KSE index freeze stays

[Naveed Yaseen]

KARACHI: The floor price mechanism for equities on Karachi bourse will remain in tact for the time being, the KSE Board of Directors said Thursday.

The Board of Directors of Karachi Stock Exchange (KSE), in a scheduled meeting held here on Thursday, announced no date for the removal of floor, but said it would be done sometime in October.

A KSE press statement issued following the Board meeting says: “It has been in discussion with a wide range of stakeholders on a comprehensive roadmap to enable the market to return to normal trading parameters.

Recent events in the global equity markets have further highlighted the need to develop an integrated package so that the Pakistani capital markets can operate in a stable manner. In this context, key discussions are going on with the Ministry of Finance, Economic Advisory Council and Securities & Exchange Commission of Pakistan.

“The final outcome of these discussions will be reached shortly after Eid. All stakeholders including KSE would like the market to return to normal trading parameters at the earliest and Board expects this to happen within the month of October 2008,” statement added.

This was the second review meeting in series on floor price mechanism since it was implemented on August 28. Board, however, did not announce next date for review meeting, as it did in its Sep 09 meeting.

The fixing floor as minimum level for share prices stopped further losses and also helped the market to avoid the fallout of turmoil in international equity markets following bankruptcy and sale more than century old investment banks in the West.

But on the other hand, the floor resulted in reducing daily trading volumes to very thin. The Thursday’s turnover was recorded at 2.5 million shares, which is lowest in the last 10-years period.

http://www.thenews.com.pk/daily_detail.asp?id=137907