Thursday, 30 May 2019

Fund to prop up stock market in 7-10 days likely: SECP chairman

KARACHI: The government is putting together a fund with contributions from banks and insurance firms to buy stocks through a state-owned asset management company, according to the Securities and Exchange Commission of Pakistan (SECP).The fund, proposed by brokers this month, will be similar to the one that helped stabilise the Karachi Stocks Exchange after the 2008 financial crisis, international media reported.The regulator has eased norms to allow companies to buy back more of their shares and is drawing up rules for allowing smaller firms and fintech startups to list with less stringent reporting standards. The measures aim to arrest a two-year slide in the stock market.“The fund is under serious consideration to be launched hopefully by next week to 10 days,’’ SECP Chairman Farrukh Sabzwari said in an interview. “You’ll get more color in the next few days” on the fund’s composition and size, he said.Pakistan’s return to emerging-market status at MSCI in June 2017 proved to be a nightmare for investors, as it sparked outflows instead of the expected foreign inflows. The benchmark index has since slumped 31%, and trades at one of the lowest valuations for any market at just over six times projected earnings.Traders in Karachi are no strangers to government support measures. A similar fund by the National Investment Trust in early 2009 put the market on a recovery path. Between the collapse of Lehman Brothers in September 2008 and the nation’s upgrade to an emerging market, Karachi’s benchmark index surged 300% in dollar terms, the best stock-market performance in the world.The market cheered the proposal, with the benchmark KSE-100 Index surging 2.6% at 10:46 a.m. local time, set for the highest level in almost a month. “Investors are upbeat after the chairman commits a timeline for the fund,’ said Gohar Rasool, head of international sales at Intermarket Securities Ltd.

from The News International - National http://bit.ly/2EEDB6w
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