a good letter to the editor about the KSE floor:

In Dawn:
FOR the last three months domestic bourses are dormant due to existence of ‘floor’ barrier. Many investors are sceptical about removal of this hurdle as many tentative dates were given, as solace, for its removal. Besides, finance adviser Shaukat Tareen has announced that markets will soon be injected a hefty sum of Rs20 billion through contribution of Rs5 billion each by NIT, NBP, SLIC and EOBI but no practical steps have so far been taken.

This prolonged uncertainty is causing mental sufferings to all stakeholders.

According to available information, about Rs10 billion is still lying in CFT, incurring unbearable markups. It is feared that the entire investment will melt if expeditious action is not taken.

Even if government financial organisations opt for investment in selected scripts, then merely Rs5 billion will be released. Besides this adverse scenario, equities worth Rs40 billion have been financed by banks, including Rs6 billion in CFT. Thus this colossal amount of banks is at stake. Consequently, these financial institutions want to carry ‘floor’ till December closing to save their credibility.

Huge investments also made in mutual funds and peculation melted up to 45 per cent under shelter of risk disclosure clause.

Remnant equities worth Rs70 to 80 billion also belong to foreigners and it is feared that this footloose capital will be withdrawn immediately upon removal of ‘floor’.

Although it is feared that many barons of bourses will collapse upon removal of ‘floor’, yet is there any justification to keep on lingering just to save their souls.

Thousands of employees belonging to various categories either are not getting their salaries or underpaid for the last three months but do not disclose overtly to save the honour of their employers in spite being put under distress.

In addition to this, charitable organisations getting donations from affluent class in financial market are in limbo.

It is suggested that funds should be injected up to Rs10 billion in blue chips, which is quite safe to protect the other national organizations, and for remaining shortfall, punish the bubble creators.

Under any circumstances we should never resort to unethical business practice like this artificial support in order to maintain credibility which prevents flight of capital.

We must dare to face the reality to create confidence among domestic as well as foreign investors. Hence remove the barrier of incognito ‘floor’ at once.

SIDDIK S. JAANGDA
Karachi

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