Business | Markets
Pakistan's angry investors stone bourse as stock markets plunge
Hundreds of angry investors, upset by plunging Pakistani share prices, smashed windows of Karachi Stock Exchange and scuffles broke out during a protest yesterday to demand a temporary closure of the market.
- Reuters
- Published: 00:06 July 18, 2008
- Image Credit: AP
- Angry Pakistani stock brokers break a door of Karachi Stock Exchange to protest against huge decline of stock market in Lahore, Pakistan.
Karachi: Hundreds of angry investors, upset by plunging Pakistani share prices, smashed windows of Karachi Stock Exchange and scuffles broke out during a protest on Thursday to demand a temporary closure of the market.
"We are looking at the situation and there is no question of suspending the market," said Razi-ur-Rahman, chairman of Securities and Exchange Commission of Pakistan (SECP), as staff cleared broken glass from the trading hall floor.
A slump in investor confidence accelerated yesterday, as stocks fell 2.7 per cent and the rupee dropped by 1.3 per cent due to fears of political uncertainty and an economic meltdown during Pakistan's transition to civilian-led democracy.
Pakistan's current account and fiscal deficits are unsustainable, inflation over 21 per cent is at a three-decade high, and foreign currency reserves have fallen below $11 billion, more than $5.5 billion below last October's record high.
Analysts said investors were also wary due to the rising tension on the Afghan-Pakistani border following Afghan accusations of Pakistani involvement in attacks in Afghanistan.
The Karachi Stock Exchange (KSE) benchmark 100-share index ended down 2.7 per cent, or 279 points, at 10,212.92, its lowest close in more than 18 months.
Dealers said buying, possibly from state-run institutions, helped the index recover from an intra-day low that had marked a drop of more than four per cent.
The KSE-index has shed 12.7 per cent so far this week and is down 35 per cent from a life high on April 21. Total market capitalisation has fallen to about $44 billion from a peak near $75 billion.
Pakistan's poor performance this year is not unique in a region grappling with soaring food and energy prices and slowing global growth. Neighbouring India is down some 38 per cent from its life-high early this year. The steep fall since Monday followed a relaxation of curbs on daily stock movements that had been tightened in late June.
From Monday, daily circuit breakers reverted to 5 per cent up or down, having been amended to one per cent down or 10 per cent up, a move that throttled trading volumes.
Close to 1,000 mostly small investors gathered in the gardens of the bourse to demand that the KSE close for two days.
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