SECP reviews PSX situation after third halt in a week

A team of Securities and Exchange Commission of Pakistan (SECP) led by the Chairman SECP and Commissioner(SM) held a detailed meeting with the CEOs of Pakistan Stock Exchange, National Clearing Company and Central Depository Company (CDC) on Friday to review and discuss the stock market situation after the market was halted for third time this week. The meeting also discussed risk management and business continuity. The index based market halts were triggered three times during this week. This cooling-off period gave an opportunity to investors to align their trading strategy and collection of margins by the Clearing Company. The participants of the meeting affirmed that risk management system was functioning efficiently and margins were being collected timely. The market operations are running smoothly as a whole. The CEOs further apprised that their business continuity plans and disaster recovery setup was in place based on SECP’s earlier instructions. The chairman SECP emphasized on conducting drills to ensure remote operations of trading, clearing, settlement and custody services while allowing remote access of market participants to such systems in case onsite operations or physical access was impacted. He also suggested adoption of further preventive measures against spread of coronavirus. The SECP advised CEOs to remain vigilant, continue to provide uninterrupted access to market participants and ensure effective risk management while maintaining actively engagement with their boards of directors and committees for close coordination. It is pertinent to mention here that a few minutes after markets opened, trading was halted at the stock exchange for the third time this week after the KSE-30 index fell 5.96 per cent to 15,039.17 points. When trading stopped, the KSE-100 index was down 1682.96 (4.68pc) to 34,273.73 points. A trading halt applies to the market when the large cap KSE-30 index falls beyond four per cent for a period of five minutes or more. The market witnessed a spillover of the same panic selling seen in the past few days because of demand compression from coronavirus. Earlier, a media report revealed that foreign investors had pulled out almost one-sixth of their investments, usually referred to as hot money, in treasury bills T-bills during the last three weeks as they jump to safer bets to mitigate risks in the aftermath of coronavirus pandemic.