Shares in Karachi stock market fell in early trade on Wednesday and dealers said investors and institutions were reluctant to step in despite the reported announcement of a possible support fund for the market. Shaukat Tarin, the country's top economic adviser, said a support found was being set up and shares worth 20 billion rupees ($247 million) would be sold to overseas Pakistanis, the local daily reported.
Tarin, who was not available for comment, said the "modalities" of the fund would be released in two or three days, newspaper said.
The Karachi Stock Exchange benchmark 100-share index shed 0.56 percent, or 47.02 points, to 8,397.87, its lowest in more than three years, on turnover of 5.9 million shares by 10:30 a.m. (0530 GMT).
"Talk of this fund has been coming for many days but it has never materialised," said Atif Malik, head of international sales at JS Global Capital Ltd.
Authorities removed a floor on the main index on Monday. It was imposed in late August after sharp falls and led to the withering of trade.
Dealers had hoped the floor would be removed in October but authorities said they wanted to first set up a 20 billion rupees government support fund.
However, the International Monetary Fund (IMF), which last month approved a $7.6 billion loan for Pakistan to avert a balance of payment crisis, had opposed the use of public funds to support the share market, a senior exchange official said.
According to newspaper the IMF had now given the go-ahead for the fund.
Legal cases were also dampening trade.
The KSE management, including the Securities and Exchange Commission and the National Clearing Company of Pakistan Ltd, are facing cases filed by brokers seeking settlement of amounts borrowed through a continuous funding system, a funding mechanism for some stocks listed on the KSE.
One hearing is scheduled to resume on Wednesday.
In the currency market, the rupee was trading firmer at 80.40/60 to the dollar, compared with Tuesday's close of 81.25/35 and dealers said there were rumours of possible State Bank of Pakistan intervention.
The rupee slipped 1.6 percent on Wednesday as negative sentiment prevailed on fear of portfolio outflows following the removal on Monday of the stock index floor.
Tarin, who was not available for comment, said the "modalities" of the fund would be released in two or three days, newspaper said.
The Karachi Stock Exchange benchmark 100-share index shed 0.56 percent, or 47.02 points, to 8,397.87, its lowest in more than three years, on turnover of 5.9 million shares by 10:30 a.m. (0530 GMT).
"Talk of this fund has been coming for many days but it has never materialised," said Atif Malik, head of international sales at JS Global Capital Ltd.
Authorities removed a floor on the main index on Monday. It was imposed in late August after sharp falls and led to the withering of trade.
Dealers had hoped the floor would be removed in October but authorities said they wanted to first set up a 20 billion rupees government support fund.
However, the International Monetary Fund (IMF), which last month approved a $7.6 billion loan for Pakistan to avert a balance of payment crisis, had opposed the use of public funds to support the share market, a senior exchange official said.
According to newspaper the IMF had now given the go-ahead for the fund.
Legal cases were also dampening trade.
The KSE management, including the Securities and Exchange Commission and the National Clearing Company of Pakistan Ltd, are facing cases filed by brokers seeking settlement of amounts borrowed through a continuous funding system, a funding mechanism for some stocks listed on the KSE.
One hearing is scheduled to resume on Wednesday.
In the currency market, the rupee was trading firmer at 80.40/60 to the dollar, compared with Tuesday's close of 81.25/35 and dealers said there were rumours of possible State Bank of Pakistan intervention.
The rupee slipped 1.6 percent on Wednesday as negative sentiment prevailed on fear of portfolio outflows following the removal on Monday of the stock index floor.
No comments:
Post a Comment