http://www.bloomberg.com/apps/news?pid=20601087&sid=aDYwCNHYC214&refer=home Pakistan Stock Trading Falls to 10-Year Low After Support Plan By Pooja Thakur and Farhan Sharif Enlarge Image/Details July 11 (Bloomberg) -- Pakistan stock trading fell to the lowest level in a decade after regulators introduced measures to halt a two month slump that caused the benchmark Karachi Stock Exchange 100 Index to fall 29 percent. Trading slowed 92 percent since the Securities and Exchange Commission of Pakistan limited daily share declines to 1 percent a day on June 24. Fewer than 5.35 million shares changed hands on the Karachi Stock Exchange July 4, the lowest since May 26, 1998, according to data compiled by Bloomberg. Regulators will review today whether the curbs are needed after the exchange announced a 50 billion rupee ($702 million) fund to buy stocks after the close of trading yesterday. While the limits stopped Pakistan stocks from tumbling, they also drove away fund managers concerned about an exchange where rules change overnight. ``If investors realize that there will be regulatory interventions in the normal functioning of the market, they will always be reluctant,'' said Najam Ali, who manages the equivalent of $547 million in Pakistani stocks and bonds as chief executive officer of JS Investments Ltd. in Karachi. Regulators banned short-selling, narrowed the limit on declines from 5 percent and doubled the cap on gains to 10 percent, in measures announced late June 23. Short sellers borrow shares and sell them, hoping to replace the stock at a lower price and pocket the difference. The curbs were introduced after the Karachi Index fell to a 15-month low on concern that the ruling government coalition would collapse because of disputes about judicial appointments and the fate of President Pervez Musharraf. Zero Trading A total of thirty-two of the 100 companies in the benchmark index had zero shares traded yesterday. Turnover in MCB Bank Ltd., Pakistan's second-biggest lender, fell as low as 14,600 on July 4, compared with the average 3.9 million a day over the past year. Fund managers are concerned about the ``many geopolitical hurdles in the region which can destabilize the markets and thwart outside investment,'' said Steven Santiccioli, who holds $85 million of Pakistan stocks among securities he helps manage at Northern Trust Global Investments in New York. Officials from the commission will meet with the Karachi, Lahore and Islamabad stock exchanges today to review the rules, the regulator said in a statement July 8. The stock buying fund, which will be managed by state-run National Investment Trust, is likely to be introduced in two weeks, according to a statement from the Karachi exchange yesterday. National Investment Trust, Pakistan's biggest fund, manages 84.3 billion rupees in stocks. ``The fund will definitely help the market sustain the pressure,'' stock exchange board member Shehzad Chamdia said in an interview yesterday. Sipping Tea Trading on the 50-year-old bourse in Pakistan's commercial capital this week ranged between 12.7 million and 52.4 million shares, down from a daily average of 225.9 million over the six months ended June 23, the day before the rules took effect, according to data compiled by the exchange. The brokers left in the largely deserted trading hall sit with their backs to their screens, chatting and sipping tea. ``It's like we're on holiday here,'' said stockbroker Haji Ghani Usman. ``It's become difficult for us to pass the time.'' Stocks plunged earlier this year because Asif Ali Zardari, co-chairman of the Pakistan Peoples Party, the biggest group in the ruling coalition, and former Prime Minister Nawaz Sharif have failed to resolve differences over how to reinstate judges dismissed by Musharraf. The leaders also differ over how to remove the president and whether the former army chief should stand trial. `Never Good' ``Trading bands are never a good idea,'' said Howard Schwab, who helps manage about $4 billion in assets worldwide at Driehaus Capital Management in Chicago. ``They simply work to stall the appropriate scenario from transpiring, and Pakistan is no different.'' Driehaus sold its 1.2 million shares of MCB Bank ``in response to the deteriorating inflation and political conditions in Pakistan,'' Schwab said. Foreign investors slashed their spending on Pakistani stocks to $62.2 million in the 11 months ended May 31, from $1.76 billion a year earlier, according to data compiled by the central bank.