Tuesday, November 6, 2007

Karachi Stock Exchange: KSE’s black Monday — heaviest ever single-day decline

Reporting for The Dawn, Dilawar Hussain could grow on one.

The Karachi Stock Exchange index of 100 shares plunged by 635 points or the maximum of 5 per cent on what many investors thought was ‘black Monday’ for the market. That was the biggest single-day decline in the history of the exchange beating the previously heaviest fall of 548 points recorded on June 14 last year.

Traders said that everyone expected the market to open on a bearish note following developments on the political front over the weekend. And the market moved between an acceptably narrow band of 230 to 300 points decline until midday when all hell broke loose.

The rumours of change at the head of the government spread like wildfire and nervous investors started to throw away shares at ridiculously low prices. When the dust settled at the end of trading day, a cool sum of Rs186 billion ($3.2 billion) had been washed away from the market capitalisation.

...So, should the KSE Board or the frontline regulator -- the KSE management -- has moved in to calm the investors’ fears. “We cannot be expected to comment on rumours,” says Shaukat Tarin, the chairman of the Board of Directors of KSE, adding: “If we were to do that, we would be doing just that and nothing else”....MORE
HT: Passport (link below)