KSE recovers following SECP’s relaxation in accounting treatment: The News

By By Salman Siddiqui
KARACHI: Relaxation from market regulators on ‘accounting standards’ in accordance with the local demand helped the Karachi bourse bounce back on Friday.

KSE 100-share index posted a notable recovery of 226.54 points or 4.20 per cent and closed at 5,625.90 points. Its junior partner, the 30-share index, rose by 283.26 points or 5.25 per cent and concluded at 5,681.89 points.

Analysts said the notifications from the Securities & Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP) to allow companies listed at the local bourses to show impairment-losses on bourses in ‘equity held for sale’ instead of showing them in ‘net profit & loss accounts’ for one year period revived positive sentiments.

The notification helped turn the stock market indicators into positive, as the day turnover, positive closing stocks, market capitalisation and indices-points; all turned higher. Trading activity jumped up by 81 per cent to 162.430 million shares on the ready market as compared to 89.798 million shares changed hands a day earlier. However, no activity was seen in the future market as usual. The overall market capitalisation increased by Rs66 billion and stands at Rs1,766 billion as compared to Rs1,700 billion yesterday. Moreover, out of total 267 actives, the number of positive closing companies stands at 203 against 43 fell in red regions, while the value of 21 stocks closed unchanged.

Ahsan Mehanti at Shahzad Chamdia Securities said intense buying was witnessed following the SECP relaxed treatment for impairment of capital losses & its direct change to equity instead of profit & loss account. Investors sentiment remained positive throughout the trading session as the improved profitability is likely to be witnessed after amendment made by the SECP, he added.

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