Pakistan markets shut downgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Tuesday, 30 May, 2000, 16:16 GMT 17:16 UK
Pakistan markets shut down
The Karachi Stock Exchange plunged by nearly 15%
Stock exchanges in Pakistan have been closed because of concerns over the military government's attempts to make people pay taxes. The move comes a day after the country's main trading centre, the Karachi Stock Exchange, fell to its lowest level this year
There is a lot of uncertainty and individual investors are selling stocks in panic Stockbroker Sajjad Mankani Traders say the reason for the closure is because the large fall in the value of shares led to some brokers over-stretching themselves and buying stocks they could not afford.
"Several brokers have nearly gone bankrupt in the market's recent slide," said stockbroker Shuja Rizvi.
The markets are expected to reopen on Wednesday.
The 100-share Karachi Stock Exchange (KSE) lost 250.59 points or 14.91% in the past four days.
It was closed for the past two days because of fears that some members would not be able to meet their liabilities under weekly settlement day, which is on Wednesday.
Shopkeepers across Pakistan are on strike "Due to the continuous decline of the market, some of the major players refused to clear their payments to the members of the KSE which put them close to a default position," a broker told the AFP news agency.
The BBC's Owen Bennett-Jones reports that one broker was suspended because of defaulting on payments.
Traders said that other brokers would have defaulted as well but backers were found to clear their liabilities.
Dealers also said the market has weakened because of the government's tax drive.
"There is a lot of uncertainty and individual investors are selling stocks in panic," said broker Sajjad Mankani.
Shopkeepers across Pakistan have been taking part in a day of strike action to protest at the government's attempts to make them pay tax.
Pakistan's military rulers began a survey on Saturday to collect unpaid taxes owed to the government.
The move has been opposed by shopkeepers and small business owners, who say it will lead to corrupt tax officials extorting money from them
-- Martin Thompson (email@example.com), May 30, 2000