It has also been proposed that 'lower circuit' should be increased by one percent, every week. Sources said that the proposal was sent to the IMF, because the fund had restricted Pakistan from lifting the price floor or providing any financial support to the bourse, without prior approval of the fund.
The members of Karachi Stock Exchange (KSE) held an informal meeting here on Monday to discuss the prevailing situation at the share market after imposition of floor mechanism. The issue of availability of Rs 20 billion market stabilisation fund was also discussed in the meeting.
Briefing the members, KSE Managing Director Adnan Afridi said that the government had sent KSE's proposal to IMF that the price floor should be removed from December 12, 2008. It has also been proposed that the floor should be removed with 2 percent lower circuit, and it should be increased by one percent every week.
He said that IMF's response on the proposal was expected by Tuesday. Further strategy would be discussed when the IMF response is received, he added. Regarding Rs 20 billion market stabilisation fund, he told members that Rs 12.5 billion had been made available, while commitment of more Rs 2 billion had also been made by NBP. He said that the remaining Rs 5.5 billion would also be arranged soon.
Sources said that various issues regarding prevailing situation of share market was discussed. The issue of off-market trading also came under discussion and many members proposed that off-market trading should not be mentioned in KSE daily quotation report. However, the MD clarified that under the rules and regulations of Securities and Exchange Commission of Pakistan (SECP) it is mandatory to mention these transactions.
The issue of liquidity also came under discussion. Members expressed concerns over the prevailing situation of the share market and sought government support to pull out the market from current situation. It was proposed that all stakeholders should work jointly to address all difficulties and issues faced by the share market. A large number of members attended the meeting.