Page last updated at 11:06 GMT, Tuesday, 24 June 2008 12:06 UK

Pakistan acts to stem share fall

A Pakistani trader monitors shares' movements at the Karachi Stock Exchange
There are worries about the effectiveness of Pakistan's ruling government

Pakistan's main stock index has surged after its owner, the Karachi Stock Exchange (KSE), announced measures to stabilise the market.

The KSE's 100 share index gained 782.74 points, or 7%, to 11,944.91 after reaching a 15-month low on Monday.

A crisis of confidence in Pakistan's economy and uncertainty about its ruling party have hit shares recently.

The KSE said it would reduce the daily limit at which shares can fall to 1% for a month.

At the same time, it temporarily increased the limit at which shares could rise to 10%.

Previously, the trading band allowed for a 5% movement in either direction.

Challenges

The exchange also banned "short selling" - essentially betting that shares will fall in value - for a month and said it would set up a 30bn rupee ($441m; 224,8m) fund to stabilise the market during periods of volatility.

"These measures did what was intended, and the market opened higher," said Asad Iqbal, managing director at Ismail Iqbal Securities Ltd.

But he said that the low volume of trades meant that investors were still cautious.

A growing company and consumer debt burden and surging inflation are to blame for the worries, analysts say.

Concern has also been fuelled by political infighting between the parties that make up the new coalition government over the reinstatement of judges sacked by President Pervez Musharraf.

Print Sponsor


SEE ALSO
Karachi shares fall on rate rise
23 May 08 |  Business
Markets wary after Bhutto killing
27 Dec 07 |  Business
Pakistan's government in turmoil
13 May 08 |  South Asia
Price of Pakistan's economic woes
14 Apr 08 |  South Asia

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC iD

Sign in

BBC navigation

Copyright © 2017 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific