KARACHI, Oct 26 (Reuters) - Directors of Pakistan's main stock exchange
decided on Sunday to postpone the removal of a floor that has been propping up
its index since August, an exchange official said.
The Karachi Stock Exchange imposed the floor at 9,144 points on Aug. 28,
after a 36 percent fall from the beginning of the year on political uncertainty
and a sagging economy. The exchange board said on Oct. 14 the floor would be
removed on Oct. 27.
No date has been fixed for the removal of the floor.
The exchange's managing director told a news conference the floor would
not be removed until a support fund was in place.
"It is in our collective interest to return to our normal trading
parameters," said managing director Adnan Afridi adding that stabilisation
measures had to be in place when the floor was removed.
The floor has stifled trade and the index ended flat at 9,182.88 points
on Friday.
The stock market regulator said on Wednesday it had approved a 20 billion
rupee ($247 million) fund being set up by the government to support share prices
when the floor was removed.
Afridi said the fund had been approved but authorities were working out
its mechanics.
The fund would invest in nine state-owned entities, an exchange official
said on Friday, adding that a special session would be held on Saturday to
enable the fund to buy stocks 12.5 percent lower than current prices.
But authorities postponed the special session on Saturday because of what
an SEC official described as some differences between the brokers and exchange
officials.
Earlier on Sunday, the exchange directors held a meeting with the prime
minister's top adviser on economic affairs, Shaukat Tarin.
Tarin has said he wanted to see the floor removed, but he told Dawn
Television earlier on Sunday, if the support fund was not in place, then a
postponement of the floor's removal was an option for exchange directors.
The fund will invest in nine state-owned companies: Oil and Gas
Development Co Ltd, Pakistan Petroleum Ltd , National Bank of Pakistan, Pakistan
State Oil , Sui Southern Gas Co Ltd, Sui Northen Gas Co Ltd, Kot Addu Power Co
Ltd, Pakistan Telecommunication Co Ltd and Habib Bank Ltd.
(Reporting by Sahar Ahmed; Editing by Robert Birsel) Keywords: PAKISTAN
STOCKS
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