The Chairman of the Karachi Stock Exchange, Yasin Lakhani, has called an emergency meeting of the Board of Directors on Thursday at 8.30 am. The meeting has to review the current settlement crisis facing the exchange and take appropriate measures to break the bear hug, after a bull-run lasting for more than 19 weeks. The KSE Index registered alarmingly heavy falls consecutively during the last week.
It would be pertinent to note that the Managing Director of KSE, Moin Fudda is reported to have been consistently warning the investors since the Index crossed the 8000 level to be careful and choosy in the selection of stocks on the basis of valuation and ignore the hype being created that the PE Ratio is only 15 and comparing KSE with a much bigger exchange across the border, where investors base is much broader and dozens of mutual funds are active.
Responding to the charge levied by leading brokers that a meeting of bankers held on Tuesday had added to the uncertainty and nervousness, Fudda explained that on Tuesday there was a delay on collection of losses on the Futures counter. "Banks are supposed to clear our checks by 9:45, but on Tuesday cheque clearances were not done until 10:45 and some of the cheques were not cleared.
While those brokers whose cheques bounced claimed that there were sufficient funds in their accounts and banks were at fault for returning the cheques. Therefore, Fudda said, we met the bankers to ascertain the facts and know the real reason for delay in cheque clearance."
Regarding settlement of deals outside the exchange, Moin Fudda said that the rules permit private deals and it is between the buyer and the seller to negotiate and report it to the exchange for the sake of transparency. Even now KSE reporting sheets show block deals. There is functionality in the system to roll over or switch March deals into April, he added.
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