Karachi - Pakistan's stock brokers and government were
negotiating on various market stabilization measures, including
freezing prices at current levels till the turbulent political
situation improves, traders said on Wednesday.
In an emergency meeting the board of directors of Karachi Stock
Exchange decided to impose a cap at 9,000 points in the benchmark
KSE-100 Index, which has so far lost over 45 per cent since January,
including 12 per cent in just one week.
But their decision was soon rebuked by state corporate watchdog,
the Securities Exchange Commission of Pakistan (SECP), citing it as
'too artificial', market sources said.
Sources said a final decision would be taken late night or on
Thursday morning before the opening of the market, otherwise, some
top brokers had threatened that if the SECP failed to adopt any
measures then the Karachi bourse would go on a strike.
The KSE directors were trying to have an urgent meeting with
Finance Minister Naveed Qamar but sources said he was not avilable.
'We expect a decision from him anytime late tonight or in the
morning,' said Saad bin Ahmed, head of research at Capital One
Equities.
Another suggestion to halt continued slide is to impose a one per
cent cap on the downfall, something which was also practiced couple
of months back for around 30 days.
The hotly contested Sep 6 presidential election, following this
week's breakup of parliamentary coalition, is also creating panic in
the market over political instability.
The Pakistan Peoples Party, which leads the government, has
nominated its leader Asif Ali Zardari, the widower of slain Benazir
Bhutto, for president.
Zardari's past is tainted with scandals of murders and corruption
involving billions of rupees, and it hangs like a dark cloud over the
confidence of many investors.
'If Zardari becomes the president it will be hard for anyone to
consider Pakistan as a safe place for investment,' said one leading
broker, who requested anonymity.
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