Stock market postpones floor removal

KARACHI - The Karachi Stock Exchange (KSE) on Sunday extended “price freeze mechanism” in the shares of more than 650 financial companies, keeping it in place at least until after the government pumps promised funds into the stock market to bailout the trapped investors in continuous funding system (CFS) market and picking up shares pledged with the banks.

The board of KSE announced to keep the floor mechanism in place, which was put in place on August 27 in a bid to save the investors and members from the expected default, owing to the continued recession and crisis in the share market.

The floor mechanism, which was to expire October 27 (today) now will last until the government promised funds and put option mechanics are finalised. The board has not mentioned a date for the removal of floor. The Karachi Stock Exchange imposed the floor at 9,144 points on August 28, after a 36 per cent fall from the beginning of the year. The exchange board said on Oct 14 the floor would be removed on Oct 27.

The floor has stifled trade and the index ended flat at 9,182.88 points on Friday.