| GEO Business|
| Stocks egde up in dull trade; rupee firms|
| Updated at: 1659 PST, Wednesday, June 23, 2010|
KARACHI: Pakistani stocks edged higher in dull trade on Wednesday, and dealers said investors lacked interest in the market in the absence of any major trigger.
The KSE benchmark 100-share index rose 0.34 percent, or 33.07 points, to end at 9,715.39.
Turnover was only 63 million shares, compared with 83.21 million shares traded on Tuesday.
"There was not much interest in the market today, as indicated by the low volumes, and probably the investors are more focused at the moment on closing their books for the fiscal year ending June 30," said Sajid Bhanji, a director at Arif Habib Ltd.
Uncertainty over the implementation of a capital gains tax from July 1 has also discouraged investors, dealers said.
In its budget for the 2010/11 fiscal year, the government announced that a capital gains tax of 10 percent would be imposed on stocks held for six months or less and 7.5 percent on stocks held between 6 months to a year.
Dealers said the government had previously agreed with the exchange that the capital gains tax would be levied only on profits made from the start of the 2010/11 fiscal year on July 1.
But now there are concerns the government may seek to tax gains made before that date and demand quarterly tax returns instead of the annual filing preferred by brokers, they said.
"The proposal which is before the Parliament is that a capital gains tax will be imposed on all stocks sold after July 1, whenever they've been bought," Asif Bajwa, special secretary at the Ministry of Finance, said Tuesday.
In the currency market, the rupee ended firmer at 85.32/37 to the dollar, compared with 85.36/41 on Tuesday.
Dealers said there was sufficient dollar supply in the market for now to meet importer demand.
In the money market, overnight rates fell to 10.0 percent from 11 percent a day earlier, despite an outflow of 25.0 billion rupees after the central bank mopped up funds in a 2-day repo.
Dealers said rates were likely to hold steady this week as the market had enough liquidity to meet the daily needs of banks.