I can’t see the situation changing for a long time. The government still does not seem interested in governing, and the confidence in the market seems to be at a very low ebb.
KARACHI: Karachi Stock Exchange (KSE) in the persistent grip of bears saw the index nose-diving below 26 months’ lows, while the KSE members in panic held an emergency meeting at 3.00 P.M., when several proposals including capping the KSE-100 index at 9,000 were mulled over, but in the absence of arriving at a consensus with the Securities and Exchange Commission (SECP), none of the proposals could be finalized.
**KSE continues witnessing one of the worst slumps, eroding almost 45 percent in its 100 index during the last four months. The financial market appears worst hit by the ongoing political tussles between two major parties once in alliance and now flexing muscles against each other. **
Earlier KSE-100 index was seen at this low on June 14, 2006. On the other hand, KSE senior members told Geo News that the members of KSE Board in the wake of the crash in the market Tuesday tried contacting Federal Finance Minister, Naveed Qamar, but despite best efforts couldn’t get him.
**Stockbrokers blamed the government for not making any sincere efforts for salvaging the sinking market. They said that the Support Fund set up for this purpose has thus far made purchases of only Rs4 billions, while it was issued a grant of Rs20 billion. **
Aalsi bhayee, the govt is full of jokers.. And after all its not written in Hadith or Quran ( Zardari version) that economy of a country should be stablised by its rulers . So just forget it
*Stockbrokers blamed the government for not making any sincere efforts for salvaging the sinking market. They said that the Support Fund set up for this purpose has thus far made purchases of only Rs4 billions, while it was issued a grant of Rs20 billion. *
My question is, why was this banana fund setup in first place? How many governments setup funds to make false investments (investment only to "support" or provide confidence) for gamblers?
My question is, why was this banana fund setup in first place? How many governments setup funds to make false investments (investment only to "support" or provide confidence) for gamblers?
happens all the time even on Dow Jones and FTSE. Bit more subtle there but the central banks there have supported the market many times.
My question is, why was this banana fund setup in first place? How many governments setup funds to make false investments (investment only to "support" or provide confidence) for gamblers?
I do not know how much you know about economy or stock market, but what you wrote shows you know very little. To call people gamblers who invest in country businesses as managers or shareholders shows complete ignorance of economical activities in the country.
Stock Market is a place where people invest to become shareholders in businesses that is starting or already running. Owners of stock market quoted companies are people who hold shares in those companies. It is due to presence of investors in stock market that people find money to set up industries and country develops. It is these people (investors) and their employees (people working in the business they own) who pay most of the taxes in the country.
Now when these investors would cash in and leave, businesses collapses and people working in those businesses get unemployed. This results in country's economy going bust and everything starting to collapse.
My question is, why was this banana fund setup in first place? How many governments setup funds to make false investments (investment only to "support" or provide confidence) for gamblers?
good question - how will they decide what stock to buy with this 20b? smells like open invitation for corruption. I don't think anyother government has such a fund. The closest I can think of is when recently the Bear-Sterns was bailed out by US providing special credit facility to JP Morgan. But direct intervention by govt in stock market (unlike currency and credit market), that I have not read about anywhere.
But direct intervention by govt in stock market (unlike currency and credit market), that I have not read about anywhere.
They do intervene in the market, as I said before in a more subtle way. During the 1987 and 1999 stock market crashes the Federal Reserve was very active behind the scenes in rescuing the market.
For example in 1997 when the markets crashed the federal reserve held meetings with leading companies in order to stabilise the market before it opened the next morning and just before the markets opened a big interest rate cut was followed by announcement by IBM to buy $2bn worth of its stock back. The makret which had opened down 400 points shot up over 400 points within minutes. Similar exercise was conducted after the immediate aftermath of 9/11.
I do not know how much you know about economy or stock market, but what you wrote shows you know very little. To call people gamblers who invest in country businesses as managers or shareholders shows complete ignorance of economical activities in the country.
Stock Market is a place where people invest to become shareholders in businesses that is starting or already running. Owners of stock market quoted companies are people who hold shares in those companies. It is due to presence of investors in stock market that people find money to set up industries and country develops. It is these people (investors) and their employees (people working in the business they own) who pay most of the taxes in the country.
Now when these investors would cash in and leave, businesses collapses and people working in those businesses get unemployed. This results in country's economy going bust and everything starting to collapse.
By gamblers I am referring to large population who flocked to the stock market when they saw "Rs 1000 giving return of Rs 2000-3000" etc., these are the people who ransacked one of the Stock Exchange few days ago.
By having this kind of fund is like govt buying the losses directly. There can be some monitoring body who can give incentives to big companies to "buy back" as Ehsan bhai indicated so the companies buy the stock (showing their own confidence in their stock) but to use public money to stop the market from going down so some investors can be profitable is sham IMO.
By gamblers I am referring to large population who flocked to the stock market when they saw "Rs 1000 giving return of Rs 2000-3000" etc., these are the people who ransacked one of the Stock Exchange few days ago.
By having this kind of fund is like govt buying the losses directly. There can be some monitoring body who can give incentives to big companies to "buy back" as Ehsan bhai indicated so the companies buy the stock (showing their own confidence in their stock) but to use public money to stop the market from going down so some investors can be profitable is sham IMO.
Well, there are people who gamble in stock market similar to people gambling in cricket, or even on election results. Stock market gamblers are option traders and day traders. It does not matter to stock market gamblers if stock market is going down or up. They sell short or long, and they make their money as long as they can guess (predict) what direction market would move. Stock market gamblers would never ransack the stock market, as they like predictable share movements and nothing matter to them. Only true investors who put their hard earned money in stock market trusting the country and skill of policy makers (government), it is they who burn their fingers and go berserk.
A quoted company management cannot buy (or sell) shares in the stock market without consent of the shareholders, as company management are employees and owner are shareholders. All money that company has in bank or borrows belongs to shareholders. Obviously, shareholders would not like their company to buy shares that is deteriorating. Buying a deteriorating shares by company would mean, company giving money belonging to one group of shareholders who are holding deteriorating shares in the company to another group of shareholders who want to sell and get out of business.
Government bails out stock market because it is these big businesses that pay most of the taxes to government and employment to the masses. Obviously, government would not like these businesses to collapse as their collapse means unemployment in the country as well as no tax to the government. Country economical prospects also deteriorate with deteriorating stock market. As for country like Pakistan, government is the biggest share holders in KSE, so deteriorating share prices means government losing most. For instance, Government of Pakistan holds 85 percent of OGDC shares and lost around Rs 40 per share since April 2008, that comes to around Rs 160 billion of public wealth government lost on its around 4 billion OGDC share holdings alone since market crash.
Government interferes in deteriorating Stock market everywhere in the world and mostly they interfere in two ways. They can become shareholders themselves by buying shares in companies (in this way country benefits when economy gets better and company shares price boosts). Another way is to give cheep loan to companies and as loan is usually big component in a company finances, company saves on interest and thus come out of problems.
Govt has taken a very strong and wise step by declaring 27th August prices for individual stock as floor price until confidence returns. It is not bad decision but this could not last indefinitely. I hope that government start sorting out political and economical problems that started after election (especially after that stupid duffer Ishaq Daar’s press conference in April full of lies and showing that he does not understand even basic economical figures and graphs, still got appointed Finance Minister). It seems that people who matter (investors) where country’s economy is concerned have completely lost any trust on bunch of politicians in power, and if these problems are not sorted out than Pakistan could easily return to 1999 position becoming Somalia of Asia again.
Well, it is true that all problems started after election … and do not think that people who invests are idiots that they were investing in Pakistan until election (rather, until one of the biggest Liar in Pakistani politics, Ishaq Daar, made mess in press briefing with lies and propaganda). If people with money are closing their businesses, stop investing in the country, selling their assets and leaving Pakistan, this is all happening because of election results and incompetence of present government or their lack of interest towards well being of Pakistan.
Anyhow, since you love reading about mistakes of Musharraf and cause of present Pakistani problems due to Musharaff, then here it is: Musharraf mistakes started 8 years ago when Musharraf decided not to hang Nawaz, rather Musharraf accepted Nawaz begging for life and promissing to leave politics to do ‘Allah Allah’ in Saudi Arabia, not realising that when Nawaz says ‘Allah’, he means ‘pounds and dollars’. Musharraf mistakes further happened 6 years ago when Musharraf decided that Pakistan needs democracy (however sham) and thus had election 2002, and then another mistake followed 4 years ago when Musharraf thought that Zardari should get similar deal as Nawaz so he left Zardari as he left Nawaz, making Zardari leave for Dubai to do ‘Allah Allah’. Things became worse when Musharraf did another big mistake in 2007 when Musharraf tried to show decency and instead of giving 2 choices(resignation aur takhta) to corrupt CJ, Musharraf only suspended him and sent charges on him for investigation, resulting that corrupt Iftikhar starting bhangra on road with the help of corrupt politicians and corrupt lawyers. Musharraf made another big mistake in later 2007 of thinking that Pakistani politiicans are not animals but humans, would leave their greed and would learn from their mistakes so he gave them a clean slate with NRO (withdrawing all pre-Musharraf period cases … regarding corruption or whatever … of Nawaz, Zardari and other politicians) so that they can behave like human, stop destabilising the country and start working for the country, but unfortunately he was wrong. Then Musharraf made mistakes of letting these crooks run for election and get back into power. Further, Musharraf made mistake of letting these thugs scare investors away from Pakistan, resulting in ruining of the country and economy of the country, but Musharraf did not sacked the parliament, instead Musharraf resigned.
Saleem bhai, why did all this praise for newly discovered angel zardari start coming out after Altaf Hussain endorsed him for presidency? Also, remember how you were saying all sorts of stuff about dr afiya and saying she was an amreekan citizen and blah blah, aaj altaf bhai ka bayaaan agaya hai, in the other thread, its time for you to make a u-turn on that too. Please ab us kissey mey ‘ganja thug’ ko ley kar na roney bhet jaana please.
p.s. i wonder why musharraf was blaming caretaker govt, and shortcut aziz for the economic mess
Spock Bhia, aap optician kay paas kab say nahie gayea hain: Where have you seen me praising Zardari? Or is it one of you abuses as usual without any substance? Recently (few days back) I wrote in Jang Viewers’ forum: You can see what I believe of Zardari or Nawaz (my post is 6th from top).
Best for a country is proper democracy. Unfortunately, proper democracy cannot come when people who rule are not equals (people from masses) but are unequal (Rich and powerful, landlords, Jageerdars, Waderas, Industrialists, Sardars, Tribal elders, etc). Democracy is not everything for a country neither democracy is just election. Democracy is way of electing/selecting people to govern the country for the betterment of the masses irrespective of their race, colour, religion, sects or cast. Democracy is one way government is formed, but there are many ways, including dictatorship and monarchy. Purpose of every government should be betterment of people and same method of forming government is not answer or solution for all conditions. In one condition (where country is feudal, tribal, poor and uneducated), only a good dictator from amongst the people can change things and bring good for the people. But if country is educated, not tribal, people are not dependent for their livelihood on land, then democracy is better. A country needs good dictatorial rule (or good monarchy) to get to an economical state, where democracy can come and flourish, else country would keep getting thugs and crooks in the name of democracy forever. This change to democracy happened in almost all world countries, where democracy is flourishing and is not sham democracy (like India and Pakistan), where people are not served by so-called democratic forces, but are exploited by them.
Democracy does not bring equality, but brings equal opportunity. Equality comes with communism (at least in theory). For democratic forces to give that, they have to be equals (from the masses … working class with economical standing like masses) and should see that their party is also open to all, giving equal opportunity to all, from within and outside the party. In sham democracy this does not happen as crooks and thugs use sham democracy to do family business of looting and plundering the country. If one wants to see the inequality of people in Pakistani democracy, one can see that in PPP where workers who spent their entire life working and struggling for PPP, even people like Amin Fahim who struggled throughout for PPP, helped Z A Bhutto into politics, even declined Prime Minister slot in 2002 for party, is parliamentary leader of PPP, still he is not equal to Zardari or even Bilawal Zardari who did not even spent a single day struggling for PPP. Fact is that PPP is family business formed to rule and plunder the country. The same is true about PML-N and other parties, including Jamaet-e-Islami and other religious parties. In PML-N, we can see presence of unelected ‘Abba’, family friends, brothers, wives, sons, son-in-laws even Samdhi benefiting and looting the country. When women reserved seats was announced by President Musharraf, Qazi Hussain Ahmed used that opportunity to get his wife and daughter into Assembly on women reserved seats. All religious parties did the same, got in their wife and daughters on women reserved seats, as all believe that their party is family business. Thus, this is called Pakistani democracy … a family business for looting, plundering and making fool of masses. Only thing we can expect from such sham democracy is economic bankruptcy, increasing misery, and destruction of country.
If anyone expecting any good from these thugs, then I am sorry, as that would be expecting impossible. It is not like military General, who in the end come from equals and may give what one can expect from equals, not like people who are running family business in the name of democracy to fool masses. Dictators do not leave legacy and today we do not have son or daughter of Musharraf running for Presidency. Similarly, Ayub Khan, Yahya-Khan or Zia-ul-Haq, none left sons and daughters as head of political party, running for president or prime minister posts. I think that all four Generals who ruled Pakistan tried betterment of people (according to their ability) what Pakistanis could expect from democracy, some (like Musharraf) were more successful than others.
Corrections:
Red: Musharraf didn’t “decide”, he was told to, by Saudi Arabia, and I don’t think he “promised to do Allah Allah”.
Blue: Uncle SAM told Musharraf to establish democracy
Green: Zardari leaving for Dubai for “Allah Allah”, yeah sure
Purple: Mush could’ve earned some respect had he prosecuted him after Dogar took over, but seems like the charges were not enough for “suspension” or were false charges.
Where have you seen me praising Zardari? Or is it one of you abuses as usual without any substance? Recently (few days back) I wrote in Jang Viewers’ forum: You can see what I believe of Zardari or Nawaz (my post is 6th from top).