PSX to explore further enhancement in circuit breakers to 10% in a phased manner

November 18, 2020 (MLN): Pakistan Stock Exchange (PSX) is exploring the possibility of further enhancement in the circuit breakers from the existing 7.5% to 10% in a phased manner along with the introduction of 2nd level of index-based market halt at 7%. Circuit Breakers (CBs) to increase 0.50% after every 2 weeks and once the level of 10% is reached, the second level of the market halt to be implemented upon 7% move of KSE 30 index.

To recall, in January 2020, the enhancement of scrip-based Circuit Breakers (CBs) was implemented in a phased manner along with the introduction of an Index-based Market halt. CBs were enhanced from 5% to 7.5% in a phased manner and a market halt was implemented based on the KSE 30 Index move, initially at 4% and then increased to 5%. This implementation contributed to overall discipline in the market and so as an improvement in the trading volumes as a result of the enhanced day's price range. Furthermore, this implementation is well aligned with the Global practices with an added benefit of better price discovery.

In this regard, PSX would like to engage with market participants through initiating a consultation process on the above-stated implementation. All market participants are therefore requested to share their initial feedback on the above proposal at [email protected] by November 25, 2020.

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