seize those items having no barcodes or original tax stamps under Track and Trace System. He said enforcement powers are also being delegated under FED to the particular provincial officers in small cities and rural areas in view of limited presence of FBR. He said this step is especially aimed at effectively curbing the smuggling of non-duty paid cigarettes. New taxation measures include a five per cent income tax on annual pensions exceeding 10 million rupees. The tax on cash withdrawals by non-filers has been increased from 0.6 per cent to one per cent. An 18 per cent sales tax will be imposed on small vehicles up to 850cc, aiming to bring uniformity in sales tax on petrol, diesel, and hybrid vehicles. The government plans to take strict measures against unregistered businesses. Bank accounts of such businesses will be frozen, and there will be a ban on property transfers. In severe cases, business premises can be sealed and goods confiscated. However, businesses will have the right to appeal within 30 days. The finance minister proposed that Balochistan and the merged districts in KP, which 'had a leeway with taxes for the past seven years', were now to pay sales tax starting from 10 per cent for five years. However, noting that the agriculture sector was the economy's engine of growth, Aurangzeb said no further tax on fertiliser and pesticides was being mulled. He warned that those committing theft in sales tax would face strict punishments, with the right to appeal. An automated risk-based income tax adjustment would be introduced to prevent the misuse of the income tax system. He said that foreign vendors from countries having no bilateral tax agreements with Pakistan could be taxed. 'A five per cent tax on items from foreign vendors has been proposed.' Petrol, diesel and hybrid cars that were excluded from an 18 per cent sales tax would now be hit with the same tax as well, the minister said. The government has proposed several tax measures in the federal budget for the financial year 2025-26, aiming to increase revenue and bring various sectors into the tax net. One key decision is to impose tax on e-commerce or online businesses and shoppers, bringing online transactions under the tax umbrella. Individuals or companies selling goods or services through online platforms will be subject to 18 per cent tax, and tax will also be applicable on goods and services ordered online. E-commerce businesses will be required to submit detailed data and tax reports of their monthly transactions to relevant authorities. Additionally, the budget proposes a 25 per cent tax on income earned on debt, while the tax rate on profits earned on shares remains unchanged. The federal government has announced plans to expand the Benazir Income Support Programme (BISP) with a proposed 21 per cent increase in allocation, bringing the total to Rs716 billion. As part of this expansion, the Kafaalat program under BISP will be extended to cover 10 million families, providing financial support to more households in need. The classification of all state-owned enterprises (SOEs) under SOE reforms has been finalised. Inefficient SOEs have been costing the government over Rs800 billion annually, and reforms aim to reduce these losses. Privatisation of Pakistan International Airlines (PIA) and the Roosevelt Hotel is scheduled for the next fiscal year, and privatisation efforts for power distribution companies (DISCOs) and generation companies (GENCOs) will continue. The Cabinet has approved downsizing staff in 10 federal ministries, with a total of 45 government entities marked for privatisation or closure, he added. The minister said 390,000 high-value non-filers of tax were identified through data integration, with Rs300m recovered. The minister highlighted that there was a 100pc increase in the number of tax filers, taking the revenues to Rs105 billion. 'For the first time, the IMF has acknowledged Rs389 billion revenues through law enforcement,' he said. The minister said those who were raising alarm about a mini-budget, no such move had been taken by the government. The finance minister said that there was a 31 per cent reduction in electricity prices, as well as 50 per cent reduction in prices for protected consumers. The minister said that the government had made plans to procure cheap energy. Noting the closure of costly power plants and reforms in the oil and gas sector, he said Turkish and other international companies were willing to invest in Pakistan. He mentioned the $5 billion investment pledge by RekoDiq and pointed out fuel price deregulation aimed to promote competition. 'Gold mines in RekoDiq are a key part of our future. The plan's feasibility study was completed in January,' he noted. 'We expect $71 billion in cash flows as well as $7 billion in tax and $8 billion in royalties,' he said, terming the project a 'game changer'. Aurangzeb said additional customs duties will come to an end in four years, regulatory duties will end in five years, Customs Act's Schedule 5 will also be eliminated in five years, and customs duty will be structured in slabs, with the maximum being 15 per cent. 'Tariff reforms will be applied step by step so that businesses can adjust and challenges are reduced. This will apply to all economic areas, including pharma, IT, telecom, textile and engineering.' Aurangzeb said that these instruments would lower the tariffs, bringing them to the same level as Indonesia. The minister said IT exports are projected to reach $25 billion in the next five years. Aurangzeb said that the Small and Medium Enterprise Development Authority had launched a three-year plan for financing small and medium enterprises (SMEs). He said that under the SME risk coverage scheme, 95,000 SMEs had received Rs300 billion in funding till May 2025. He affirmed that the government was taking steps for overseas Pakistanis, including an online system, civil procedure laws to prevent fraud, a quota in chartered medical schools, and civil awards for the top 15 senders. Speaking about the agricultural sector, Aurangzeb said Rs2.64 billion were earned in fiscal year 2024-25, adding that the National Seed Policy 2025 and the National Agri Technology Policy 2025 had been 'nearly approved'. The minister also praised the Strategic Investment and Facilitation Council (SIFC) for taking forward 'strategic Brownfield and Greenfield projects'. 'Inter-provincial and inter-federal connection improved,' he added. Aurangzeb stressed the need for the country to increase its water reservoirs and ensure water security. Under the 2018 National Water Policy, he mentioned the goals of 10m-acre increase in water storage, 35 per cent reduction in water waste and 30 per cent increase in water-use efficiency. He detailed that Rs133 billion would be allocated for projects, Rs34 billion for investment and Rs2 billion for 15 key schemes, detailing the breakdown for various dams. The minister said that the government needed to ensure the provision of cheap energy. He said that 47 schemes and Rs90.2 billion were allocated to the energy sector, including Rs840m for the Tarbela 5th Extension, Rs10.9 billion for the Dasu hydel project, Rs3.5 billion for the 884MW Suki-Kinari Hydropower Project, and Rs35.7 billion for the Mohmand hydel dam. The allocations for other power projects included Rs4.4 billion for the Allama Iqbal Industrial City grid station, Rs1.1bn for the Quaid-i-Azam Business Park, Rs1.6bn for the 100KVA and 200KVA transformers asset performance management system, Rs2.9 billion for the Islamabad Electric Supply Company (IESCO) advanced metering infrastructure, Rs1.8bn for the Multan Electric Power Company (MEPCO), Rs1.9 billion for the Hyderabad, Rs2.4 billion for the Peshawar, Rs67.2bn for the Water and Power Development Authority (Wapda) clean electricity scheme, Rs3bn for five energy schemes of Azad Jammu and Kashmir and Gilgit-Baltistan, and 1.2 billion for GB grids. 'Genetic improvement and post-harvest processes will be focused on,' he said, adding that a total of 1,000 agriculture graduates had been sent to China on government-funded programmes. He also announced five new livestock schemes. Aurangzeb said the Higher Education Commission (HEC) would be receiving Rs39.5 billion for 170 projects, of which, Rs38.5 billion would be set aside for the provinces. Aurangzeb said the a total of 164 billion rupees have been earmarked in the PSDP 2025-26 for the Azad Jammu and Kashmir, Gilgit-Baltistan and merged districts of Khyber-Pakhtunkhwa. Forty-eight billion rupees each has been allocated for Azad Kashmir and Gilgit-Baltistan while sixty-eight billion rupees have been reserved for merged districts of Khyber-Pakhtunkhwa. He further said the federal government has made block allocations of 32 billion rupees for Azad Jammu and Kashmir, 22 billion rupees for Gilgit-Baltistan and 65 billion rupees for merged districts of Khyber-Pakhtunkhwa and 10-year erstwhile FATA plan under the Annual Development Plan. Besides, the federal government has allocated five billion rupees for Azad Jammu and Kashmir and four billion rupees for Gilgit-Baltistan as Prime Minister's Special Package. The minister said that the government has formulated a new Electric Vehicle (EV) Policy aimed at promoting the use of two- and three-wheeled EVs over traditional petrol and diesel-powered vehicles. 'This initiative seeks to reduce environmental pollution while decreasing the country's reliance on imported fossil fuels,' he added. Highlighting the key features of the EV Policy, he said that the policy encourages the manufacturing and sale of electric two- and three-wheelers by introducing a levy on petrol and diesel vehicles. The levy will be applied at varying rates based on engine power, affecting both local sales and imports of fossil fuel-based vehicles. Copyright Business Recorder, 2025
Business Recorder
an hour ago
- Business Recorder
Copper slips on uncertainty over trade talks, demand
LONDON: Copper prices lost ground on Tuesday as many investors shunned the market due to uncertainty about US-China trade talks and how the ongoing trade war between the world's two largest economies will hit economic growth and metals demand. Benchmark three-month copper on the London Metal Exchange was down 0.3% at $9,767 per metric ton in official open-outcry trading, having recovered by 20% since hitting its lowest since November 2023 in April. 'We have a lot of market complacency right now. Volatility seems to be drifting lower across markets even though we have yet to see any breakthrough on trade talks with China,' said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. Top US and Chinese officials will resume trade talks for a second day in London on Tuesday, hoping to secure a breakthrough over export controls for rare earths and other goods. More copper inventories departed from LME-registered warehouses as traders took advantage of higher US prices due to expectations that US President Donald Trump will impose tariffs on the metal, following duties levied on aluminium and steel. LME copper stocks eroded by another 2,000 tons to 120,400, data showed on Tuesday, having tumbled by half over the past three months. US Comex copper futures dropped 0.7% to $4.89 a lb, bringing the premium of Comex over the LME to $1,016 a ton. 'The appetite is failing somewhat, especially in the New York market, because the tariff announcement will be a binary event and some fireworks can probably not be avoided once you get that news out.' Traders are awaiting the outcome of an investigation Trump ordered in February on potential import tariffs on copper. In China, zinc on the Shanghai Futures Exchange softened for a third trading day, losing 1.3% to 21,845 yuan a ton, the lowest since late April. 'China's domestic demand has shown signs of weakening recently, and buyers have been procuring to meet their immediate needs at lower prices,' Shanghai-based commodity market research house SHMET said. Among other LME metals, aluminium eased 0.1% to $2,476 a metric ton, nickel ceded 0.9% to $15,280, zinc was little changed at $2,649, lead fell 0.2% to $1,982, while tin edged up 0.1% to $32,730.
Business Recorder
an hour ago
- Business Recorder
PSX hits record high
KARACHI: The Pakistan Stock Exchange (PSX) closed at a new record high on Tuesday, driven by investor optimism ahead of the upcoming budget. However, trading activity declined sharply as market participants remained cautious, resulting in significantly lower volumes and values. Despite slow trading activity, the benchmark KSE-100 Index settled comfortably above the 122,000 mark. The KSE-100 Index climbed by 383.44 points, or 0.32 percent, to settle at 122,024.44 points on Tuesday compared to 121,641 points on Monday. The index fluctuated within a narrow band amid uncertainty surrounding the budget announcement. The index touched an intraday high of 122,611.53 points and a low of 121,590 points. On Tuesday, BRIndex100 closed at 13,079.70 which was 45.45 points or 0.35 percent higher than the previous close. Total volume was 481.593 million. Meanwhile, BRIndex30 lost 70.24 points or 0.18 percent and ended at 37,957.57 points with the total volume remaining 298.193 million. Investors exercised caution during Tuesday's session, adopting a 'wait-and-see' approach ahead of the federal budget announcement scheduled for later in the day, an analyst at Darson Securities noted. This cautious sentiment translated into a significant slowdown in market activity compared to the previous day. The ready market turnover fell to 592.95 million shares from 854.617 million shares the day before. Similarly, the traded value dropped to Rs 21.82 billion from Rs 25.79 billion. However, despite the lower volume and value, total market capitalization rose by Rs 40 billion, reaching Rs 14.768 trillion from Rs 14.728 trillion. Cnergyico PK led the volume charts with 61.37 million shares traded; its stock closed at Rs 8.03. K-Electric Ltd. was the second most active stock, with 59.08 million shares changing hands, though its price fell and closed at Rs 5.62. Dewan Cement also saw heavy trading with 45.55 million shares, closing significantly higher at Rs 15.52. The day's top gainer was Sapphire Fibres Limited, whose value surged by Rs 96.67 to close at Rs 1,152.79. Sapphire Textile Mills Limited also saw a substantial increase of Rs 43.08, closing at Rs. 1,143.08. On the losing side, PIA Holding Company LimitedB was the biggest decliner, with its price dropping by Rs 2,879.00 to close at PKR 25,910.98. Khyber Textile Mills Limited also experienced a significant fall of Rs 273.52, ending the day at Rs 2,461.65. Out of 473 total active companies, 230 saw their share prices increase, 200 registered declines, and 43 remained unchanged. Meanwhile, BR Automobile Assembler Index closed at 21,149.85 with a net positive change of 134.49 points or 0.64 percent with a total turnover of 5.627 million. BR Cement Index gained 16.34 points or 0.16 percent and ended at 10,258.58 points. BR Commercial Banks Index closed at 36,503.30 with a net positive change of 285.32 points or a 0.79 percent on 56.082 million shares. BR Power Generation and Distribution Index ended at 21,643.76 points with a net positive change of 189.07 or 0.88 percent and a total turnover of 63.67 million shares. BR Oil and Gas Index closed at 11,516.48 with a net negative change of 25.75 points or 0.22 percent and a total turnover of 18.864 million. While BR Tech. & Comm. Index finished at 2,986.40 with a net negative change of 16.41 points or 0.55 percent, with a total turnover of 41.184 million shares. Topline sales desk cited that the stock market witnessed a range-bound session on Tuesday, with the index fluctuating within a narrow band amid uncertainty surrounding the budget announcement. The positive momentum was largely supported by strong performances from FFC, PKGP, BAHL, MEBL, and BAFL, which collectively contributed 499 points to the index. Copyright Business Recorder, 2025
