MTS ‘rumours’ hit KSE to restore investors’ confidence | Pakistan Today

MTS ‘rumours’ hit KSE to restore investors’ confidence

KARACHI – The rumors are hovering over volatile Karachi Stock Exchange (KSE) that the government is all set to make the long-awaited Margin Trading System (MTS) operational by the next week at the country’s largest bourse. “The Margin Trading System to be operational from March 7,” sources disclosed and said that the Federal Finance Minister Dr Abdul Hafeez Sheikh would be formally launching the leveraged product on coming Monday during his maiden visit to Karachi bourse.
Initially, there was a buzz that the finance minister was due at the KSE on March 14, which now, however, had changed into March 7. “The finance minister would visit and announce the margin trading on March 7,” confirmed an investor at the KSE. The market observers, however, view the news as a baseless rumor spread by the “big market players” to restore investors’ confidence in share trading at the KSE. It was last Friday when factors like the PML-N’s expected announcement on parting ways with the PPP-led coalition government in Punjab, an expected surge in oil prices on the back of Middle Eastern unrest and the Pak-US standoff on Raymond Davis, shattered the investors’ confidence at the local bourse.
Witnessing “panic selling” the KSE-100 benchmark had tumbled by 2.74 percent or 315.74 points to close at, what the market observers said, six-month low of 11,223.52 points. “Talks of Margin Trading System seem to have an aim to give the market an upward boost through attracting the cautious investors,” viewed an observer. The sources at the KSE, however, dispelled the impression. They said the MTS had nothing to do with the recent market crash.
“The toots of Friday’s market crash could well be traced in causes, including the PML-N’s parting ways with government (in Punjab) and the government’s lingering dispute with America over Raymond Davis,” sources said. Sources, however, confirmed that the big brokers were prone to play their part in controlling the volatile stock market. “You would always find inside trading by the big brokers,” they added.
When contacted a spokesman of Securities and Exchange Commission of Pakistan (SECP) refused to confirm March 7 as a date of operation for the much-awaited leverage product. “No I can’t confirm it… we have already issued a formal statement in this regard,” the spokesman told Pakistan Today from Islamabad.

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