Continuous funding system takes off

The continuous funding system (CFS) took off at the Karachi Stock Exchange on Monday with enthusiastic investor’s response, as the KSE-100 index gained 279 points. According to analysts, the CFS rate on Monday stood at 16.9 per cent with the level of investment at Rs16.3 billion.

KSE Chairman Yasin Lakhani told Dawn that the new system would fulfil the immediate liquidity need of the market and would create stability and restore confidence. He also said that the CFS would eliminate shortcomings in the badla system.

SECP unable to act against stock manipulators, defective laws cited

The Securities and Exchange Commission of Pakistan (SECP) has expressed inability to take action against leading brokers and financial institutions who were involved in the recent (March) stock market crash due to ‘defective’ laws.

The Commission also tabled a fresh list before the National Assembly Standing Committee on Finance containing names of 10 out of 60 brokers/financial institutions responsible for the crash against whom hearing has been completed and judgement would be issued soon.

However, the SECP effort failed to satisfy the standing committee, which constituted a 5-member subcommittee to thoroughly probe the financial scam that jolted the stock market.

Mutual funds can invest abroad

In what is being seen as a landmark decision, the State Bank has allowed mutual funds operating in Pakistan to invest abroad. But initially the central bank has placed a cap of $15 million on such investment by a single mutual fund at a given time, says a circular issued by the Exchange Policy Department of the SBP on Saturday.

“This is a landmark decision,” says Mr. Jahangir Siddiqui who pioneered the open-ended mutual fund in Pakistan. “It is going to discourage capital flight from Pakistan and enable investors to diversify their portfolios geographically for the first time in the country.”

Javed Omer Vohra to quit stock business

Sponsors of the Javed Omer Vohra & Company Limited (JOV & Co.) appears to have decided to quit the stock business, following sale of their controlling stake to Crescent Standard Brokerage and Investment Services Limited. A notice issued on Tuesday by another corporate member of the Lahore Stock Exchange Dosslani’s Securities (Pvt) Limited stated:

“Our clients have entered into an agreement with sponsors of JOV for purchase of 7 million ordinary shares, i.e 35 per cent of the equity stake along with management control of the company.”

It mentioned that the price per share for the transaction was Rs175 per share.