January 30, 2003	Thursday	Ziqa’ad 26,1423

KARACHI, Jan 29: The Karachi Stock Exchange on Wednesday said that contrary to some media reports, the market fall last week was not due to any problems relating to capital adequacy requirements of a few brokers.

According to press release, Managing Director, Moin M. Fudda claimed that the management had been closely monitoring all risk management measures throughout the movement of the market and all systemic measures were in place to ensure that trading and settlement proceeded smoothly.

He also acknowledged the members cooperation in immediately meeting exposure and capital adequacy requirements, where needed. The KSE stated that the “market had changed direction from bullish to bearish last week, when badla rates climbed as new unaware investors flocked into the market after realising in astonishment the gains capitalised by investors who were in the market since the beginning of 2002.” It said that those unaware new entrants at the KSE bought at higher rates and in multiples of their own financial strengths, on the back of carryover transaction market which raised the badla rates, causing market to track back.

MD, KSE, stated that the market direction was not in the control of the management. “Whichever way the direction of the market progresses, management ensures that mechanism of the systematic procedures are followed through without panic and chaos,” the KSE stated, concluding that the 30.20 points drop in Index on Wednesday was also due to market forces that kept up the pressure on for the bears to hold strength.