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| -Short Attention Span Theater- |
| President Bush to blame for crash of Karachi Stock Exchange |
| 2006-03-09 |
| Paks are blaming W for KSE crash Market crash JUST as the government was taking solace in the capital market emerging as one of the world's best performing in the wake of the Finance Ministry's mid-year review that found faults with almost every other sector of the economy, it lost a massive 821 points in two days. Market pundits hold President Bush's "unproductive" visit responsible for the crash, especially when seen in light of the notable pat on the back delivered to archrival India. Upon close inspection, there is a parallel of sorts to be drawn between the magnitude of the battering America's cold shoulder has dealt to the stock exchange and the air of concern it must have brought to Islamabad. It needs noting that while a positive response to Pakistan's desire for civilian nuclear energy would definitely have helped, it is the elusiveness of the Bilateral Investment Treaty after built-up expectations that ushered in the mammoth bear-hug. Interestingly, it is learnt that Washington did offer Islamabad a treaty, but on conditions on which it has only one such deal, that too with Guatemala. Therefore it is understandable why the government would not have been too willing to go ahead with such a venture. But as actions speak louder than words, and the place the US is putting Pakistan in, the KSE crash is a fitting albeit chilling example of how things can shape up if the former leaves the latter in the lurch once again. Those who remember last year's great crash and the authorities' subsequent promises that such uncertainty would not be repeated will be even more skeptical of the market now, especially small investors that lost big. Though the market recovered by 210 points on Thursday, the fact that panic selling evaporated market capital by Rs210 billion in just two days implies that structural anomalies persist. This happened when some stock market manipulators were hosting investment conferences for the Prime Minister on his current visit to England It is important to note that the government takes credit whenever the market delivers and disassociates it with the economic outlook when it does not. Rather than rely on an ad hoc jump-start system to deliver in the short-run, the government is advised to streamline institutions for sustained improvement. This holds true for its handling of almost all sectors. |
| Posted by:john |
| #5 It is important to note that the government takes credit whenever the market delivers and disassociates it with the economic outlook when it does not. Hmmmm. Right out of the Clintons' playbook. Take credit when thing go well and place the blame somewhere else when things are rotten. |
| Posted by: GK 2006-03-09 21:57 |
| #4 I guess the Bush visit had *something* to do with the crash - i.e. Musharraf felt the need to bolster his anti-Taliban credentials by launching an offensive in Waziristan, which became a little more involved than the markets were expecting. If he ever sorts the area out, I expect the markets will rebound. Because he'll be able to re-direct the troops that are currently tied down in the Northwest Frontier Province to prevent the kind of sectarian (inter-ethnic) violence that keeps occurring in the rest of Pakistan. |
| Posted by: Zhang Fei 2006-03-09 21:38 |
| #3 Well if the CEO moves on my suggestions, (rendition of AQ Khan to US custody, ban Madrassas, kill/capture Taliban and Al-Qaeda, clean-up the ISI, and a number of others) I might bump my recommendation to Accumulate. But until then, Pakistan's a Sell |
| Posted by: Danking70 2006-03-09 20:32 |
| #2 Bush took the pump handle home with him. They're right, blame Bush. Lol. |
| Posted by: .com 2006-03-09 19:22 |
| #1 A sudden drop in American aid money, perhaps? Al |
| Posted by: Frozen Al 2006-03-09 19:18 |