KARACHI: A meeting between the brokers and stakeholders with the Finance Minister Dr Abdul Hafeez Sheikh on Friday morning was said to have agreed to consider the “recommendation of putting in place a market support fund, keeping in view the attractive valuations,” a press release issued in the evening by the PSX stated.

Although the news of the meeting came after the closure of the market when panic selling saw the index spiral down by a massive 805 points (2.4 per cent) and close at over three-year low 33,971 points, the discussion of a support fund caused a great deal of excitement with traders and brokers speculating on the amount of the bailout package—between Rs17bn to Rs20bn, but no official confirmation was available for the amount as being rumoured in the media.

The support fund was stated to be managed by the National Investment Trust (NIT). But the PSX presser did not mention any such details.

The delegation identified various measures for strengthening the capital market. “They suggested that the proposed draft of Listed Companies (buyback of shares) Regulations 2019 be approved on priority and the limit of 10 per cent on treasury shares should be enhanced,” PSX stated and added that the delegation also proposed to resolve the present issue of ready futures transaction at PSX which was also hurting the market volumes.

The exchange asserted that the finance minister took note of all suggestions positively and assured the delegation of the government’s full support and cooperation.

The delegation comprised Bashir Jan Mohammad, Arif Habib, Aqeel Karim Dhedhi, Ali Jamil and chairman PSX Sulaiman Mehdi. Hafiz Sheikh was accompanied by the chairman FBR Syed Shabbar Zaidi and Adviser to Ministry of Finance, Dr Khaqan Najeeb.

Meeting with SBP chief

In his whirlwind visit of the financial markets on Friday, the finance minister also met with officials of the State Bank of Pakistan. The participants of the meeting included SBP Governor Dr Reza Baqir, PSX Chairman Sulaiman S. Mehdi; Basheer Jan Mohammad; Arif Habib; Aqeel Karim Dhedhi and Munir Kamal.

The central bank did not disclose what transpired at the meeting and participants when contacted declined to divulge any information saying that the SBP governor had requested to keep the meeting as “just a courtesy call”.

But a person at the stock market who seemed familiar with the issue stated that he believed the discussion related to the SBP’s role in establishing a market support fund.

The predominantly larger fraternity of stockbrokers at the meeting was also reckoned to have expressed their concern to the governor SBP on the rapid devaluation of the rupee and expected further tightening of the monetary policy, which could hurt the profitability of listed companies.

Published in Dawn, May 18th, 2019