KSE Ransacked

Yesterday a huge riot broke outside the Karachi Stock Exchange, the protest was by a large number of small investors who were facing problems due to the decreasing stock prices. One such news report from The News

The small investors, who staged a violent protest on the KSE ground floor on Thursday, demanded closure of the bourse for two or three days and cancellation of all trading deals done in the last three sessions.

The protest was staged in the backdrop of persistent heavy declines on the KSE for the last three months, especially during the last three weeks.During the said period, the market lost nearly 35 per cent or 5,463 points from all-time high of 15,676 points on April 18. During the same period, over Rs 1,598 billion fund was also pulled out of the market.

At around 11 am on Thursday, a number of investors started agitating outside the KSE building. They expressed their anger by throwing stones at the building. Later, they entered the trading hall and the administration block and indulged in ransacking.

Your comments and reaction to this event and other economical pressures facing our country

12 Comments so far

  1. Faisal.K (faisalk) on July 18th, 2008 @ 11:31 am

    I really do not think the members are to blame for any of this. The flight of foreign capital from these shores and out of the stock exchange is a result of stupid governmental policies and the overall inability to run this country. I myself have lost over 40% of my portfolio but there is no point breaking windows or closing the market, the forces of demand and supply have to be allowed to play themselves out come what may.


  2. bozz on July 18th, 2008 @ 11:58 am

    It’s time we grow up and start shouldering responsibility for our actions. Where did this government come from and who placed these sub-continental monkeys at the helm of affairs?

    Find the answer for that and you will identify the one responsible for this mayhem.

    As for those pelting stones, what better way of proving the evolution theory wrong. Pakis are still quagmired in the process of trying to evolve!


  3. obiwankenobe on July 18th, 2008 @ 1:28 pm

    Faisal, you are not alone. I have lost almost 40% of my portfolio and 80% of company stock options. 5 hours more to go before bell rings in NY and then there is another riot today :-( MSFT , GOOG , AMD and MER missed this afternoon so tomorrow it seems that I would lose another 5% but I am down not out and believe rationality would return but then "The market can stay irrational longer than you can stay solvent." so I hope just that is not the case.

    By the way I left the following comment few hours ago on pakistaniat.com so I would copy paste same here .

    The KSE is a evolving market and it is expected when there is a rapid decline. Portugal is down YTD 40% and Shanghai is like 50% down but we don’t see reactions there because the societies have learned their lessons in previous recessions/declines. I would suggest you to look at 1929 Great Depression and read what happened in US then .

    It is not wise to compare KSE with Dow or Nasdaq decline. There has been 36% drop in last 2-3 months for KSE and the point is that people don’t believe in system any more . They think it is manipulated and then you are never sure if these people are not hired by some fund managers[big brokers] to pressurize govt. to add some liquidity in market. They have hedge funds in US (more organized white collar crime) to suck govt to bail Bear Stearns, Fannie Mae etc at cost of tax payers money and in Pakistan we have these riots.

    I talked to few friends in Karachi who invested in KSE and every one just wants to get out, of course they are highly educated people but even then they believe the system is manipulated and I don’t doubt them. I am sure there is huge insider trading and govt. new rules are leaked to some people to make huge money. In 2005 few people of Shaukat Aziz Govt made billion dollar by manipulating market. Yeah BILLION dollar. Last Night KSE had special trading session from 7 pm to 830 pm to trade at ask/bid price of closing price and many investors did not know about that, I can imagine who were the people who took exit gate, can you ?

    So when there is no trust then these things happen. It wont happen in first world because we know that manipulation don’t exist on mass scale there and then they are good in while collar crimes. Were they Goldman Sachs traders at London desk who were spreading rumors about Bear Stearns in March ? At least that’s what ex CEO of BSC said yesterday ….

    I hope that govt does not bail out these investors and let people learn their lesson(I know its cruel for a common man) but you have to understand that Feds and Govt. can’t help beyond one extent and sooner rather than later “Efficient Markets” would prevail.


  4. mastqalandar on July 18th, 2008 @ 9:45 pm

    LOL,

    Juwaree Juwaa harney per hangama kar rahey hain….

    Jab juwaa jeet rahey they to barey khush they, abb harey to barbadee kaa ronaa ro rahey hain.

    Iss tarhaa to hotaa hai iss tarhaa kai kamon main.

    Guys in Karachi, how is the REAL ESTATE market these days? I badly want the RE market to crash :)


  5. obiwankenobe on July 18th, 2008 @ 10:29 pm

    mastqalandar, that is very pathetic. I am sure you are sitting some where out side of Pakistan and do no understand how does it feel when some one loses its all life savings. Most of the people who lost in KSE are the people were scammed so at least do not make joke of their misery.


  6. mastqalandar on July 19th, 2008 @ 1:03 am

    obiwankenobe,

    You must have researched all the investors to say ‘Most of the people who lost in KSE are the people were scammed…’.

    Every one who invests in stocks knows the stocks can go down too. If they were so sure about the health of the companies then they shouldn’t riot and just have patience.

    Their actions make them a laughing stock, what else you are supposed to do? cry for these people and tell them to burn more tires?

    If you feel so sad, why don’t you go to Karachi and donate your rest of the portfolio to these poor people. I bet this will really cheer them up…

    Ain’t Talk really cheap??


  7. obiwankenobe on July 19th, 2008 @ 3:58 am

    Mastqalandar my friend, may be you should take some course in psychology and/or sociology. You need to know that all the people do not think like you. Human minds are trained to think objectively but then all people do not get such training.

    There is a difference b/w investing in stocks and investing in company. I invest in company and of course I take loss some times but I can think objectively why my portfolio is going down. But most of the Pakistani people who put money in stocks were "told" that they could easily double the money. The KSE is strongly manipulated and given the projected growth rate, there should not be such decline theoretically but we all know that big fishes eat small fishes so that happened in Karachi. I am sure those big fishes are not burning tires.

    I did not say that you need to cry for these people but then you can at least show sympathy instead of laughing on them. I also said that govt. should not intervene to support market and let people learn lesson. I can’t help them but I can at least feel their pain and even if I can’t do that, I should not laugh at them.

    Regarding me moving back to Karachi and donating money, it is none of your business what I should do with my money. I so much wanted to invest in Karachi but there were only two options for me 1- Real Estate and 2- KSE. I did not opt for real estate because it does not help economy and I was not sure that I had grip over KSE so did not invest in it.


  8. Shamsi (shamsi) on July 19th, 2008 @ 11:05 am

    Investment is SAFE Only in Real Estate or Precious Metals


  9. faylasuf on July 19th, 2008 @ 2:56 pm

    even real state is not very safe, go for precious metals

    or currency

    yea annnnyy currency apart from our very own!


  10. guidinggod on July 19th, 2008 @ 5:57 pm

    Ummm…ALL markets are manipulated, in one way or the other. From Sabzi Mandi to Nasdaq. People lose money in them because they don’t fully comprehend the following, rather simple, principles:

    (a) Markets go up – and Markets go down…..and money can be made both ways.

    (b) Fund managers and market players will try and make money for themselves and their own clients, not the rest of the world. Thats their job. Dont follow recommendations blindly.

    If you are not equipped to profit either way, don’t get into it. Much better for you to hand over your money to a Principal-Guaranteed fund or the ilk.

    We don’t try and perform surgery on ourselves because we understand it requires years of training to get it right, and we might end up hurting ourselves. Yet a lot of people get into ‘trading’ equities and what not without real experience, knowledge etc. using their savings and money. Why?! If you want to earn money from financial markets, or want to supplement your income by trading, do the necessary hard work before going in.

    I do sympathize with anyone who lost their money in the recent KSE slide; living in a place where the public has been let down time and again by those in power, battling with rising prices etc, yeah, anyone would be lured by a chance to make a few extra bucks. But I urge people to try and understand why things happen in markets, like they do, how they can be identified beforehand and what ways you can employ to minimize losses and accentuate profits from these opportunities.

    I was so disappointed with what happened in March 2005 (the big crash) to the small fish in this market, that I began teaching what little I know of fundamental and technical analysis, free of cost, to several people – traders/investors/punters alike. I was blown away by the fact that 90% of them had bought or sold securities worth hundreds of thousands because of ‘tips’. Wtf?! That was 2005, though. NONE, not one, of those people lost any money this time around, and a few of them (who did not have ethical/moral hangups about shorting stocks) actually made good profits.

    Cheers.


  11. concerned on July 21st, 2008 @ 3:54 pm

    I am a little suprised that we have stopped blaming the govt for all our troubles.

    TM, MB, Doctor, Adnan, etc tum log sirf anti Musharraf thay kia? abb kia ho raha hai? isnt any one going to say something against the govt now? I thought you guys cared abt your country / city?

    Bloody hypocrites.


  12. mastqalandar on July 21st, 2008 @ 9:09 pm

    obiwankenobe

    Thanks for your advise, I will take some psychology/sociology courses.

    But who is more appropriate for those courses. The people who lost their shirts in KSE and ransacked the KSE or a bystander who didn’t gamble and didn’t burn the tires and didn’t accuse the govt for every thing?????

    Honestly I think your whole emotion was because I called stock market speculators as "gamblers" or even worse "Juaree"…. Lol, why does the word ‘Juaree’ sound worse as compared to ‘Speculator’. I really need to take a course in Psychology.

    Second thing, I didn’t ask you to move to Karachi. All I asked you to visit Karachi and have a first hand knowledge of the loosers. (ohhh wait, I shouldn’t call them loosers). I mean the people who lost the money.

    BTW, I think their request has some weight to it. The authorities do intervene when the stock markets go down drastically. Some times by halting the trading and some times by injecting more capital. Offcourse it happens in the developed countries.

    So dear obiwahkanobi, I don’t enjoy the misery of people but I do laugh at the gamblers who at the end of the game complain that the game was not fair because they lost the game.



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