This evening, SECP Securities & Exchange Commission of Pakistan came out and announced a stop to all badla activities. All those who have purchased shares on badla will have 22 days from today to liquidate their shares or to inject cash in their trading accounts to cover for the badla positions.
Obviously, people who buy shares on badla do not have deep pockets and look to make extra buck in a fast growing market. These people have now been told today by the committee appointed by SECP that they have only 22 days to produce cash to cover their positions, the first thing they will do tomorrow is to go to their brokers and sell all there badla holdings.
As it is badla was very costly, costing arms & legs, but the real test will come tomorrow morning when all of us will be queing to sell the unfortunate and supposedly loss making shares. Who will be able to sell their shares at the Floor levels is yet to be seen. My gut feel is that the KSE index may go for a couple of floor locks in the next couple of days shedding 400 to 500 points.
SECP should not have taken such a hasty decision. It should have slowly removed it if it was necessary at all. Time and again, we have felt that there is minimal or no support for small investors who take the brunt of such brutal actions. Though, I agree with market rising so fast SECP should have interfered to avoid any future calamity or disaster, removing badla in this way is totally out of order and uncalled for.
I sense that tomorrow will start an era of bleeding for small investors and stock accumulation by the institutions and big sharks. God Help Us!
Seems all pridiction are comming true....
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