"The government is unable to provide any market support fund because of the IMF restriction from using public money to bail out the stock exchange," said MD KSE Adnan Afridi while briefing the members at an emergency meeting held here on Wednesday.
Earlier, the IMF while approving a $7.6 billion stand-by loan for Pakistan had conditioned that it will not provide any fund to stock market without having consultations with it. The meeting also discussed the possibility of floor removal without fund and discussed about any possible date for removal of floor. After the members' meeting, the KSE board of directors also held its separate meeting to take up the prevailing situation following the government decision.
Later, an emergency meeting between Securities and Exchange Commission of Pakistan and KSE board of directors was held to discuss the situation after the unavailability of fund. It is learnt that the boards of directors of Lahore and Islamabad stock exchanges also joined the meeting through videoconferencing system.
The meeting discussed various issues mainly arrangement of liquidity to settle Rs 9 billion CFS shares. However, the meeting remained inconclusive. Sources said that another meeting is expected to be held on Thursday (December 4) to finalise the removal of floor without the fund.
It is learnt that SECP wants to remove floor immediately to avoid Pakistan's exclusion from MCI, however, the KSE board wants some time to settle CFS and other issues before removal of floor. The SECP asked the KSE board to send their proposals regarding the removal of floor to the regulator so that any date to 'unfreeze' the market could be finalised.
On the other hand, the KSE members while protesting against the government decision said they were kept in dark for last three months about the availability of fund. They said that the government had give an impression that out of total Rs 20 billion fund, Rs 14.5 billion has been made available and the remaining would be available in next few days.
They said that the government took this decision when the date for removal of floor was to be finalised. It is learnt that the members would hold their meeting in next few days to discuss the situation after the government decision and the issue to remove floor without fund.