Pakistan market crashes

KARACHI, OCT 14: Pakistan stocks finished more than seven per cent down on Thursday as confused investors decided to pull out of the mark...

KARACHI, OCT 14: Pakistan stocks finished more than seven per cent down on Thursday as confused investors decided to pull out of the market until the political uncertainty from Tuesday’s military coup ends. "It is a totally uncertain situation. No one has any idea of where things are going in Islamabad or where the market will go," said Manocher Jamal, a dealer at KASB & Co.

The Karachi Stock Exchange 100-share index ended down 92.51 points, or 7.36 per cent, at 1,164.43. There were 87 losers and only seven gainers on turnover of 173 million shares, compared to 85 million on Tuesday.

Meanwhile, cash-strapped Pakistan on Thursday took desperate steps to hold on to its meagre foreign exchange reserves amid political and economic uncertainty sparked by Tuesday’s coup. The central bank ordered money changers and kerb forex dealers to remain shut until October 20. Commercial banks were told that the few facilities available to send foreign currency abroad were no longer open.

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And cash margins were imposed onseveral imports – another avenue of drain on foreign currency. "It seems the military is preparing for an expected halt on inflows or some sort of sanctions… They might be scared of a flight of foreign currency," one banker said.

Kerb traders are legitimate forex traders who work outside the banking system and don’t conform to banking hours. Pakistan’s cash foreign exchange reserves totalled $ 1.45 billion on October 2.