New tax fear mars stock trade

Investors, especially, in the short-term stock market have gone on sidelines in the wake of change of top face in the countrys Finance Ministry as the local bourses remained under selling pressure throughout the week ended on Friday last.
Market opened the week under review on a positive note and bagged net gain of two-thirds a percentile on Monday last chiefly due to the foreign fund managers renewed interest in local equities. Although the market bettered after fresh buying by both the foreign investors and local heavyweight players, the undertone of the trade still remained bearish. Volumes of trade were not growing indicating a wait and see approach on part of the majority of players in the bourses.
Highly vulnerable market with squeezing volumes of trade failed to maintain the gaining momentum and bears made their way back during the following session of the week that was. Apparently, the brokers said, the market sentiment was down out of fears of the new taxes to be levied on the stock trade from the beginning of the next financial year on July 1, 2010.
The bearish trend emanating out of the fears for taxation, perpetuated through rest of the week under review for uncertainty on the external both political and economic fronts. The fragile economy struggling to recover its growth rate while the pioneering driver of reforms as well as recovery Shaukat Tarin has already resigned leaving it in a lurch.
The Government is practically in a fix over departure of Tarin as it, so far, has failed to find an adequate replacement. According to well-placed sources, the International Monetary Funds favourite Hafeez Pasha has declined to accept the offer to be the Finance Minister due to his personal reasons. At the same time President Asif Ali Zardaris favourite Naseem Baig has also, reportedly, refused to be the next Finance Minister of the country due to his medical conditions. More than his medical conditions, the sources added, he is not willing to accept this highly critical position in the Cabinet after his direct linkage with the President is exposed.
Now the sources were of the view that the PPP regime was, once again, at the partys typical dilemma of lacking a competent Finance Minister. Only option left, they added, with the Government was to make stopgap arrangements by assigning the portfolio of Finance to one of the two existing cabinet members, Mukhdoom Sahabuddin and Syed Naveed Qamar.
However, the market exhibited some resilience towards end of the week under review. Short covering in blue chip stocks before the weekend attracted some buying and the market managed to clip its losses. Still they were unable to foresee a clear direction of the market in the near future chiefly due to the uncertainty on the economic front wherein a new face is to takeover as Finance Minister most probably in the following week starting Monday (today). Moreover the prevalent ambiguity on the political front was also to mar the sentiment of stock trade, the maintained.