KARACHI, Sept 25: The Karachi Stock Exchange announced on Thursday that it was engrossed in talks with a wide range of stakeholders on a comprehensive road-map to enable the market to return to normal trading parameters.

A meeting of the board of directors was scheduled to be held on Thursday to review the ‘floor mechanism’, which had been put into place by the exchange on Aug 28, effectively capping the index at the level of 9,144 points, after the market crashed by 41 per cent in four months between April and August and stripped some of the blue chip stocks of half their value.

The short announcement by the exchange on Thursday released early in the afternoon, unlike most decisions which come off after mid-night, the bourse avoided mentioning whether it was from the management or the board, or if by the board whether through a unanimous decision or split votes.

Analysts said that the announcement also posted on the KSE website should have mentioned those essential details, if nothing else, to silence the detractors who have been passing word around that some SECP-nominated members sitting on the board are unhappy with the decision.

The apex regulator, Securities and Exchange Commission of Pakistan (SECP), did not add a word to the KSE’s Thursday’s announcement, keeping itself aloof from the process as it has been doing so since the ‘floor’ was placed under the market fall on Aug 28.

SECP chairman Razi-ur-Rehman had told this scribe last week that he would discuss the ‘floor’ with the KSE, which he said was supposed to have been put for a “brief period” so as to give the market a “breathing space.”

What transpired in those discussions has not been made public.

Meanwhile, foreign investors have been expressing their displeasure over putting blocks in the way of “selling at any price” and some stock brokers, who deal with foreigners, have been complaining of their “harsh” tone and text in conversations as they demand a “free movement.”

The bourse further explained in its Thursday’s announcement: “Recent events in the global equity markets have further highlighted the need to develop an integrated package so that the Pakistani capital markets can operate in a stable manner.”It said that “key discussions” were taking place with the Ministry of Finance, the Economic Advisory Council and the Securities and Exchange Commission of Pakistan.

The bourse said: “The final outcome of these discussions will be reached shortly after Eid.”

The bourse acknowledged that all stakeholders, including the Karachi Stock Exchange, would like the market to return to normal trading parameters at the earliest.

“We expect this to happen within the month of October 2008,” the KSE concluded.

Analysts admitted that feverish attempts were being made by all participants in the lead of stock brokers to cobble together some sort of market stabilisation package.

The KSE was known to be in discussions with the SBP, the government, financial institutions and other participants.

Most analysts thought that given the risk to the collapse of not just the stock market, but the whole financial system, including the banks who were major financiers of equity trading, it was unlikely that the KSE would risk pulling the planks from under the floor until it was sure that the joint effort of all stakeholders in a “comprehensive market stabilisation package,” would prevent a crash.

A senior stock broker, who asked not to be named, said that a host of proposals were flying around and ideas from brilliant to bizarre were being discussed not only in offices but ‘iftar parties’, hosted by worried stock brokers and investors.