Skip to main content

Life returns to the capital market


Karachi—Life returned to Karachi Stock Exchange and things took a bright look after suffering gloomy atmosphere at least for last six months.

The market saw shapes of green after being gripped of bearish sentiments after the removal of the cap from KSE-100 which gained 40.39points to close at 5,793.57points level while turnover surged by 179% from yesterday to 210.8m shares. In the overall market, bulls were finally able to thrash the bears by 166 to 71 from overall 241 scrips traded today.

In fact the driving force behind igniting spark in the market was the injection of Rs20 billion State Enterprise Fund as the National Bank of Pakistan, Employees Old age Benefits Institution (EOBI), State Life of Pakistan and a banking consortium transferred Rs5 billion each to the Fund being managed by National Investment Trust.

Resultantly, fresh life in the market was quite visible from the beaming faced of the depressed brokers and investors who suffered heavily due to financial turmoil and suspension of the trade at KSE at least for three months.

It looks that the major issues concerning the market are about to be addressed within a couple of days to bring a spark in the market following activation of Rs20 billion fund sparked new hope in the investors.

It may be noted that several brokerage houses and agencies either compelled to suspend their business operations and thousands of people attached to the stock market were rendered jobless as a result of the financial turmoil which consequently forced the regulators to suspend business operations at Karachi Stock Exchange for more than three months from October to recently ended December 2008.

Many people earning their bread and butter from stock exchange had to switch over to other professions and most of them have to sell their assets including houses, cars and other valuables to make up the losses incurred in the wake of financial melt down at the capital market.

The uncalled for suspension of business at the capital market due to fear of a thud fall sent a bad message of the economy abroad and provided an opportunity to the credit rating agencies to for downgrading of the sovereign rating of the country. However, the fear of heavy correction proved true which is reflected in the drop of the index to the level of 5,753 from over 15000 point level when the financial crisis hit the economy.

Meanwhile NIT is quite ready to launch the Rs.20 billion NIT-State Enterprise Fund without losing any time as NIT has completed all necessary legal work which includes signing of the agreement with the financing institutions and the approval of Guarantees of the government of Pakistan.

The legal work which entailed a lot details and paper work including the registration, approval of the Fund, Financing Agreements, Guarantees etc all have been accomplished.

The fund can only invest in 8 eligible stocks which are identified as OGDC, PSO, PPL, SNGPL, SSGC, KAPCO, and NBP AND PTCL.

According to NIT, the Fund is intended to sell units to the non-resident Pakistanis after the initial operation and after the market stabilization. The stocks mainly related to strong state owned organizations would perform well and provide necessary security to the financers of the fund and send strong signals to the market which is overly depressed at present. Returning to day’s business, the investors took fresh positions in major blue chips items like OGDC, PTCL, UBL, DGKC and NBP which also were the volume leaders today.

Comments

Popular posts from this blog

SECP initiates 86 show-cause proceedings against compamies

The SECP’s Enforcement Department— while enforcing compliance of corporate and allied laws— initiated 86 show-cause proceedings and concluded 54 proceedings against chief executives, directors and auditors of companies in February and March. While facilitating companies to strengthen their capital base, the department allowed three listed companies to issue shares by way of otherwise than right at a discount and at par.  In order to strengthen the existing regime of Corporate Social Responsibility (CSR) reporting, the SECP has joined hands with the ICAP for the external assurances of the CSR reports.  CSR reports assist organizations in understanding and communicating their vision of combining a company’s profitability with social responsibility and environmental care. Both the SECP and the ICAP have reaffirmed their commitment to developing a framework for external assurance in accordance with prominent international assurance standards, and within a mutually agreed time f

Chairman SECP Reaffirms Commitment to Facilitate Businesses

The Securities and Exchange Commission of Pakistan (SECP), as part of its efforts to promote ease of doing business through meaningful stakeholder engagement, held an interactive virtual session with representatives of Overseas Investors Chambers of Commerce & Industry (OICCI).   The session was chaired by the Chairman SECP, Aamir Khan, who briefed the participants about recent improvements in the regulatory ecosystem and highlighted some key changes, including introduction of digital certificate of incorporation, creation of special portal for banks to facilitate account opening, digitization of account opening process for resident and non-residents for investment in the capital market etc. These reforms have greatly improved efficiency of processes, which have been duly reflected in country’s global rankings.   During the session, the Chairman apprised the OICCI’s representatives about SECP’s future endeavors in this regard to simplify regulatory requirements, reduce compliance c

Sohail Wajahat Siddiqui made new Chairman of PSO

The Ministry of Petroleum and Natural Resources has notified appointment of Sohail Wajahat Siddiqui as chairman of the board of directors of Pakistan State Oil (PSO) . Siddiqui has replaced Nazim F Haji with immediate effect. Sohail heads Siemens Pakistan Engineering Company Limited as its Managing Director and Chief Executive Officer. He has served as the president of the Overseas Investors Chamber of Commerce and Industry (OICCI) and also served as chairman of Pakistan Red Crescent Society, Sindh. Siddiqui has also served as board member of Pakistan Steel. He is also the founding member of the Pakistan Business Council. In recognition to his contribution towards the national cause, he has been awarded Sitara-e-Imtiaz. (The News)