The stock market has again taken a downturn and the KSE index as on June 16, stood at 1040.41 as compared to 1218,66 as on May 17. 1999. Aggregate market capitalisation stood at Rs.304.251 billion showing a reduction of Rs.22.775 billion as shown in the table below.

             General         Aggregate
              Index            Market
Year         Number       Capitalisation
         (Rs. in billion)
17.05.99    1218.66           327.028
24.05.99    1314.32           349.550
31.05.99    1185.24           319.394
07.06.99    1136.44           308.839
16.06.99    1040.41           304.251

Three leading DFIs, namely: PICIC, NDFC and Bankers' Equity Ltd. have suffered a setback in their bid to extend their operations as commercial banks in addition to existing long-term loan financing for industrial projects. The State Bank of Pakistan has practically turned down their applications for permission to set up their own commercial banks.

At present, the loaning programme of the DFIs practically stands suspended due to non-availability of funds. No foreign lines of credit or local Currency resources are available to them. The main job these DFIs are now doing is the recovery of their old loans extended when funds were available with them, many years ago.

In a last ditch strategy for survival, the three DFIs filed applications with the State Bank for permission to operate in the field of commercial banking. The State Bank is reported to have put certain conditions which are difficult for DFIs to fulfil. …