IMF denies 'bailout fund' from public taxes: SECP proposes Dec 15 for floor removal

[Naveed Yaseen]

By Tanveer Ahmed
KARACHI: A tentative date of December 15 is proposed in an important meeting to remove the stock market floor amidst a perplexing and frustrating situation for the investors in the market.

A flurry of activities was seen on Friday with a number of meetings between representatives of Securities & Exchange Commission of Pakistan (SECP), three stock exchanges i.e. Karachi, Lahore & Islamabad and National Clearing Company of Pakistan (NCCPL) were held to find a way out of the current situation, which the capital markets have been facing in the absence of market support fund.

Chairman SECP, Razi-ur-Rahman told Daily Times that he proposed to remove the floor from the stock market on December 15, 2008 in today’s meeting if the concerned quarters are willing to support the market after the lifting of floor.

According to market participants main issues needed to be sorted out before the resumption of normal trading. These issues pertain to settlement of Rs 11.5 billion in CFS market and Rs 39 billion shares pledges.

About the settlement of stuck-up amount in the CFS market, a proposal to extend the rollover period from three to six months after the removal of floor is also under deliberations.

While the divergent views are prevailing on how to handle the situation, some quarters are terming the situation a “force majeure” and others disagree.

“This is a force majeure situation”, a director of KSE contended.

“The emergent and unscheduled meetings speak themselves of the situation in the capital market”, he added.

On other hand, Managing Director KSE, Adnan Afridi, said, “I don’t want to comment on this,” when asked whether the situation can be termed force majeure or not. On the other hand, according to a participant of the meeting, the meeting remained inconclusive to reach any conclusion. Another meeting has been scheduled on Saturday to further deliberate on the various proposals.

The country’s capital market has been passing through its worst periods with no support in terms of financial bailout package, mainly due to rejection of IMF to extend such facility from the public money.

While the hopes faded in the absence of market stabilization fund, the stock market participants are impatiently waiting for the outcome of consecutive meetings being held at different tiers of the government to resume the normal trading in the market.

The floor was placed on August 27, 2008 to block the steep fall in the value of shares, which fell more than 40 percent from April 18 this year to the date of placement of floor.

http://www.dailytimes.com.pk/default.asp...2008_pg5_1