Pakistan stocks plunge as market supports removed

July 14th, 2008 - 5:49 pm ICT by IANS  

Karachi, July 14 (DPA) Pakistan stocks sank Monday after a state corporate watchdog at the weekend lifted artificial measures which were keeping the market afloat for the last month, traders said. The benchmark Karachi Stock Exchange-100 Index sank by 4.5 percent to close at 11,177, down by 518 points.

Heavy foreign selling was witnessed in all stocks as investors quickly pulled out money amid a crisis of confidence.

In early June, the Securities Exchange Commission of Pakistan (SECP) imposed measures to halt the Karachi bourse’s continuous slide. The steps included limiting the decline in share prices to one percent per session.

But Saturday the government again reverted to a normal five percent limit.

“Foreign investors were obviously reluctant to invest in such a regulated market,” said Najam Ali, head of JS Investment.

Meanwhile, Monday was also the first day of the introduction of 50-billion-rupee ($702 million) fund to stabilize the market, but dealers opined that it would do little to attract investment because of confidence in the Pakistani market.

They said foreign investment in the country’s main stock exchange had already fallen by 90 cent during the last six months.

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