My Dear Friends and Fellow Investors,
Yesterday, as the Pakistan Stock Exchange (PSX) teetered on the brink, I publicly called for its closure for three to four days to let the panic subside, mirroring the wise decisions by our neighbors in the UAE, Kuwait, and Saudi Arabia amid this escalating war-like turmoil in the Middle East. And today? The PSX plunged a staggering 16,000 points, validating every word I uttered. Someone very intelligent and experienced said that closing markets in such chaos is unwise, but history begs to differ.
As someone who's navigated financial storms for decades, let me share why shutting down exchanges during geopolitical mayhem isn't just prudent—it's a lifesaver for economies and investors alike.
Let me explain point by point. Be a bit patient.
First, closures prevent blind panic selling that decimates wealth. Recall July 31, 1914, when World War I erupted: the New York Stock Exchange (NYSE) shuttered for over four months to halt Europeans dumping U.S. securities in fear. Without it, markets could've collapsed entirely.
Second, they curb excessive volatility. NYSE officials, led by President William McAdoo, feared investors overreacting to war declarations, driving prices into the abyss. The closure allowed cooler heads to prevail.
Third, it shields ordinary investors from unnecessary losses. In 1914, the fear was repatriation of capital; today, it's missile strikes and oil spikes from U.S.-Israeli actions against Iran on February 28, 2026, prompting Iranian retaliations.
Fourth, time buys clarity amid uncertainty. During the 9/11 attacks on September 11, 2001, the NYSE closed until September 17 under Chairman Richard Grasso's directive, averting a freefall amid national grief and logistical chaos.
Fifth, markets rebound stronger post-closure. When NYSE reopened on December 12, 1914, the Dow Jones surged 4%, paving the way for an 88% gain in 1915, the index's best year ever, as war contracts boosted the U.S. economy.
Sixth, it maintains systemic stability. In the Gulf War of 1990-1991, brief halts and interventions under President George H.W. Bush's administration prevented broader meltdowns, with markets recovering in months.
Seventh, closures deter manipulation. During World War II, limited shutdowns in 1939 after Hitler's invasion of Poland on September 1 allowed regulators to monitor without speculative frenzy; the Dow rose 10% shortly after.
Eighth, they provide breathing room for policy responses. Russia's Moscow Exchange closed for a month starting February 28, 2022, during the Ukraine invasion, giving the Central Bank under Elvira Nabiullina time to stabilize the ruble.
Ninth, history shows non-closures amplify damage. The 1929 Crash on October 29 saw no full halt; the Dow plummeted 13%, fueling the Great Depression under President Herbert Hoover's inaction.
Tenth, in our region, UAE's Abu Dhabi and Dubai exchanges closed March 2-3, 2026, per Capital Markets Authority orders, shielding billions from Iranian strikes' fallout proving foresight over folly.
Eleventh, it fosters investor confidence long-term. Kuwait's indefinite suspension on March 1, 2026, echoes this, preventing a PSX like bloodbath.
Twelfth, closures align with modern circuit breakers, but in war-like scenarios, full pauses are essential, as seen in Egypt's 5.44% drop without one.
Friends, I've seen markets rise from ashes. Closing isn't weakness; it's wisdom. Let's urge our regulators to act boldly, preserving our hard-earned wealth. History isn't just facts, it's our guide.
In solidarity,
Mir Mohammad Alikhan