KARACHI, Aug 17: The Chairman, Securities and Exchange Commission of Pakistan (SECP), Dr. Tariq Hassan would hold a meeting with the stock brokerage community either on Friday or Saturday.
Reliable sources suggest that the COT (badla) issue is likely to be resolved in the meeting. That would perhaps be the best thing that could happen to the despondent stock market, which on Wednesday saw a three-year low turnover of 36 million shares in the ready market.
The SECP chairman as also Commissioner (Securities market), Shahid Ghaffar would not pick up phones or answer text messages. All big brokers were also tight lipped about the upcoming event. But what is significant is that there appears to be a discernable thaw in the relationship between the SECP and the KSE.
Earlier in the day, a little over a dozen noteworthy stock brokers gathered at the KSE for a brain storming session on how to resolve the ongoing crisis. The emphasis was on ways and means of establishing a closer co-ordination with the apex regulator.
If the week-end meeting between the SECP and the KSE is able to arrive at a mutually acceptable solution to the liquidity problems, it would also dispel concerns of investors about what might lie ahead of August 26, the date on which badla had initially to be completely phased out through reduction of badla value on weekly basis.
But on July 9, “on the request of stock brokers and small investors”, SECP announced the suspension of badla phase out. The question that nagged a big chunk of investors was whether the suspension was up to August 26 or beyond. A market guru pointed out that the SECP Order had quite clearly stated that the suspension of phase out and cap on total COT financing at Rs12 billion was “until further orders”, which, he said, must mean beyond Aug 26.
That, therefore, being no issue, the upcoming SECP-KSE meeting was likely to arrive at -— or if already agreed upon in informal discussions —- disclose the figure in rupee terms, that both thought was needed to pull the market out of the liquidity crunch.
