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KSE and CFS management stealing public money to protect biggies,

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   Naveed Yaseen
Thursday, December 25, 2008 06:09 PM 
Reply: >
This is getting ugly now and no one in media is criticizing this theft.

The actual business of CFS institutions, at least in CFS role, is to provide LOANS for margin financing. Its not their business to BUY AND HOLD SHARES, that also at un-appraised prices after more than 100 days closure of market.

CFS financers are mostly public money institutions. Why are their managements buying (or being forced to buy) these overpriced shares by Rs 4 billion public money.

If these shares are at fair price, or if their defaulting brokers are so dear to KSE board or CFS managements, they should buy these shares themselves. Just don't steal public money.
Adel, Saudi Arabia replied on Thursday, December 25, 2008 06:39 PM 

Mr. Naveed, you are right, in Pakistan every one is doing by his own especially the brokers are playing with the money of other people by selling and purchasing their shares without their information. By this way they are becoming rich and no one is asking them how they are doing so.
Jameel replied on Thursday, December 25, 2008 10:08 PM 

I think this step has been taken to save system and save Banks otherwise CFS Brokers will simply default and fargile Banking system will not be able to sustain the load, And once Trust of Banking system is lost then it is a viscious cycle which will not stop, 2ndly Govt had voilted the rules by flooring stock market, Investors had to lose this way or that way,
In UAE Dubai Govt is also trying to pass the realestate loss to individual investors and small developers, and is trying to save the system and big names like Nakheel and Emmar which are signs of Soverinity of Dubai Govt.
In US same strategy is being used by giving money to Genral motors and Citi Bank and other big insttutions but not to small investors who lost the money.
FmLahore replied on Friday, December 26, 2008 05:35 AM 

Unlike in the USA, where mostly banking and investment companies are being 'bailed out' on tax payers expense, the situation in Pakistan is a little different. The companies which are being 'bailed out' in Pakistan are actual manufacturing and production concerns. Perhaps a couple of banks are also being saved, but all other are big caps. In the USA all the money being used is actually going down the drain.

Also worth mentioning the price at which the 'buy and hold' is being performed is almost 60% off the highs. Granted that is not a good criteria to determine the existing value of the companies, a quick glance at the financials of the companies indicate that they are reasonably close to their 'normal' worth.

The reason this 'normal' worth is not being price-discovered nor exploited by investors at large is the lack of political stability, lack of cash liquidity and the selling pressure of foreign funds/et.al. who generally shoot first and ask question later.
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