Archive for July 19th, 2008

On Thursday, media outlets reported that thousands of Pakistani investors, “enraged by the persistent decline in share prices,” protested on the floors of the Lahore, Islamabad, and Karachi, demanding a temporary closure of the markets. According to Dawn, investors at the Karachi Stock Exchange ransacked furniture, “pelting the glass doors and windows of the trading hall with stones and raising slogans against the government and the KSE management.” Investors reacted similarly in Lahore and Islamabad, news sources noted. The AFP reported, “The benchmark Karachi Stock Exchange (KSE) index of 100 shares shed another 279 points to close at 10,212 points, representing an 18-month low, about 36 percent down from an all-time high in April.” The news agency added, “The market is under pressure due to political uncertainty, a liquidity crunch and foreign selling, dealers said.”

Analysts fear this trend is likely to continue. Senior analyst Azhar Ahmed Batla told the AFP, “The institutional support has started, but the situation could last for some time because of deteriorating Pakistan-Afghanistan relations and tension on our northwestern borders.” According to the Daily Times, “On Wednesday, SECP and KSE officials had met institutional investors and discussed the possibility of Rs. 50 billion to help the market recover. There has, however, been little progress in this regard.” Nevertheless, the BBC reported that Pakistan’s main share index closed slightly higher on Friday, “breaking a run of 15 consecutive days of falls.” Despite this slight improvement, the fact that these declines resulted in violent protests is indicative of Pakistan’s much larger problems, [also see post on the riots over the power shortages]. Below, is video footage of the protests:

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