Karachi: The KSE-100 Index experienced a significant decline, dropping 1,140 points to close at 162,164, with a trading volume of 1,005 million shares. The market saw notable performances from stocks like AIRLINK, ILP, and SEARL, while PKGS, KTML, and ISL were among the top decliners. Trading activity was largely concentrated in the technology, power, and banking sectors.
Meanwhile, on the diplomatic front, Pakistan's negotiations with a neighboring country ended without an agreement after three days of talks. The country is also considering contributing troops to a potential Gaza force. In a positive development, Prime Minister Imran Khan and Saudi Crown Prince Mohammed bin Salman agreed to enhance trade and investment ties.
The International Monetary Fund (IMF) is expected to approve a USD 1.2 billion tranche for Pakistan by December. Despite the ongoing impact of recent floods, the finance ministry projects inflation to remain steady between 5-6 percent in October. The State Bank of Pakistan (SBP) has decided to maintain the interest rate at 11 percent.
The government has reported a rare budget surplus of Rs 1.5 trillion, despite challenges from floods and border tensions. However, business leaders have criticized the SBP's decision as being detrimental to economic growth. September saw an increase in inward remittances, although foreign direct investment declined compared to the previous year.
In efforts to boost trade, Pakistan aims to double its trade volume with the United Arab Emirates to $20 billion. A $2 billion loan is expected to expedite the Karachi-Rohri rail line project. In the energy sector, oil prices dropped as OPEC announced plans to increase output.
The food sector faces growing debt, now exceeding Rs 325 billion, as arrears continue to accumulate nationwide. Additionally, a significant portion of tax filers have declared zero income to the Federal Board of Revenue (FBR). The SBP's foreign exchange reserves are projected to rise to $17.8 billion by June next year.
In response to industry concerns, the textile sector is seeking a rebate system similar to the Duty Drawback of Local Taxes and Levies (DLTL). Starting November 1, no cement bags will be cleared without a tax stamp, as mandated by the FBR.
The government has praised the National Electric Power Regulatory Authority (Nepra)'s decision to lower K-Electric's tariff, stating it will alleviate the financial burden on taxpayers.