Pakistan shares close at record high after budget dispels concern over capital gains tax hike

A car drives past the building of Pakistan Stock Exchange in Karachi, Pakistan on Novemeber 30, 2023. (AN photo/File)
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Updated 13 June 2024
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Pakistan shares close at record high after budget dispels concern over capital gains tax hike

  • Benchmark share index closed up 4.9 percent at 76,338 points after presentation of budget, which looks to raise tax revenue of $47 billion
  • Budget aims to strengthen case for new IMF bailout deal, as Pakistan seeks estimated loan ranging from $6 billion to $8 billion

ISLAMABAD: Pakistan’s benchmark share index made its biggest single-day gain in nearly a year to close at a record high, a day after the government unveiled a budget that cheered investors by avoiding an anticipated increase in capital gains tax, despite an ambitious tax revenue target.

The benchmark share index closed up 4.9 percent at 76,338 points after the presentation of the budget, which looks to raise tax revenue of 13 trillion rupees ($47 billion) for the year starting July 1, up nearly 40 percent from the current year.

“The market was expecting an increase in capital gains tax and so investors had reduced exposure significantly,” said Adnan Sheikh, assistant vice president of Pak Kuwait Investment Co.

A record day was expected following the budget and Monday’s cut of 150 bps in the central bank’s policy rate, as “equities are the best option for the medium term,” said Sheikh.

Pakistan’s international sovereign bonds also rallied with longer-dated maturities seeing the largest gains. The 2036 bond added 1.4 cents — its biggest gain in more than two months — to be bid at just over 77 cents in the dollar, Tradeweb data showed. .

Following a post budget press conference on Thursday, Finance Minister Muhammad Aurangzeb told Reuters that Islamabad plans to raise up to $1 billion through international bonds in the 2025/26 fiscal year, adding that up to $300 million will be raised through Chinese markets.

Apart from the capital gains tax, analysts say the budget and other revenue measures were in line with expectations.

The budget aims to strengthen the case for a new bailout deal from the International Monetary Fund (IMF), as Pakistan seeks an estimated loan ranging from $6 billion to $8 billion, to avert default in an economy growing at the region’s slowest pace.

“We believe this budget will serve as prior action for a new IMF program,” Topline Securities said in a note.

Topline said that if parliament passes the budget in compliance with IMF measures, it expected a forward price to earnings ratio of 6.93 in three years time, for a historic high, from 3.4 now.

Defending the decision to boost tax revenue, Aurangzeb said the present tax-to-GDP ratio of a little under 10 percent was not sustainable.

Key objectives for the upcoming fiscal year include efforts to increase the ratio gradually to 13 percent in the next three years, Aurangzeb told a press conference after presenting the budget in parliament.


Hundreds of Afghans detained in Pakistan, says Afghanistan embassy

Updated 5 sec ago
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Hundreds of Afghans detained in Pakistan, says Afghanistan embassy

  • Islamabad has cracked down on undocumented Afghans since 2023 as tensions with Kabul increased
  • Pakistan says its deportation campaign is a bid to improve security after a rise in militancy since 2022

ISLAMABAD: Afghanistan’s embassy in Pakistan said around 800 Afghans living in the capital have been detained by authorities, including some who are registered with the UN’s refugee agency.
It warned in a statement late on Monday that uncertainty around the visa process for Afghans in Pakistan has caused “troubling cases of arbitrary detention and deportation.”
Islamabad has cracked down on undocumented Afghans as political tensions with Kabul have increased, forcing more than 780,000 Afghans back across the border since the end of 2023 — including some who have lived in Pakistan for decades.
“The Embassy of Afghanistan expresses its deep concern over the recent detention of approximately 800 Afghan nationals in Islamabad,” it said on social media platform X.
“This has caused the tragic separation of families, including women and children, many of whom remain stranded in Pakistan.”
The statement said the number included 137 Afghans with pending visa extension requests or who are temporarily registered with the UNHCR, the UN’s refugee agency.
The embassy was “alarmed by reports of unwarranted arrests, home searches, and extortion targeting Afghan nationals,” it said.
Pakistan’s Foreign Ministry has not responded to requests for comment.
More than 600,000 Afghans have fled to Pakistan since the Afghan Taliban regained control of Kabul in August 2021, including tens of thousands on the advice of Western nations with the promise of relocation.
Many are forced by embassies to wait for months in guest houses in Islamabad while their cases are processed and have reported a rise in harassment by police in recent weeks.
The Pakistan government said its deportation campaign is a bid to improve security after a rise in militancy in the border regions.
But Afghans say they are being targeted because of a political falling-out between Islamabad and Kabul.
“The Afghans in Pakistan awaiting immigration are going through so much pain,” Umer Ijaz Gilani, a lawyer who represents Afghans, told AFP.
Millions of Afghans have fled into Pakistan to escape successive conflicts over decades, becoming deeply ingrained in Pakistani society.
According to the UNHCR, Pakistan currently hosts some 1.5 million Afghan refugees and asylum-seekers, alongside more than 1.5 million Afghans of different legal statuses.
Pakistan has given a series of short-term extensions to Afghans with registered refugee status, currently due to expire in June 2025.


Pakistan says no human metapneumovirus case reported so far, monitoring flights from China

Updated 7 min 53 sec ago
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Pakistan says no human metapneumovirus case reported so far, monitoring flights from China

  • Human metapneumovirus, or HMPV, is a respiratory virus causing cold-like symptoms such as cough, fever and congestion
  • China has experienced a significant outbreak of the virus since last month resulting in overwhelmed medical facilities

ISLAMABAD: Pakistan’s health ministry has said the South Asian country has not reported any case of human metapneumovirus (HMPV) so far, but it is monitoring all flights from China that has reported a significant number of cases in recent weeks.
HMPV is a respiratory virus causing symptoms similar to the common cold, such as cough, fever, nasal congestion, and shortness of breath. While it often leads to mild illness, young children, elderly and individuals with weak immune systems are at higher risk of severe complications.
Discovered in 2001 by Dutch researchers, HMPV spreads through close contact with infected individuals, exposure to respiratory droplets from coughing or sneezing, and touching contaminated surfaces like doorknobs or toys. In the United States, it’s more prevalent during winter and spring months.
China has experienced a significant outbreak of HMPV since last month resulting in overwhelmed hospitals, particularly in its Hunan province and surrounding areas, with videos shared online showing packed medical facilities reminiscent of the early days of the COVID-19 pandemic.
“Currently, no [HMPV] cases have been reported in Pakistan, but the Ministry of Health is closely monitoring the situation,” Dr. Nadya Jamil, the ministry’s focal person on HMPV, told Arab News on Monday.
“All flights arriving from China are under observation and authorities have instructed that any passenger exhibiting flu-like symptoms be tested and provided with appropriate care.”
The official said monitoring desks at airports, which were already screening passengers for monkeypox (Mpox), had now been tasked with screening for HMPV as well. She, however, said that HMPV was not new to Pakistan, with studies conducted on it as early as 2015.
“The virus can cause pneumonia in children under 14, the elderly, and individuals with weakened immune systems,” Jamil said.
While infectious disease experts have urged caution regarding HMPV, they emphasize that it does not pose a threat on the scale of COVID-19.
Dr. Shobha Luxmi, an infectious diseases specialist at Aga Khan University in Karachi, said HMPV is a respiratory tract illness and usually its cases occur worldwide every year, but in small numbers.
“Since it is now being reported in large numbers in China, it is likely to eventually reach Pakistan, potentially in higher-than-usual numbers,” she told Arab News.
“So, the public should follow the same measures recommended during COVID-19, such as maintaining hygiene, wearing masks, and practicing social distancing.”
HMPV could be isolated through testing, and the disease itself was not “generally severe” and should not have been a “major concern,” according to Dr. Luxmi.
“It is not considered highly dangerous as the fatality rate is relatively low,” she said. “The government should issue public service messages to encourage people to wear masks and also increase screening at the airports to prevent its spread in Pakistan.”
Dr. Javed Usman, a health expert, told Arab News that HMPV could not be detected without a PCR (polymerase chain reaction) test.
“The virus itself isn’t life-threatening, but it can cause pneumonia and other respiratory issues, particularly in children, elderly, and those with weakened immune systems,” he said.
“This is why vigilance and preventive measures are crucial, even if the virus doesn’t present the same level of danger as COVID-19.”


Pakistan PM says UAE has agreed to extend $2 billion debt due this month

Updated 07 January 2025
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Pakistan PM says UAE has agreed to extend $2 billion debt due this month

  • Shehbaz Sharif met UAE President Sheikh Mohamed bin Zayed Al-Nahyan in southern Punjab on Sunday
  • UAE is Pakistan’s third-largest trading partner and a major source of foreign investment for Islamabad

ISLAMABAD: Prime Minister Shehbaz Sharif told the federal cabinet on Tuesday that the United Arab Emirates (UAE) has agreed to roll over $2 billion in debt for Pakistan due this month, days after he held a one-on-one meeting with the Gulf country’s President Sheikh Mohamed bin Zayed Al-Nahyan.
Sharif met the UAE president in Pakistan’s Rahim Yar Khan city on Sunday where they discussed a wide range of issues such as economic collaboration, regional stability, climate change, and the promotion of mutual interests on the global stage, Sharif’s office had said. 
The UAE has rolled over its $2 billion deposits with Pakistan’s central bank since 2023, helping the South Asian country shore up its foreign exchange reserves, strengthen its currency and secure financial bailouts from the International Monetary Fund (IMF). 
Speaking to members of his cabinet, Sharif told them that during his one-on-one meeting with the UAE president, Al-Nayhan told him that Pakistan’s payment of the $2 billion loan was due in January. 
“So, he said we [UAE] are happy that we are extending it,” Sharif said. “He proposed it himself and I thanked him.”
The Pakistani premier said he had requested Deputy Prime Minister Ishaq Dar to proceed with the UAE in this regard so that Islamabad can “take forward our matters related to investment with them.”
He said the UAE president had also spoken to him about enhancing bilateral ties and investment-related matters between the two countries. 
The UAE is Pakistan’s third-largest trading partner after China and the United States (US), and a major source of foreign investment, valued at over $10 billion in the last 20 years, according to the UAE foreign ministry. 
It is also home to more than a million Pakistani expatriates. Policymakers in Pakistan consider the UAE an optimal export destination due to its geographical proximity, which minimizes transportation and freight costs while facilitating commercial transactions.
In January last year, Pakistan and the UAE signed multiple agreements worth more than $3 billion for cooperation in railways, economic zones and infrastructure, a Pakistani official said, amid Pakistani caretaker prime minister Anwaar-ul-Haq Kakar’s visit to Davos, Switzerland to attend 54th summit of the World Economic Forum (WEF).


Pakistan expresses condolences as powerful Tibet earthquake kills at least 95

Updated 15 min 41 sec ago
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Pakistan expresses condolences as powerful Tibet earthquake kills at least 95

  • Magnitude 6.8 earthquake strikes near one of Tibet’s holiest cities, injuring at least 130
  • Southwestern parts of China, Nepal and northern India are frequently hit by earthquakes

ISLAMABAD: Pakistan expressed condolences to China on Tuesday after a magnitude 6.8 earthquake rocked the northern foothills of the Himalayas near one of Tibet’s holiest cities, killing at least 95 people and injuring 130. 
The earthquake struck at 9:05 a.m. (0105 GMT), with its epicenter located in Tingri, a rural Chinese county at a depth of 10 km (6.2 miles), according to the China Earthquake Networks Center. The US Geological Service put the quake’s magnitude at 7.1.
At least 95 people had been killed and 130 injured on the Tibetan side, China’s state-run news agency Xinhua reported, as rescue operations continue. 
“Pakistan expresses heartfelt condolences over the tragic loss of lives caused by the earthquake in Xizang,” the Ministry of Foreign Affairs (MoFA) said in a statement. “We extend our support to the people and government of China in their relief efforts.”

In this photo released by Xinhua News Agency, people stand amidst damaged houses in the aftermath of an earthquake in Tonglai Village, Changsuo Township of Dingri in Xigaze, southwestern China’s Tibet Autonomous Region on January 7, 2025. (Xinhua via AP)

The foreign office said Pakistan’s thoughts were with the persons who were injured or reported missing due to the earthquake.
“We also extend best wishes for the ongoing rescue operations,” it said. 
Southwestern parts of China, Nepal and northern India are frequently hit by earthquakes caused by the collision of the Indian and Eurasian tectonic plates.
A magnitude 7.8 tremor struck near Katmandu in 2015, killing about 9,000 people and injuring thousands in Nepal’s worst ever earthquake. Among the dead were at least 18 people killed at the Mount Everest base camp when it was smashed by an avalanche.
With additional input from Reuters


Pakistan’s star batter Saim Ayub departs for London for urgent treatment

Updated 07 January 2025
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Pakistan’s star batter Saim Ayub departs for London for urgent treatment

  • Ayub suffered fracture in his right ankle last week while fielding against South Africa
  • Pakistan are scheduled to face New Zealand in Champions Trophy opener on Feb. 19

ISLAMABAD: Star left-handed opening batter Saim Ayub has departed for London from Cape Town for urgent medical treatment, the Pakistan Cricket Board (PCB) said on Tuesday, as Pakistan races to get him fit ahead of the Champions Trophy 2025 tournament scheduled to kick off in February. 
Ayub suffered a right ankle fracture while fielding in the second Test against South Africa at Newlands last week, with the injury ruling him out of competitive cricket for six weeks. 
PCB Chairman Mohsin Naqvi announced on Monday that the board will send Ayub to London for medical treatment, hoping that he can be fit in time for the multi-nation Champions Trophy tournament scheduled to begin in February. 
“Ayub and Assistant Coach Azhar Mahmood depart from Cape Town to London,” the PCB said. “On the instructions of PCB Chairman Mohsin Naqvi, expert sports orthopedic doctors from England will check on Ayub tomorrow.”
It quoted Naqvi as saying that Ayub was a “valuable asset” for Pakistan cricket and that “all resources will be provided” for his treatment.
“I pray for Ayub’s full recovery,” he said. “I am in constant touch with the doctors regarding Ayub’s health.”
Ayub has cemented his place in Pakistan’s white-ball squad over the past few months. He was instrumental in Pakistan’s 3-0 whitewash over South Africa in the recently concluded ODI series last month. Ayub scored two ODI centuries in the three matches, winning Player of the Series award for his stellar contributions. 
Pakistan will play the Champions Trophy tournament opener on Feb. 19 against New Zealand in the eastern city of Lahore.