Why was the floor imposed?
The KSE-100 Index reached an all-time high of 15,760 on April 20, following market reforms and the privatization of state industries. However, surging global food and commodities prices, along with the effects of the global financial crisis, began to dent confidence, leading to prolonged losses at the exchange. The situation was exacerbated by a SBP decision to raise interest rates in May, following record inflation numbers. The market continued its downward trend, with investors attempting to burn down the KSE in July as share prices plummeted amidst political instability. News of a relatively peaceful transition to democracy led to a rally in early August, but this proved to be fleeting as shares plunged once again in the wake of poor macroeconomic conditions. On August 28, the KSE was ‘floored’, but by this date the index had shed nearly $37 billion since peaking. Nadeem Naqvi, CEO of the International Investment Company, says that managers were left with only two options at this po
