January 15, 2020 (MLN): The Pakistan Stock Exchange (PSX), earlier in December, had decided to enhance the existing Circuit Breaker of 5% or Rs. 1, whichever is higher, by 0.5% after every 15th day till the time the circuit breakers reach the level of 7.5% or Rs. 1, whichever is higher.
In this regard, the PSX has issued another notice containing a schedule for the fortnightly increase in Circuit Breakers, which is as follows:
Price Against (Rs.1)
20th January, 2020 (Monday)
5.5% or Rs. 1 whichever is higher
04th February, 2020 (Tuesday)
6.0% or Rs. 1 whichever is higher
19th February, 2020 (Wednesday)
6.5% or Rs. 1 whichever is higher
5th March, 2020 (Thursday)
7.0% or Rs. 1 whichever is higher
20th March, 2020 (Friday)
7.5% or Rs. 1 whichever is higher
The notice also comprised of information regarding market halts, stating that the introduction of index-based market halts would facilitate in managing the risk as market participants respond to systematic factors affecting securities across many sectors. Imposing such halts on index movement would allow an adequate cooling-off period for investors to assess the market.
The Exchange will apply an index-based market halt in case KSE-30 index 4% either way from its opening index value.
‘Once circuit breakers reach the level of 7.5% or Rs.1, whichever is higher, index-based market halts shall only be applicable in case KSE-30 index moves 5% either way’ the notification said.
In case the KSE-30 index continues to trade 4% or 5%, as applicable, above or below its opening index value for consecutive 5 minutes (during market open state only), the trading in all securities shall be halted for 45 minutes. Upon imposition of a market halts, the following measures shall be taken:
- All equity and equity-based derivative markets shall be suspended.
- The market shall have a five (05) minutes pre-open before its re-opening.
- NCCPL shall collect Mark-to-Market losses from its clearing members as per its regulations.
- Only those BCMs/NBCMs shall be allowed to trade after the resumption of trading for that day which has deposited the required margins with NCCPL.
- Provided that the market halt shall not be applicable in case the KSE-30 index moves beyond 4% or 5%, as applicable in the last 1 hour of the market.
Once the Market Halt triggered on the intimation of Exchange, the Mark to Mark (MTM) Losses shall be determined by the Company on the basis of last executed price during trading hours on a trading day.
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