When Trading Stops Being Fun: Riots at the Pakistani Exchange

Pakistan is busily putting down riots at its stock exchange. After leading the world over the past decade, soaring by almost a factor of 10, it has dropped 35% since April, and traded down 15 of the last 18 days.

As usual, people got a sense that markets would always go up, and when they found out otherwise they reacted like kids who had their Wall-E toy taken away. They smashed stuff, shouted, and generally demanded the government do something about it. Aiding and abetting things, of course, have been Pakistani regulators, with a rule (until recently) that equities could never go down more than 1% a day. (Sound familiar?)

Check this (Reuters) picture of investors smashing through a door at the Karachi exchange, and then the following color from Bloomberg:

In Karachi investors today broke windows, threw plant holders in the parking lot of the building, burned shareholder statements and at least one protester was injured, prompting intervention by police and the paramilitary. Investors were also protesting outside the Lahore and Islamabad stock exchanges, Geo Television reported.

"We demand that all stock prices be frozen at current levels,'' said Kauser Javed, who heads the Small Investors Association. "People have sold their assets in the last 15 days to meet payments and if things continue this way, you will start hearing of suicides. The regulators always favor big brokers and investors.''

With potted plants flying outside the Karachi bourse after this stock crash, it reminds of a favorite adage: Trading stocks is fun, until someone loses an eye.

More here.

Comments

[Florin]

Dumb mob. Instead of gambling on the stockmarket, they should have bought gold

[bm1087]

The major U.S. and European exchanges will continue to be the de-facto standard due to inherent stability. Imagine those empty threats of shifting commodity trading offshore due to increases in U.S. regulation. Yeah right.

[bearfund]

brn1087, oh, the old "it can't happen here" thing. Right. I've heard that one before. Rule 1: you are not special. And what dleuwer said. The bigger the returns elsewhere and the longer they go on, the better gold looks. Central banks, regulators, the government, and even the markets can and will lie, lie, lie. But gold cannot be fooled.

[captbob]

2-similar articles deserve 2 similar comments:
Should have sold nuclear technology to Iran!! oopps-scuse' me they did!

And this bunch of Muslims is gonna help us toss that other bunch of Muslims--(al queda)--out of their country--sure they are.

I like the way they're taught to renounce violence. Can't they just stone a few stock Brokers in the public square, like us civilized Westerners?? They can't throw them under the bus, the passengers would fall off the roof.

[adan]

re: "As usual, people got a sense that markets would always go up, and when they found out otherwise they reacted like kids who had their Wall-E toy taken away." -

who do these people think they are? the specially designated dealer brokers in our own country?!? :-)