KSE, SECP fail to break deadlock

KARACHI-Best brains of the Karachi Stock Exchange (KSE), and Securities Exchange Commission of Pakistan (SECP) for the third consecutive day failed to break deadlock on various proposals and find a concurrent solution acceptable to both the regulators. A source inside the KSE Board said that the promise made by a recently appointed govt functionary to arrange funds in CFS market to help ease liquidity pressure in the stock market did not come true, as a result of which the stalemate continued.
However, the meeting between frontline regulator, the KSE Board and the apex regulator SECP was extended to fourth day after the two sides had failed to reach a consensus in its third consecutive meeting held at KSE on Monday.
Sources familiar with the discussion held in the third meeting said that the meeting had been extended by a day and would now be held on Tuesday with the hope that the matters would be resolved to the satisfaction of both parties. They said that the adviser to PM on Finance, now in the US also talked to the KSE Board during the meeting.
The sources said that State Bank of Pakistan (SBP) was likely to announce further 100 bps cut in the CRR of banks on Tuesday.
The move of SBP will bring some relief in short run but the underlying problems will not disappear overnight, the sources added.
In the light of this situation there was little hope that banks would provide liquidity to the stock market, as they were already facing shortage of liquidity,they maintained.
The sources further said it was just one of the options that had been a part of the package that the board had prepared to hold discussion in the meeting with the hope that after one step had been taken to provide relief to the market other points in the package would later be discussed for implementation.