KARACHI-Best brains of the Karachi Stock Exchange (KSE), and Securities Exchange Commission of Pakistan (SECP) for the third consecutive day failed to break deadlock on various proposals and find a concurrent solution acceptable to both the regulators. A source inside the KSE Board said that the promise made by a recently appointed govt functionary to arrange funds in CFS market to help ease liquidity pressure in the stock market did not come true, as a result of which the stalemate continued. However, the meeting between frontline regulator, the KSE Board and the apex regulator SECP was extended to fourth day after the two sides had failed to reach a consensus in its third consecutive meeting held at KSE on Monday. Sources familiar with the discussion held in the third meeting said that the meeting had been extended by a day and would now be held on Tuesday with the hope that the matters would be resolved to the satisfaction of both parties. They said that the adviser to PM on Finance, now in the US also talked to the KSE Board during the meeting. The sources said that State Bank of Pakistan (SBP) was likely to announce further 100 bps cut in the CRR of banks on Tuesday. The move of SBP will bring some relief in short run but the underlying problems will not disappear overnight, the sources added. In the light of this situation there was little hope that banks would provide liquidity to the stock market, as they were already facing shortage of liquidity,they maintained. The sources further said it was just one of the options that had been a part of the package that the board had prepared to hold discussion in the meeting with the hope that after one step had been taken to provide relief to the market other points in the package would later be discussed for implementation. The sources said that the entire package was only known to the board of KSE. They are privy to the contents of the package and the KSE board is playing its cards keeping all its options close to its chest and in the meantime waiting that the promises made during the last two days are delivered and the market maintains some semblance of mobility. For the last three days meeting between the SECP and KSE Board were held to discuss demands of the stock brokers, who were requesting govt to arrange funds in CFS market or freezing CFS rate on 24 per cent owing to the unprecedented increase in CFS rate, depicting a higher risk perception and dried up liquidity in the market. Meanwhile, the Managing Director of KSE, Adnan Afridi, soon after the meeting, said that prices freeze mechanism in place at KSE on August 27 would be removed from Oct 27. Afridi further said that banks and mutual fund industry had assured to provide financing for securities coupled with scheduled banks. The industry would make sure the provision of liquidity against stocks. Those who closely watch the activities in the stock markets termed the statement of MD KSE , Adnan Afridi regarding provision of liquidity by the banks and mutual funds as a mere move to revive the confidence of investors. Contrary to this the current situation of banks and mutual funds reflect that they were not in a position to pump further liquidity into the market. In addition to this they said that Pakistan market was down by 53 per cent as compared to its peak level only because of imposition of floor rule thereby restricting the fall of prices and the actual fall could be seen once this floor is lifted, they added. Monitoring Desk adds: State Bank has permitted purchase and sale of bonds, hitherto stopped till maturity in the interbank market. Now the banks will be able to sell bonds above SLR limit. The decision will become practicable from October 18. The State Bank has taken this step to reduce liquidity shortage. The bonds allowed for marketing by State Bank include Market Treasury Bill and Pakistan Investment Boards. The State Bank has issued two separate circulars in this regard. Online adds: Police surrounded the KSE to thwart violence by investors demanding a halt to trading as price curbs imposed after the biggest slump in a decade locked up their funds, reported Bloomberg. "There are no longer any small investors left in the stock market, they have all been destroyed," Kausar Qaimkhani, Chairman of the Small Investors Association, said in an interview at the Karachi exchange on Monday. "The market should be closed till funds are arranged." "There was a proposal to close the market for two weeks till the government resolves the fund issue," Arif Habib, Chairman of Arif Habib Securities, said by telephone from Karachi. "Then it was suggested issues should be resolved while the market stays open." Authorities moved to safeguard the exchange in the country's largest city to avoid a repeat of violence on July 16, when hundreds of investors stoned the bourse and shouted anti- government slogans. The Karachi exchange last closed for trading on April 10, 2006, after a bombing in the city. "We were called in by the exchange to prevent any damage as has been seen in the past," Police Officer Yaqub said at the exchange.