Discussions over flooring continue (06122008)

LEADER REPORT
KARACHI: Gloom stayed across the board as the index of the capital market remained stagnated owed to the prevailing flooring. It was anticipated that the flooring will be gone soon. Only 41,700 shares were traded with shares of 13 companies with 4 advancers and equal number of decliner while 5 scrips remained at their previous positions.
CCP issues notices to Stock Exchanges
The Completion Commission of Pakistan has issued show cause notices to the all three local stock markets for imposition of the 'flooring mechanism' on their respective indices, formulating it to be an "antimarket measure". It required reasonable explanations for such imposition as it has restricted the exit mechanism.
IMF tranche pulled Forex Reserves higher
The USD3.1bn tranche from IMF's loan of USD7.6bn was received last Friday which has pulled the forex reserves into better shape to USD9.08bn by Nov 29th. The reserves moved up significantly from USD6.59bn a week earlier.
European Indices fall extends
Concerns over the economic health of the giant economies has left the European market into dire circumstances as indices across Europe fell. Worsening global economy, falling commodity prices and fears of further job cuts are few factors that have kept investors skeptic. While European central banks have further slashed interest rates by 0.75 percentage points to 2.5 percent to boost investments and businesses.
Future of flooring remains undecided
Brokers and investors were looking forward over the removal of the flooring in near future. However, IMF gave a go ahead signal sans funding, which has created another gloomy situation for the already subdued stock markets. KSE BoD are now formulating the guidelines for the removal of the flooring without funding and are looking for alternatives if any to tackle such situation. Undertaking "force majeure" may turn out to be an alternative.