KSE seeks govt guarantee to bear losses

KARACHI - The desperate Karachi Stock Exchange (KSE) Board has forwarded two unusual proposals to the government demanding guarantees to bear the burden of losses to market and margin calls, if the stock market headed downward following the pumping of Rs 20 billion 'equity market fund' into the market. And provide security to the foreign investors to also endure their losses if they faced after holding up shares worth Rs 30 billion at a fixed price within one-year period.
This was stated by the KSE authorities during a meeting with KSE Board, SECP and Finance Minister Syed Naveed Qamar here on Sunday.
The KSE Board will meet on October 10 to review the price freeze mechanism and it is being expected that in the meeting, it may announce to remove the floor from market by October 16 to avert further market erosions, whether their proposals were met or not, the meeting decided.
“Since long the KSE board has been implemented floor in the market, now it’s not possible for it to further extend the period of floor to the next month,” source attended today’s meeting said.
However, as far as the proposals are concerned, the finance minister stated that he will inform about government’s standpoint to the board, whether the proposals are being accepted or not till coming Wednesday, October 8, 2008.
According to sources, the SECP is going to allow the CFS shareholder to get banking finance by pledging CFS holdings. On the other hand, the SECP has decided to ban the day trading of the Mutual Fund Industry, the sources added.