The board observed that a continuous sharp decline in share prices can have implications for the wider financial system. With this in mind, the Board took this decision, in terms of the powers described in the Regulations of the Exchange.
However, the board decided that the individual security prices will remain free to trade within the normal circuit breaker limits, but not below the floor price level as mentioned above. It was decided to introduce the above mechanism effective from August 28, 2008 till further notice.
The Board will engage Securities and Exchange Commission of Pakistan (SECP), State Bank of Pakistan and the Ministry of Finance to develop medium term measures for achieving stability in the capital market. Earlier a KSE members meeting was also held at the exchange to discuss the prevailing situation of the share market.
The meeting discussed various suggestions to support the market and to save the investors of further losses. The meeting recommended that KSE to place a floor based on Wednesday's closing level. The KSE Board of Directors, sent these recommendations to the SECP, however, the regulator still considering these recommendations and still not took any decision in this regard.