ISLAMABAD, Nov 2: The Securities and Exchange Commission of Pakistan has decided to initiate a study into causes of Karachi Stock market crash in 2008.
The decision has been taken to devise strategies and plug loopholes that led to market crash. The crash is said to have swept off a huge amount of money and caused loss to investors.
“The 2008 crises had a long term negative impact on the market and the study is expected to help the Commission formulate policies to ensure adequate level of transparency and general developments of the capital market in Pakistan,” said a spokesman for the SECP here Friday.
The commission hired services Shamim Ahmed Khan, a former commissioner of SECP to conduct the study and it is scheduled to be finalised and made public by April 30 next year.
The study would also evaluate rational for placing a floor on the share prices of listed securities, which was imposed on Aug 27, 2008 and continued till Dec 15, 2008.
“All the crises are dealt with best of options, but it is generally not a tradition to conduct post-event studies to learn from the situation,” said Imran Ghaznavi, a spokesman for the SECP.
The study would also present a review of imposition of the floor on the share price in the market and relevant stake-holders.
The study would also examine whether the Central Depository Company (CDC) played the role of a frontline regulatory body of the depository system, the spokesman said.
Though, stock markets in country have experienced crises in 2000, 2002, 2005, 2006 and then in 2008 but only the last one has not been investigated by the regulator, possibly because there was not much of political pressure, as it followed international financial markets crash.
