Karachi  -  Pakistan's main Karachi Stock Exchange shed 1 per cent on Wednesday as corporate investors dumped their holdings due to reports of the imposition of a capital gains tax in the upcoming fiscal year, analysts said.

The new fiscal year 2008-09 will start from July 1. The key KSE-100 index lost 195 points to close at 15,122 as against 15,317 Tuesday.

"Many companies are off-loading their holdings from other companies in order to gain advantage of avoiding the capital gains tax before the end of the current fiscal year," said Zohair Abbasi at Capital One Equities.

Abbasi said companies had already started notifying the market in this regard.

On Wednesday, BOL Pakistan Limited announced dumping 3.3 million shares of Attock Petroleum Limited (APL), as Abbasi said many more companies would also be announcing their selling schedule soon.

A senior official of Pakistan's corporate watchdog, the Securities Exchange Commission of Pakistan (SECP), on Wednesday hinted that the upcoming fiscal year would see a capital gains tax (CGT) of anywhere between 5 and 8 per cent.

But trader Hasnain Asghar at brokerage house Aziz Fidahussain Securities, quoting market rumours, said the CGT could eventually be increased to 15 per cent.

Meanwhile, the trading volume was also substantially down to 160 million shares against 224 million on Tuesday as investors were scared of buying at current levels, fearing further declines.

The KSE-100 Index has so far lost around 5 per cent during the last 15 days of trading on political instability, weak economic fundamentals and the imposition of new taxes. (dpa)