Pakistani Investors Stone Stock Exchange

"There has been some level of mismanagement by the authorities,” said Habib-ur-Rehman, who manages the equivalent of 6.5 billion rupees in Pakistani stocks and bonds at Atlas Asset Management Ltd. in Karachi. "This may be due to their misperception that they can prevent the market from falling. Investors have to learn to bear losses as they do gains.”
(emphasis added)

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This looks like an Onion parody — but its not!

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Karachi_385x185_370432ajpg200875760

Bizpakistan_370656a

Surprisingly, no one in Karachi blamed short sellers or rumors . . .

Pakistan investors stormed out of the Karachi Stock Exchange, smashed windows and cursed regulators after the benchmark index fell for a 15th day, the worst losing streak in at least 18 years.

"I have lost my life savings in the last 15 days and no one in the government or regulators came to help us,” said Imran Inayat, 45, a protester and a former banker who retired early and said he lost 300,000 rupees ($4,175) on the market.

Police surrounded the exchange after hundreds of investors stoned the building and shouted anti-government slogans. Securities and Exchange Commission of Pakistan, which imposed and then removed a 1 percent daily limit on price declines this week, had attempted to halt a slide that wiped out $30 billion of market value in three months, threatening to undo a 14-fold rally since 2001.

We better send SEC Chairman Cox to Karachi — he’ll stop the rumors and short selling pronto!

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Pakistani_stock_brokersKarachi_stock_xc

Bozorgi20080717135756609

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UPDATE: July 18, 2008 5:46am

More photos, via the NYT
Pstan650

Investors destroyed a door at the Karachi Stock Exchange in Pakistan on Thursday to protest slumping share prices.   

Pstan600

Tires burned Thursday in front of the stock exchange in Islamabad, Pakistan, as protesters vented anger over a two-week plunge in share prices. While Wall Street prices rose, Pakistani shares fell over concern about handling of the ailing economy.

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Sources:
Pakistani Investors Stone Exchange as Stocks Plunge
Farhan Sharif
Bloomberg, July 17 2008   
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVZ47MTtPsPY&

Furious investors trash Karachi stock exchange
Farhan Bokhari in Islamabad
Published: July 18 2008 03:00 | Last updated: July 18 2008 03:00
http://www.ft.com/cms/s/0/e6504c8e-5460-11dd-aa78-000077b07658.html

Pakistani investors attack bourses after share collapse 
Rhys Blakely
The Times, July 18, 2008
http://business.tim
esonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4354306.ece

Pakistani Bear Market Has Investors Raging in the Streets   
JANE PERLEZ 
NYT July 18, 2008 
http://www.nytimes.com/2008/07/18/world/asia/18pstan.html

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What's been said:

Discussions found on the web:
  1. njdoc commented on Jul 17

    I haven’t heard much about “privatizing” social security lately. Perhaps they can sell this idea in Pakistan.

  2. Bluzer commented on Jul 17

    These people want to be bailed out! Who do they think they are? Americans?

  3. simon commented on Jul 17

    Eat my shorts! Dude!

  4. Jon H commented on Jul 17

    The invisible hand was last seen requesting asylum at the US embassy.

  5. jag commented on Jul 17

    Jon H: Actually, it looks like the Pakistani government is more or less letting the market take its natural course, while it’s the US that’s trying to stop the invisible hand from doing its thing.

  6. Mean Mister Mustard commented on Jul 17

    The context, not mentioned here, is that Pakistan UNQUESTIONABLY is the kind of place that privitizes gains (for a coterie) and socializes loses.

  7. Steve Barry commented on Jul 17

    The main difference between Pakistani and US investors is the traditional garb.

  8. Roman commented on Jul 17

    Barry, when you put things like this up, it almost makes it seem like you feel those people are justified. The only reason they are not going crazy about short selling is because they don’t know what short selling is.

    ~~~

    BR: Justified? WTF ?!?

    Roman,

    I previously banned your IP address for the distinct honor of having posted the single dumbest comment I’ve seen. (Here: http://bigpicture.typepad.com/comments/2008/05/trouble-in-the.html#comment-form) You’ve met your prior match.

    No Soup for you. Come back one year!

  9. GerryL commented on Jul 17

    This looks like a job for the Plunge Protection Team.

  10. Maldoror commented on Jul 17

    There’s one perfect way to rid the world of all financial problems: eliminate money.

    Most other problems will disappear too.

  11. Jon H commented on Jul 17

    ” Actually, it looks like the Pakistani government is more or less letting the market take its natural course, while it’s the US that’s trying to stop the invisible hand from doing its thing.”

    It’s bad form to explain a joke, but my point was that these rioters are – though they may not know it – trying to attack the invisible hand – which, of course, is inherently absurd. Thus the target, the invisible hand, seeking shelter and protection from the mob.

    I could have picked any embassy, but the US came to mind. The US played no other part in my point.

  12. Todd commented on Jul 17

    Don’t those crazy Pakistanis know this is a buying opportunity?!!??!

    Where’s the Pakistani version of Don Luskin or Dennis Kneale to reassure them that the bears are wrong and everything is just peachy?

  13. Mark E Hoffer commented on Jul 17

    do 403(b) holders even know how to that?

  14. Scott Frew commented on Jul 17

    Corner of Broad and Wall tomorrow morning, 9:15. Bring pitchforks.

  15. Steve Barry commented on Jul 17

    I think I see Jerry Bowyer trying to keep the peace in the crowd.

  16. John F. commented on Jul 17

    I’d hate to see their reaction to a foreclosure notice.

  17. Donny commented on Jul 17

    Barry … that is absolutely CLASSIC. Thanks for brining it to my attention. Priceless!

  18. wunsacon commented on Jul 17

    Scott Frew, that’s a great idea for one of those “flash mob” events! (Could also organize in front of Tangelo’s place. But, that wouldn’t be in line with what you had in mind…)

    Steve Barry, great one-liner up at the top there!

  19. Greg B commented on Jul 17

    Where’s the ultrashort pakistani ETF?

  20. MexPat commented on Jul 17

    Now THAT’S the kind of market regulation I like. Give those people a few AK-47’s and they would really straighten everything out.

  21. JoJo commented on Jul 17

    Could you NYC people please get out on Wall Street and create some scenes like those? Need to shake things up!

    (I’d help but all the way out on the West Coast).

    ;-)

  22. sk commented on Jul 17

    Now, THAT’s what I excepted in MUMBAI on MLK day when the market dumped by 15% and circuit-breaker rules were triggered.

    Damnit – hartals, bandhs, stone-throwing, effigy burning, lathi-charges are part of the tradition of the sub-continent – but NOTHING, it was all quiet on the Mumbai front – the buggers have got too westernized – they all want bailouts now I suppose.

    Thank you Pakistan for showing the right spirit and keeping the traditions alive – no wonder you beat us at cricket – deservedly so.

    -K

  23. VJ commented on Jul 17

    Send Kudlow. He can explain to them that if they would just cut taxes for the wealthy, their stock market would go back up.

    It’s gotta work somewhere, eh ?
    .

  24. sk commented on Jul 17

    Separately, this has GOT to be a buying opportunity if you are of the contrary investing bent – except they are only down 25% YTD
    http://www.ksestocks.com/index.php?page=Interactive_Charts

    Sheesh, you get riots for a 25% loss YTD

    There are some Pakistani ADRs but they are .PK variety and volume is really low – no ETFs that I can see – they HAVE To be some stocks on the .L exchange but I can’t find any – besides it hasn’t dumped enough for me to treat this as a buy opportunity – but it HAS to be a classic contrary signal surely – beats the magazine cover indicator for sure.

    -K

  25. tomd commented on Jul 17

    This is what will happen in the US when our children and grandchildren wake up to what we have done to them financially.

    We debate the pros and cons of FNM/FRE bailouts, stimulus payments, mortgage bailouts, Iraq war, etc, etc.

    In fact, we are not willing to pay a dime for any of those things ourselves, we borrow the money and force our kids and grandkids to pay for them. Without having any say-so.

    Taxation without representation because we, in our self-indulgence, won’t tax ourselves to pay for these things.

    All debate about these issues is bullshit unless the debate includes the burden of our paying for the bailouts, wars, etc ourselves. Wanna see some reality in Paulson’s proposals: include “pay as you go” as part of the deal.

    TomD

  26. JAN commented on Jul 17

    I like the idea. The possibility of having their building stoned and set afire could make our CEOs more thoughtful.

    The man who lost his modest life savings will not get them back, but he has had a small satisfaction.

    Primitive folk; Us highly civilized sheeple just take it and take it.

  27. SausalitoMike commented on Jul 17

    “We better send SEC chairman Cox to Karachi — he’ll stop the rumors and short selling pronto!”

    THAT’S HILARIOUS, BARRY!!!

  28. Grodge commented on Jul 18

    Actually I’ve gained respect for the Pakistanis. At least they have the nuts to take to the streets!!!

    How do you say “Grab your pitchforks” in Urdu?

  29. Bob A commented on Jul 18

    these are the nice people that are hiding Osame in their mountains no? bummer dudes…

  30. Schmekel commented on Jul 18

    Bork, bork, bork. Why are they all dressed like chef’s?

    The unfortunate fact is that instability in the only country with nuclear weapons that has already had 1 coup is likely to be the impetus for a crash in our own markets.

  31. sk commented on Jul 18

    “these are the nice people that are hiding Osame in their mountains no? bummer dudes…”

    Jeez, these guys rioting are most likely Sindhis and have as much in common with the ones hiding Osama as a West Coast Liberal has with Ozark or Appalachian hill-folk ( Note the absence of the pejorative term).

    Here, read this :
    http://en.wikipedia.org/wiki/History_of_Pakistan

    -K

  32. AGG commented on Jul 18

    The invisible hand must have grabbed someone’s very visible gland; or maybe both of them.

  33. whispering_to_kc commented on Jul 18

    “”I have lost my life savings in the last 15 days … ” said a protester and a former banker who retired early and said he lost 300,000 rupees ($4,175) on the market.”

    His life savings from a banking career was US$4000? Where was this guy when the rising tide was lifting all boats?

    Or, is this what my life savings will be worth when the tide goes out over here?

    Has the FOX Business Channel or Kudlow run a piece on this episode yet? Will they? What caption would they run under the photos? “Pakistani investors celebrate gains with BBQ and campfires”?

  34. Jay commented on Jul 18

    If you look very closely at the third picture, you can see some naked short sellers causing mayhem and destruction.

  35. wunsacon commented on Jul 18

    Bob A, you’re a smart guy and know better. Or you should.

    Schmekel, who publicly supported the coup leader after it happened? And do you suspect a powerful country that:
    (a) establishes strong strong rapports between military brass (for training, joint exercises) and
    (b) publicly backs the coup leader, one of the secular generals,
    had something to do with it? In 25, 50, or 75 years, another generation of Americans may very well learn the US backed this coup (“for good reasons”) and then in all sincerity conclude “yeah, but that was back then, bro’ — our government wouldn’t do that nowadays”.

    Automated Idiot, did you repost Roman’s statement without reading the responses to it on the original page?

  36. wunsacon commented on Jul 18

    Schmekel, actually, I don’t disagree with your statement…

  37. Bluzer commented on Jul 18

    This is Karachi – so dem dudes are sindhis. The calmest ethnicity in a very excitable Pakistan. Hence what we are witnessing is a very rare occurence of ‘Sindhis gone wild.’ Enjoy

  38. rational commented on Jul 18

    He can explain to them that if they would just cut taxes for the wealthy, their stock market would go back up.

    You can only cut taxes if they were being paid in the first place. Rich people in Pakistan and India paying taxes? No sir, they got filthy rich by NOT paying taxes.

  39. Chief Tomahawk commented on Jul 18

    Where’s the Pakistani version of Don Luskin or Dennis Kneale to reassure them that the bears are wrong and everything is just peachy?

    After 15 down days in a row, they’re hiding in the mountains with Osama.

  40. Risk Averse Alert commented on Jul 18

    I think all the talk about “demand destruction” is being taken much too literally…

    Any word from the White House praising the American people for their far more dignified reception toward unwelcome passes up the back 9?

  41. Rock commented on Jul 18

    Nelson Muntz isn’t here so I’ll say it for him.

    Haw, Haw!

  42. Manto commented on Jul 18

    Actually the government did put a morotorium on short selling in Karachi a few weeks ago (along with some ridicolously low limit down rules). Obviously that does not work (surprise, surprise). As to the retard who thinks that because its Karachi – these rioters must be Sindhi – you are kind of clueless – lay off the wikipedia. Finally while KSE has had a huge bull market for the last several years and the country faces a financing crunch – dividend yields are pretty high and p/e’s are low – so rupee investors can probably find some good investments here.

  43. Jojo commented on Jul 18

    Furious investors trash Karachi stock exchange

    By Farhan Bokhari in Islamabad

    Published: July 18 2008 03:00 | Last updated: July 18 2008 03:00

    Investors upset over falling Pakistani share prices yesterday smashed the Karachi Stock Exchange’s windows during protests that led to scuffles between market traders and share owners demanding the temporary closure of the stock market.

    The KSE-100 index dropped by 2.7 per cent to close at 10,212.92. The index has plunged 35 per cent from a record high on April 21.

    “I am upset because I am constantly losing money and there is no one ready to help me,” said Naeem Jehandad, an equity investor in Islamabad, who said the value of his shares had halved in the past four months.

    “For me, this is just a murder for my economic future,” added Usman Khan, a lift operator who returned from the Middle East last year and invested his savings of Rs350,000 ($5,000, £2,500, €3,150) in the KSE.

    “There is so much uncertainty all around that it has crept in to the stock market,” said Shuja Rizvi, head of brokerage services at Karachi’s Capital One securities brokerage house.

    Last night a group of large investors and brokers set up an emergency fund to buy shares from small investors, many of whom were at the centre of yesterday’s violence. The Rs3bn fund was mainly aimed at preventing a recurrence of the unrest, analysts said.

    Razi-ur-Rehman, who chairs the securities and exchange commission, Pakistan’s stock market regulator, said: “If we can get rid of distressed investors, that would help to stabilise the situation. The intention is to have an orderly fall rather than an abrupt fall.”

    Full article:
    http://www.ft.com/cms/s/0/e6504c8e-5460-11dd-aa78-000077b07658.html
    =======================
    Now there’s a solution for Bernanke & Washington! Just buy out all the small investors in say Freddie, Fannie, Citibank, etc. and everything will be good again.

  44. bluestatedon commented on Jul 18

    “If we can get rid of distressed investors, that would help to stabilise the situation.”

    I think we’ve seen the new Gulag of the future… Social Darwinism applied to the investor class.

  45. Zo commented on Jul 18

    Pakistan Zindabad!!!!!!

    i’m so embarrassed…

  46. leftback commented on Jul 18

    Wow. Mind you Pakistanis riot easily, especially if there is a bad umpiring decision in the big match against India.

    No riots here, of course, it’s “the buying opportunity of a lifetime”, according to Dennis and Larry. “The market always goes back up”. At least, until it runs into Vince Farrell’s bottom.

    I am shocked at the level of complacency among the general US investing public. I mean, they have even seen this recently (2000-2003) but yet they all stayed long last summer. Will it take another 25% down from here before they panic and take their money out of the market? I suppose that is the point of capitulation, and marks a bottom. The real one.

  47. JoJo commented on Jul 18

    The only time Americans get that upset is when they can’t get Miley Cyrus tickets for their kids.

  48. Jon H commented on Jul 18

    If any Pakistani published the equivalent of “Dow 36,000”, his head is probably on a stick now.

    Would that we could do the same here.

  49. larry commented on Jul 18

    maybe this is what the government is afraid of…and why it keeps encouraging or allowing the FED & the Treasury to committ tax payer money to the fiancials that are collapsing. if our stock exchange dropped for 15 days, CNBC would be off the air!

  50. drunk commented on Jul 19

    Ah I admire those Pakistanis – they have guts and not afraid to show it. The Stock Exchange screws them, they take it out. That used to be the American way. But, somehow, the supposedly arrogant Americans lost their spines and guts. See, they got screwed by Bush, the Fed, Big Pol, Big Banks, Big Biz big time. So far, not even a raised voice. What a bunch of brain-dead cowards. No wonder the Iranians are cleaning the US clock.

  51. tiger sain mark commented on Jul 19

    hey i like you fellow in that difficult part of the world God will grant you his mercy, “hey chance to invest in africa (jtiger97@yahoo.com) get in touch limited opportunity”.

  52. Usman commented on Jul 31

    WOW STEVE BARRY HILARIOUS COMMENT!!! “Barry, when you put things like this up, it almost makes it seem like you feel those people are justified. The only reason they are not going crazy about short selling is because they don’t know what short selling is.”

    Well, I should clarify. You’re only hilarious if someone considers it funny that you made a statement that is wrong, arrogant, and racist.

    Let me guess you’ve never been to Pakistan or met a Pakistani trader. Pakistani’s have succeeded in finance all around the world, and it’s those same Pakistani traders who take advantage of their home market’s usually excellent returns as well.

    The average guy in the Pakistani street who is priveleged enough to have spare money to put into the stock market is also 99% of the time educated enough to know how it works. I live in Pakistan and our business schools turn out tens of thousands of highly educated graduates, and the amazing part is that I don’t know a single graduate who has not made boatloads of money even in his first few years, and that’s in Dollars and Rupees.

    Get a clue, and yknow what I think it’s much moreadmirable to see Pakistani’s scrambling on the street to protest the losses in their savings, rather than the average American who is scrambling to find larger loans to cover the interest payments on all their previous loans and credit card payments combined. Oh yeah, because the American savings rate is what, -1%?

    I guess Americans don’t freak out when they lose money, because it’s 101% borrowed, anyway.

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