Pakistan stock exchange postpones floor removal

KARACHI, Oct 26 (Reuters) - Directors of Pakistan's main stock exchangedecided on Sunday to postpone the removal of a floor that has been propping upits index since August, an exchange official said.
The Karachi Stock Exchange imposed the floor at 9,144 points on Aug. 28,after a 36 percent fall from the beginning of the year on political uncertaintyand a sagging economy. The exchange board said on Oct. 14 the floor would beremoved on Oct. 27.

No date has been fixed for the removal of the floor.

The exchange's managing director told a news conference the floor wouldnot be removed until a support fund was in place.

"It is in our collective interest to return to our normal tradingparameters," said managing director Adnan Afridi adding that stabilisationmeasures had to be in place when the floor was removed.

The floor has stifled trade and the index ended flat at 9,182.88 pointson Friday.

The stock market regulator said on Wednesday it had approved a 20 billionrupee ($247 million) fund being set up by the government to support share priceswhen the floor was removed.

Afridi said the fund had been approved but authorities were working outits mechanics.

The fund would invest in nine state-owned entities, an exchange officialsaid on Friday, adding that a special session would be held on Saturday toenable the fund to buy stocks 12.5 percent lower than current prices.

But authorities postponed the special session on Saturday because of whatan SEC official described as some differences between the brokers and exchangeofficials.

Earlier on Sunday, the exchange directors held a meeting with the primeminister's top adviser on economic affairs, Shaukat Tarin.

Tarin has said he wanted to see the floor removed, but he told DawnTelevision earlier on Sunday, if the support fund was not in place, then apostponement of the floor's removal was an option for exchange directors.

The fund will invest in nine state-owned companies: Oil and GasDevelopment Co Ltd, Pakistan Petroleum Ltd , National Bank of Pakistan, PakistanState Oil , Sui Southern Gas Co Ltd, Sui Northen Gas Co Ltd, Kot Addu Power CoLtd, Pakistan Telecommunication Co Ltd and Habib Bank Ltd.