Pakistani stocks flat; waiting for floor's removal
KARACHI, Oct 8 (Reuters) - Pakistani stocks closed flat on Wednesday, hovering just above an artificial floor exchange that authorities placed under the benchmark index to halt a steep fall in values.
The Karachi Stock Exchange (KSE) board is expected to meet on Friday to review how long to keep the floor, imposed at the end of August, as trading has virtually dried up.
The KSE has asked the government to create a 20-30 billion rupees fund to pay off foreign portfolio investors who wanted to sell their holdings at a predetermined price by a certain date, and is awaiting an answer before deciding what to do next.
The KSE 100-share index closed down by just 2.75 points on 9,178.73 points with just 51,500 shares traded.
The index has fallen almost 35 percent since the beginning of this year and is down over 41 percent from its life high of 15,739.25 points in April.
The floor was established at 9,144 points to stop it falling further, but it has locked in investors who want to get out.
"Its become a routine now. Very thin volumes, almost no trade happening and very small margins," said Shuja Rizvi, director at Capital One Equities.
KSE director Sohail Diyala saw little option but to remove the floor, saying: "We can't continue like this."
Pakistani newspapers on Wednesday reported that Prime Minister Yousaf Raza Gilani has chosen former KSE chairman and banker Shaukat Tareen as his adviser on finance, raising hopes that he will reduce fears of a collapse.
Among the most traded companies, Southern Electric Power (SOUT.KA) was flat at 3.90 rupees, Dominion Stock Fund Ltd (DSFL.KA) was flat at 5.70 rupees and Unit Trust of Pakistan Large Cap Fund UTLF.KA was up 18 percent to close at 6.50 rupees.
(Reporting by Aftab Borka; Editing by Simon Cameron-Moore)
