ISLAMABAD (NNI): In the light of government’s directions, Federal Investigation Agency (FIA) has decided to launch a crackdown against dollar hoarders as well as those involved in Hawala Hundi business.
As per sources, the authority sprung into action and constituted six teams against all hoarders who were selling the greenback in black and other people who were doing Hundi business.
All teams would be headed by assistant directors. Sajid Ameen, Tariq Masood, Aijaz Ahmed, Riyaz Khan, Rana Haider, and Rana Shehwaz would supervise the teams which would comprise four members each.
Teams would present their performance report on daily basis, sources added.
A few days earlier, taking the notice of the devaluation of rupee against the US dollar, Prime Minister Imran Khan ordered to launch a crackdown against money changer companies selling dollar above market rate.
The US dollar reached a new record high of Rs150 in the interbank market on Friday morning.
As the rupee continues to devalue against the US dollar this week, the greenback gained another Rs3 in the interbank market to touch the highest peak.
It may be noted here that the Pakistan Tehreek-e-Insaf (PTI) government has accepted the long outstanding demand of stockbrokers to constitute a fund for stabilizing the stock market.
Adviser to Prime Minister on Finance Abdul Hafeez Shaikh accepted the proposal to form the fund at a meeting with the Pakistan Stock Exchange’s (PSX) board of directors and senior stockbrokers.
Although the meeting participants did not discuss as to what should be the size of the fund to prevent a free-fall in the stock market, some of the stockbrokers said the size of the fund would be around Rs20 billion.
“The meeting did not discuss the size of the fund,” a well-informed stockbroker told at the end of the meeting.
“It all depends on the government assessment as to how (much) funding is required to stabilize the stock market,” he said. “The fund is expected to be set up by early next week, then people would come to know the actual size of the fund.”
State-owned National Investment Trust (NIT) would manage the fund and inject liquidity into the PSX. “The fund would most probably be used to buy shares of state-owned companies listed at the stock market,” he said.
To recall, the then government in 2008 established a similar fund and helped stabilise the stock market. NIT had managed and invested the fund into shares of state-owned companies, he said.
“The government had formed an Rs20-billion fund at that time. NIT invested only Rs17 billion out of that and earned a net profit of Rs20 billion in the next four to five years,” he said.
The PSX benchmark KSE-100 index lost over 900 points in intra-day trading during Friday’s session. Late buying helped recover some of the losses.
However, the index closed at a 38-month low of 33,166.62 points with the day net drop of 804.50 points, to 2.43%.
Another source said the adviser to PM was so keen to address issues to prevent free-fall at the stock market.
“He (Shaikh) kept asking the meeting participants what are the other issues forcing market to go down and kept issuing instructions to authorities concerned to address them on phone during the meeting,” he added.
The PSX said in a press statement that a delegation of leading businessmen and brokers comprising of PSX Chairman Sulaiman Mehdi, Bashir Jan Mohammad, Arif Habib, Aqeel Karim Dhedhi and Ali Jamil met Dr. Abdul Hafeez Shaikh along with Federal Board of Revenue Chairman Syed Shabbar Zaidi and Adviser to Ministry of Finance Dr Khaqan Najeeb in Karachi to discuss the overall macro-economic situation of the country and its impact on the capital markets.
Considering the present depressed market sentiment, the delegation suggested various measures for strengthening the capital markets.
They suggested that the proposed draft of Listed Companies (Buy Back of Shares) Regulations, 2019, be approved on priority and the limit of 10% on treasury shares should be enhanced.
A stockbroker explained companies listed can buy back their own shares keeping in view the current situation as per prevailing laws. However, some of the regulations make it so complicated for companies to buy back their own shares.
The regulations were including taking approval from Extraordinary General Meeting (EOGM) and lender’s approval to buy back the share. “Stockbrokers requested Shaikh to soften such regulations in the new Buy Back regulation,” he said.
“It is global practice that companies buy-back their own shares in stock market during crisis times. The exercise is held to increase confidence level among investors community,” he said.
The PSX statement said the stockbrokers also proposed to resolve the present issue of ready futures transaction at the PSX, which is also hurting the market volumes.
“The finance minister took note of all the suggestions positively and assured the delegation of the government’s full support and cooperation. Various other measures relating to market reforms were also discussed,” the PSX statement added. NNI