Munich Personal RePEc Archive

Overview of the Crash of KSE

Hanif, Mustufa (2022): Overview of the Crash of KSE.

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To great disappointment I must say that KSE was no more than a CASINO, infact it was even worse than a casino because in casino the liability of person is limited but here during crisis traders could even square their positions leading to bankruptcy and failures. This is the reason why foreign investors are not willing to participate in our market because we don’t rely on fundamentals and this is all due to our fault (the traders, government and the regulators).Regulators play a very fundamental role in our market and according to me these regulators are the main culprits behind the crisis because they have shake hands with market regulators ultimately creating a monopoly in market. When the market was in bullish trend the regulators set an easy flow of rules and procedures to boost and support the market but as market started declining the regulators acted as a policeman imposing more and more implications and rules causing a further decline in market.” What could one do if the gate keeper is self is a thief?”

After the unfortunate decline witnessed in mid March, it is imperative that the investors preserve and retain strong positive economic fundamentals intact. This can only be done by taking clear cut steps on strict risk management issues concerning future liquidity and price sensitivity issues. At this point, investors must heighten concern on speculative moves, and the regulatory authority as well as the management of KSE should insure reforms that limit such moves. Opportunity to invest in future on a margin of 10%, implementing rules without prior notices, eleventh hour decision and investments, retrieval of information by big brokers through CDC …These all factors are also to be taken into consideration for further avoid such a catastrophic feature of the past to re-emerge.

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