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Wednesday, 19 September, 2001, 16:25 GMT 17:25 UK
Pakistan exchanges stay closed
Karachi skyline
The decision to suspend trading in Pakistan was taken on Sunday
Financial market regulators in Pakistan have announced that the country's three stock exchanges will remain closed until next week.

The exchanges have not traded since Monday.

The expectation is that after the opening the initial few hours are going to see pretty steep slides

Fahran Bokhari, Financial Times correspondent

The initial decision to suspend trading was taken last weekend but markets were expected to re-open on Thursday.

Regulators are concerned that when the markets do re-open, heavy selling will take place, prompted by expectations of military retaliation for the terrorist attacks in the US.

Following the attacks last Tuesday, the benchmark 100-share index of the Karachi Stock Exchange shed more than 9% as investors rushed to sell their shares.

Pakistan has stock markets in Karachi, Lahore and Islamabad.

Preventing a slide

Fahran Bokhari, the Financial Times correspondent in Pakistan, told the BBC's World Business Report that the government was searching for ways to prevent a heavy sell-off as the markets re-open.

"I have been told that the government has been quietly talking to banks in the hope that they would lend enough money to help market investors, who would then step in to buy some of the shares," he said.

In the past, the Pakistan government has asked local institutions to help stabilize the market by buying shares.

But this strategy has never proved that effective.

Mr Bokhari believes that the scale of the problem is now so large the government will not be able to prevent a slide.

Fahran Bokhari, FT correspondent in Pakistan
"This is a very bad moment for investors in the Pakistani markets"
See also:

18 Sep 01 | South Asia
Karachi protest against US
17 Sep 01 | South Asia
Indian markets crash
12 Sep 01 | South Asia
US attack hits Karachi market
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