KSE mulls easing cap on shares trade

KARACHI: The Karachi Stock Exchange (KSE) is likely to increase the buying and selling of single stocks in one order to 100 percent as the current ceiling has capped trade volumes after manifold raise in share prices, sources said on Wednesday.
The management of the country’s main bourse is considering to revising up the KSE automatic trading system (KATS) order limit, which presently is 500,000 shares or Rs25.00 million (whichever is lower) against each offer at a time, an announcement said.
“We have received several suggestions from members and clients for an upward revision in the limit as share prices have significantly increased,” said Sani-e-Mehmood Khan, general manager market development at KSE. He said the management may take the decision in the next board meeting due on 12 February.
Market sources said the management may expand the limit by 100 percent to Rs50 million or one million shares. The existing order limit was fixed in the late 1990s.
Stock members and clients are demanding the limit expansion, which has restricted the buying/selling capacity in the wake of rise in share prices.
In last 15 years, the KSE 100 Index surged 3,637.11 percent, 33,614.00 points.
Giving an example, Khan said in 1999 one could have bought 312,500 shares of Pakistan State Oil (PSO) and would not have breached the maximum order limit of Rs25.00 million. But, today buying of 63,694 shares of PSO hits the maximum value mark because the company’s share price has soared 391 percent in the past 15 years.
Similarly, the buying capacity for Engro shares has been weakened to 84,502 shares from 271,739 shares in this period. Further, one can now purchase only 65,445 shares of Pak Oilfields against 271,739 million shares in the past. ICI’s share order limit is cut to 49,801 as compared 500,000 earlier. Same is the case with the MCB (to 74,692 from 500,000) as well as Lucky Cement (46,588 shares versus 500,000 shares).
Before further revision, the Karachi Stock Exchange management sought suggestions on revision from mutual funds, TREC holders, individual clients and other entities.