Body to give final shape to mode of stocks financing

Posted on 07.28.05 by StockPK Team @ 1:00 pm    

The ‘Shaukat Tarin Committee’ will hold a meeting with all stakeholders of stock market on Thursday evening to give a final shape to a new mode of financing, in order to bring back investors to the lack-lustre stock market and improve liquidity.

According to sources, the Committee has improvised the recommendations to be placed with government officials expected to meet in Karachi on Friday, headed by Dr Salman Shah, Advisor to Prime Minister on Economic Affairs, and Omar Ayub Khan, State Minister for Finance.

KSE asked to disseminate top 15 brokers information for futures contract

Posted on 07.26.05 by StockPK Team @ 1:00 pm    

The Securities and Exchange Commission of Pakistan (SECP) has directed the Karachi Stock Exchange (KSE) to disseminate information of top 15 brokers for each futures contract on daily basis. According to a notification of the stock market regulator, “In order to ensure market transparency, effective risk management and to minimise market manipulation at the stock exchange, the Karachi Stock Exchange has been directed to disseminate broker-wise open interest of the top fifteen brokers.”

The position of these brokers would be posted on the KSE website, without mentioning whether the broker is net buyer or seller to maintain secrecy.

Stock market needs Rs 30 billion to improve liquidity

Posted on 07.26.05 by StockPK Team @ 1:00 pm    

Lack of appropriate system to change the traditional badla to margin financing dried up the volumes, forcing the market to trade in a narrow band, resulting in serious drain market liquidity. According to a report presented to Shaukat Tarin - led Committee on “Stock Market Liquidity”, the stock market is driven by liquidity flows.

In case of Pakistan too, this is equally true. When the implementation of changeover from the traditional badla to margin financing began, a lack of appropriate preparation resulted in liquidity crunch. This is a serious situation and needs to be addressed urgently.

KSE introduces COT freeze system

Posted on 07.19.05 by StockPK Team @ 1:00 pm    

The board of directors of Karachi Stock Exchange (KSE) has started a system for freezing total outstanding COT positions to Rs 12 billion, irrespective of individual scrip. According to a notice issued by the KSE on Monday, the governing board of directors of the Exchange in its meeting on July 16 reviewed the SECP directive, capping the COT value at Rs 12 billion in D G Khan Cement, Hubco, NBP, OGDC, Pak Oilfields, PSO and PTCL shares.

The board approved the following procedure, which shall be effective from Monday.

“System shall freeze the total outstanding COT positions to Rs 12 billion, irrespective of individual scrip.

Badla is not back!

Posted on 07.19.05 by StockPK Team @ 1:00 pm    

I am grateful to The News for its backhanded support to the phase-out of badla financing in its editorial “Badla is back” (July 15) - a provocative and totally misleading title which suggests that badla financing had been eliminated and has now been reintroduced. This is simply not true. Even the inference that the process has been rolled back is false. Nonetheless, the editorial makes a very important point in favour of the phase-out of badla financing and, even though it is ostensibly critical of the role of the regulator, I appreciate the spirit behind it.

Badla is back!

Posted on 07.15.05 by StockPK Team @ 1:00 pm    

A regulator is an umpire or judge and should behave like one. He is required to be neutral and come to a reasoned decision after examining the facts. And once he comes to that decision, he should stand firm. If he backs down, the system will fail to deliver.

But firmness doesn’t appear to be the strong point of the Securities and Exchange Commission of Pakistan. The Regulator had announced that margin financing is now on and that badla (brokers’ financing) would die a time-bound death. Stock-market investors were coming to terms with the situation and learning to play within their limits. While margin financing was becoming
acceptable to investors dealing in stocks, the Regulator changed his mind.