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KSE added in new Dow Jones FEAS Indexes

Thursday, 04 Jun, 2009

KARACHI: Dow Jones Indexes, a leading global index provider, and the Federation of Euro-Asian

Stock Exchanges (FEAS) have plans to launch the Dow Jones FEAS Indexes, which includes the

Karachi Stock Exchange (KSE).

According to the KSE here on Wednesday, this is the first time that indexes have been created to measure

the performance of companies across the Euro-Asian region.

The three indexes that are being launched on Friday (June 5) are a composite, and two regional sub-

indexes. The Dow Jones FEAS Indexes are designed to underlie index-linked investment products such as

funds and structured products.

Dow Jones FEAS Composite Index currently includes component stocks of 10 of the 32 member states of the

FEAS.

The exchanges included are Abu Dhabi (UAE), Amman (Jordan), Bahrain (Kingdom of Bahrain), Belgrade

(Serbia), Bulgaria (Bulgaria), Istanbul (Turkey), Karachi (Pakistan), Macedonia (Republic of Macedonia),

Muscat (Oman) and Zagreb (Croatia).

The Dow Jones FEAS Middle East/Caucasus Index currently includes stocks from the following four FEAS

member exchanges: Abu Dhabi, Amman, Bahrain, and Muscat.

The Dow Jones FEAS South East Europe Index measures the performance of companies in the following five

FEAS member exchanges: Bulgaria, Zagreb, Macedonia, Belgrade and Istanbul.

http://dawnnews.tv/wps/wcm/connect/dawn-content-library/dawn/news/business/09-kse-added-in-

new-dow-jones-feas-indexes-szh--01

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KSE opens up `Over the Counter` market

January 13, 2011

KARACHI, Jan 12: The Karachi Stock Exchange announced on Wednesday that the bourse was to throw open the

doors of `Over the Counter` market, through the listing of first-ever privately placed Commercial Papers (CP). Thatrefers to Rs1 billion worth CP of Engro Fertilizers Limited to be listed on the KSE from January 17, 2011. The

trading would start the next day-as required by the regulations.

Analysts said that the Engro Fertilizer CP was introduced in the market in September last year for a 6-month term to end in

March. The company would then pay off the debt. Listing at the stock exchange was a condition noted in the paper, which

the company was about to fulfill.

KSE stated on Wednesday that the purpose of OTC Market was to provide investors ³an efficient and transparent source of

investment, beside encouraging promoters to set up new industries or expand the existing enterprises by raising funds in a

cost-effective manner in a listing regime where requirements are less stringent´.

KSE could find all the right words for its ³endeavour to develop healthy, efficient and transparent OTC Market in line with the

international standards, which plays a pivotal role in the efficient working of the global financial system and in generating the

economic growth of the countries across the world´.

And the bourse statement added: ³The KSE foresees the Pakistani capital market, particularly the Debt Market growing

rapidly in future to attain a place of pride amongst the leading capital markets of the region´.

Market participants were not, however, too, enthusiastic about a debt market that had obstinately refused to grow.

http://www.dawn.com/2011/01/13/kse-opens-up-over-the-counter-market.html

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Gloom settles on KSE in 2008

By Dilawar Hussain

Karachi, May 17: Gloom seems to have settled on the country¶s capital market during the currentyear. The number of companies listed on the Karachi Stock Exchange have stood unchanged at654 since the start of the year.

³I know of no listed companies (except perhaps for Arif Habib Bank and Thatta Cement, thelisting process for which had started last year) which may have entered the bourse during the firstfive months of the current year,´ says a stock market participant, admitting that it was unusual, but not quite unexpected.

Last year, the market was swamped with as many as eleven Initial Public Offerings. Analystssaid there was no incentive for the unlisted companies to step into the stock exchange.

The corporate tax rate, if lower for quoted companies, could have been one big reason, but thatremains at 35 per cent for both listed as well as unlisted corporate entities.

³Indeed some of the companies have sought de-listing, so as to escape the hassle of strictcompliance with the code of corporate governance,´ says a stock strategist.

Drawing and filing up quarterly accounts and all sorts of statements is a headache in itself, whilethe directors have to restrain themselves in the face of investors¶ criticism, which sometimesturns to abuse at the shareholders meetings.

In the absence of new entrants, the corporate sector is nonetheless abuzz with activity of another kind. Companies have continued to capitalise profits by the issue of bonus shares and ask shareholders for cash in right issues. The total listed capital has thus increased from Rs671 billion at Dec 31, 2007 to Rs695 billion on May 12.

Corporate restructuring has also been more pronounced in the recent years. Merger andacquisition activities, particularly in the banking sector, have been going through where financialinstitutions have been presented with limited options, either to merge or fade away in the face of higher capital requirements by the regulators.

The KSE-100 index stood at 14,075 at the start of the year and went on to climb above 15,500levels, giving investors a return of 4.4 per cent till April 15.

But the recent meltdown of the market has trimmed the gain to just around 1 per cent with theindex at 14,233 on Friday and still looking down.

Market pundits espouse countless reasons, explaining why bears managed to overpower the

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bulls. Will the market rebound from here?

An old timer at the KSE held out his hand and counted ten reasons on the fingertips, which hesaid had tossed the market into tailspin.

Those included: political uncertainty; dim economic picture; rupee devaluation; rising crude prices; the judges case; soaring inflation; dismal corporate earnings in 1Q08; militancy and lawand order problems; S&P downgrading and the concern whether or not capital gains tax would be imposed in the upcoming budget.

³How long do you think it would take to settle those issues?´ he asked. The veteran did admitthat the market had shown resilience to terror attacks and some other depressing issues, but hethought that now the factor of fear was fast overtaking that of greed. In particular the foreigninvestors are believed to be moving out in droves.

Figures posted on the National Clearing Company website, shows that converted at Rs68.50 to a

dollar, foreign investors withdrew nearly half a million dollars from portfolio investment on May16 alone.

The KSE had given investors an enviable return of 40 per cent in 2007, which made the sixth of a consecutive bull run. In the five years prior to that (2002-05), the market had yielded anaverage of an incredible 55 per cent return. Investors wonder if the market could yet take aturnaround and maintain that trend of earnings disbursement for the balance of the current year.

http://dawnnews.tv/2008/05/18/ebr3.htm

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KSE Board elects new chairman

By Dilawar Hussain

Friday, 15 Jan, 2010

KARACHI: At the first meeting of the re-constituted Board of the

Karachi Stock Exchange on Thursday, Mr Zubyr Soomro was elected

chairman for the year 2010.

Mr Soomro has been a career banker, with 36 years in Citibank and having

worked also as UBL president.

A press release issued by the KSE stated in detail the wide experience of the

new chairman, mainly in the financial services sector.

The bourse statement recalled that the board of KSE, under its Articles of

Association, was to be composed of five elected members of KSE and four

non-member directors, nominated by SECP.

The managing director of the KSE, by virtue of his office, sits on the board

as 10th director.

Furthermore, the Articles provided that the chairman of the board was to be

elected from amongst the non-members directors, the bourse stated.

The five elected directors of KSE for the new board were Mr Abid Ali Habib,

Mr Mohammad Yasin Lakhani, Mr Dawood Jan Mohammad, Mr Mohammad

Munir Khanani and Mr Abdul Majeed Adam; whereas, the SECP¶s nominated

directors for the current term were Mr Zubyr Soomro, Mr Farrukh S Ansari,

Mr Farrukh Viqaruddin Junaidy and Mr Mohammed Farhan Malik. Mr Adnan

Afridi has been the MD of KSE since Oct 2007.

RBS on look out for a new buyer

The Royal Bank of Scotland Group plc (RBS) has re-started the process for

the potential sale of its 99.37 per cent ownership interest in the RBS

Pakistan.

In a notice released at the KSE on Thursday, the bank said: ³We understand

that at this stage RBS is in the process of identifying potential bidders for

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the proposed sale.´

It added that subject to obtaining requisite approvals, such potential bidders

may be invited to and may conduct due diligence on RBS Pakistan.

Analysts commented that the RBS was on the hunt for a new buyer following

the ³lapse´ of sale proposal of Pakistan unit to the MCB Bank for $87 million

(62 million euros).

A statement released by the bank¶s parent-state-rescued lender Royal Bank

of Scotland on Jan 5 this year informed that the deal to sell its Pakistan unit

to MCB Bank had lapsed.

It said that RBS had agreed in August to sell the operations to MCB in a

transaction that was expected to be completed in the final quarter of 2009.

The MCB did not manage to gain regulatory approvals and closing did not

occur by Dec 31, 2009, which was why the agreement and the transaction

had lapsed.

Fatima Fertilizer subscribed by over four times

On the fourth and final day of book building process of Fatima Fertilizer

Company Limited, the company received total bids of 596 million shares

from institutional investors and high-net-worth-individuals.

The book builder/manager noted that it amounted to over four times the

required volume of 143 million shares.

A statement released by the company noted that the total number of bids

stood at 1,247. The highest bid was for Rs100 per share and lowest for Rs10

per share. Final strike price was calculated at Rs14.10/ share.

Already listed on the KSE, the management decided to list the company at

the Lahore Stock Exchange and Islamabad Stock Exchange, the press

release noted.

http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-

newspaper/business/13+kse-board-elects-new-chairman-510-za-09

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Five new listings at KSE in 2010

December 12, 2010

By Dilawar Hussain

KARACHI, Dec 11: In all, five companies have made Initial Public Offerings (IPOs) in the aggregate sum

of Rs3.5 billion at the Karachi Stock Exchange to date this year. Since no more listings are imminent, it

would be safe to assume that the figure will see through the winter.

The disenchantment of private companies to go public, considering that Pakistan equities have already

offered exciting return of 23 per cent during the calendar year (21 per cent in dollar terms), is mind-

boggling.

On Friday, the Securities and Exchange Commission of Pakistan (SECP) proudly presented its

accomplishment by declaring that it had registered 179 companies in November, pushing the total

corporate portfolio to 57,183, said a stock broker. But what good is it if only 645 company stocks arequoted on the stock exchange and fewer than fifty are actively traded and even lesser number share

their fortunes with the general public.

Furqan Punjani, analyst at Topline Securities, observed that the five equity offerings this year fall far

short of the last five year average of eight IPOs a year.

The analyst pointed out: The number of companies entering stock market in 2010, nonetheless,

reflected improvement from 2009 when the local bourse had seen only three IPOs of the total size of

Rs1.2 billion.

But that was understandable as it followed the year of doom (2008), when market crashed by 70 percent; investor exit was blocked by the insane price floor and problems were exacerbated by adverse

economic conditions and severe liquidity crunch.

It was interesting to note that all five IPOs in the year to close this Dec 31, came up in the market during

the first 4 months of the year and there has been no offering since April 2010.

The IPO issues, which can be noted under various stages of offerings on the KSE quotation list, were

thought to have put their plans on the hold in view of many disappointments: low volumes partly on

account of absence of a leverage product; weak economic fundamentals intensified after the

devastating floods and the realisation by issuers that the experience in the last few offerings may have

left bad taste in shareholders` mouth. About new listings during the year:

Out of Rs1.6bn (Rs3.5bn with Wateen`s greenshoe) offered to the general public through 5 IPOs, the

total subscription amount received stood at Rs3.2billion.

Only Agritech was undersubscribed whereas others were fully or oversubscribed.

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During the year, two fertilizer companies tapped the local markets including Fatima Fertilizer and

Agritech. Other companies that entered the market to raise capital, included one from construction

sector (Safe Mix), one from Textile (Amtex) and one from the Telecom sector (Wateen Telecom).

Incidentally, entities in one of the most affluent sector: cellular companies opted to stay out of the

public offer of equity.

The largest offering of Wateen during 2010 was also the first telecom listing after a gap of 4 years. The

company offered an amount of Rs1.1bn (Rs2bn with greenshoe option) for subscription, which was

oversubscribed by almost 1.8 times.

However, this stock was one of the bad performers as currently the scrip is trading at a discount of 61

per cent to its offer price.

While AMTEX stood as the worst performer eroding investors` wealth by 67 per cent. Globally, the year

proved best for IPOs:

While Pakistan market posted a depressing trend of IPOs in 2010, company equity offering in global

markets broke all past records. With rising investors̀ craving for better returns amid lower interest rates

in developed markets and better earnings growth from emerging and frontier markets, more than 60

per cent of total offerings were from Asian countries.

China, with a booming economy, saw huge investor appetite for IPOs from high growth companies,

which placed the country head above the rest of the world, capturing almost half the share of total

equity raised globally.

In the outgoing year till November 2010, total offerings worth $255bn were seen in Asia which might

exceed $295bn witnessed in 2007, according to Ernst & Young. Along with massive inflows to emergingeconomies Europe saw a more than 500 per cent increase on the amount of IPO funds raised compared

to the same period in 2009, according to Ernst & Young. And all of that was regardless of the worsening

financial crisis that looms over Ireland and Sweden.

http://www.dawn.com/2010/12/12/five-new-listings-at-kse-in-2010.html

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Sell-off by foreign investors makes KSE shed 282 points

By Dilawar Hussain

Saturday, 08 May, 2010

KARACHI: The Karachi Stock Exchange Index of 100 shares came crashing down by 282points to settle at 10,271 on Friday. The heaviest one-day fall this year wiped off Rs72

billion from the market capitalisation.

The decline in stock prices was triggered by equity sell-off worth $13 million by foreign

investors in the last two days of the trading week. Leaning heavily on foreign inflows for the

14th consecutive week, the blue chips plunged on the slightest sign of withdrawal of foreign fund

support.

Many analysts linked the fall to the global equity meltdown caused by rising concerns over the

Greece debt crisis. ³Foreigners pulled out of Asian markets as New York¶s Dow Jones and

London¶s FTSE were badly battered,´ said an analyst at a leading brokerage firm.

However, speaking in his personal capacity, Yasin Lakhani, sitting director of the KSE,

described the fall merely as a ³psychological effect of the Greek tragedy´. He attributed the

foreign selling to profit-taking in lucrative markets.

Arif Habib frowned upon the mention of the Greek crisis as the principal reason for the Pakistani

stock fall. ³If at all, it can have sentimental value,´ he said and added that the stocks could lose

lustre only if there was a fundamental change in the county¶s economy, corporate outlook or

country risk.

³Since all of those are intact, Eurozone woes can scarcely deal a blow to Pakistani stocks,´ he

said. Mr Habib listed as the main reason for the fall the decline in price of crude oil, which sent

several fully priced stocks on the oil sector tumbling down.

Budget uncertainties, mainly linked to the Capital Gains Tax, were also dampening investor

sentiments, he said.

Oil stocks such as those of the NRL, PSO and POL came in for heavy selling. All eyes were

however on the oil giant, OGDC, thought to be 70 per cent owned by foreign investors. Due to

its heaviest weightage, change of a rupee could move the KSE-100 index by 18 points.

Some investors worried whether the overseas investors would resort to dumping OGDC, which

could drag down the entire market. But fund managers and brokers were sanguine that because

of it being fully priced, offload at the current price would not attract buyers, which was why

foreigners might consider it prudent to hold onto the stock.

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Foreign investment, oil prices push KSE index

Tuesday, 06 Apr, 2010

KARACHI: Foreign portfolio investment and local buying helped the Karachi Stock

Exchange continue its bullish rally.

The KSE-100 index breached the level of 10,500 points on Tuesday.

Buying activity could be seen across the board at the local equity market as foreign participation

continued in the banking, energy and power, and fertilizer sectors.

Rising international oil prices have also been instrumental in pushing the benchmark index

forward.

However, analysts expect increased profit-making in the next few sessions. ²DawnNews

http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/business/07-foreign-

investment-oil-prices-push-kse-index-ha-02

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SECP urges non-broker chairman for KSE

From the Newspaper

January 2, 2011 (3 weeks ago)

By Our Equities Correspondent

KARACHI, Jan 1: The newly-appointed Chairman of the Securities and Exchange Commission of Pakistan (SECP),

Mohammad Ali Ghulam Mohammad, called upon the broker community to let the chairman of the Karachi Stock

Exchange be from amongst the non-member directors.

He said it was in compliance with ³good corporate governance and in line with international best practices.´

A statement jointly released by the SECP-KSE on Saturday stated that various outstanding issues were amicably resolved

in a meeting of the SECP headed by its chairman with member directors of the KSE`s outgoing and newly-elected directors

for 2011, on Friday.

It said that the SECP chairman emphasised that the chairman of the KSE board would continue to be from amongst the non-

member directors.

The SECP approved the appointment of acting managing director for an interim period and reiterated upon early completion

of transparent process for the appointment of a permanent MD at the KSE.

The joint press release stated that it was agreed by the KSE board members that the functions of internal audit and market

surveillance would remain in place.

³Further, the board members assured their cooperation and commitment in managing the affairs of the bourse in the best

interest of the market and to promote transparency and integrity,´ the release stated.

It added that the SECP chairman reassured the participants that the apex regulator would continue to work in close

coordination with the exchanges and to play a facilitators role for the development of capital markets and enhancing

investors` confidence.

www.dawn.com/2011/01/02/secp-urges-non-broker-chairman-for-kse.html

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Foreign funds propel KSE index above 10,000 points

By Dilawar Hussain

Saturday, 13 Mar, 2010

KARACHI: A record-breaking run of shares at the Karachi Stock Exchange on Friday propelled the

KSE-100 index safely over the resistance level of 10,000 points.

The feat accomplished after 18 months was on an unlikely day. The Lahore blasts ought to have sent

investors scurrying for cover, but the brisk trading betrayed either lack of sensitivity to human suffering or

resilience in the face of terror threats. A senior broker, when queried, mumbled that it could be a bit of both.

Foreign investment in the staggering sum of $57 million in two weeks, an unusual phenomenon, is

acknowledged by brokers and analysts as the engine that has driven the market to the height.

Broker-turned-industrialist Arif Habib said that foreign funds had recognised Pakistan as a lucrative

destination because of improved corporate profitability; a respite in internal political feuds, attractive

valuations and high yields.

³The Pakistani stocks give out a yield of 5.5 per cent and the shares of profitable companies are trading on

price-to-earnings multiple of seven times the forward earnings. That compares well with the yield of two per

cent and p/e ratio of 17 times in the regional markets including India,´ Mr Habib said.

But he pointed out that Pakistani bourse was not alone in the sight of overseas investors. Over the past two

weeks, foreign inflow in the Mumbai market was of no less than $3.4 billion, which puts the overseas inflow

figure in KSE quite in the shade.

Mohammad Sohail, CEO at Topline Securities, observed that the abnormal foreign inflow was the result of

renewed interest of fund managers in the frontier and emerging markets, regardless of valuations and

political risks. But for all the foreign interest in equities, local investors were engaged in booking profits. In

the same two weeks, investors at home (companies, individuals and banks) sold shares of the aggregate

value of $43 million. ³The concerns regarding an upcoming tax-laden budget, maintenance of tighter

monetary stance by the central bank and security concerns have forced local players to distance themselves

from the market,´ said Mr Sohail.

At the start of the second trading session on Friday, the market drifted downward for some time, shedding

more than 100 points on the index, but then it turned north. An equity trader, however, said that gains were

not widespread. He noted that the index-heavyweight, oil exploration giant OGDC alone contributed 92

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points in the 146 points gain posted by the market on Friday. A senior broker calculated that as much as 87

per cent gain in index value was contributed by fewer than five shares. The buyers identified as foreign

funds flocked back in the second half of Friday¶s trading session, shaking off the initial fear caused by the

blasts.

Many market pundits avoided forecasting the future direction of the market. The climb over the 10,000 level

has historically made investors feel dizzy. So would there be a pullback?

³So long as overseas investors regard rewards of investing in Pakistani stocks to outweigh risks, the index

will continue to climb so as to touch 11,500 by the end of 2010,´ said a stock broker recognised as an

incorrigible bull.

http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/front-

page/foreign-funds-propel-kse-index-above-10,000-points-330

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The information conveyed to the public through a press release by the SECP

stated that the meeting was held to discuss various market developmental

initiatives.

³Deliberations were held on some aspects of the Margin Trading Product

recently approved by the SECP and it was agreed that during the course of

developing the regulatory framework due consideration will be given to the

operational and business aspects to avoid any inconsistency/impracticality,´

the release sated.

Also, governance-related matters of the stock exchange came under

discussion and it was agreed that the SECP would review the matter jointly

with the Exchange¶s representatives to address issues in light of best

international practices and in the interest of the market, stated the press

release.

It said that the meeting discussed various proposals that were underway for

the development of the capital markets and ³boosting of investors¶

confidence.´

Those included the revamping of broker regime in areas of capital adequacy,

code of conduct, credit rating, consolidation of brokers through requirements

of adequate capital base and a robust compliance and inspection regime.

The release said that the participants supported demutualization of the stock

exchange while making the market more vibrant to attract investors that

lead to better valuation of the Exchange.

The SECP emphasized upon the introduction of various measures to

strengthen investors¶ protection and revive investors¶ confidence, which

included an improved know-your-client regime and the implementation of

automation of securities project at the CDC.


newspaper/business/secpkse-meeting-a-nonevent-190

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47.5 per cent drop in foreign investment in Pakistan

Wednesday, 17 Jun, 2009

KARACHI: Net foreign investment in Pakistan fell 47.5 per cent to $2.22 billion in the first 11

months of the 2008/09 fiscal year compared with $4.23 billion in the same period last year, the

State Bank of Pakistan said on Wednesday.

Foreign private investment fell 34.2 per cent to $2.76 billion in the July to May period, compared with $4.20

billion in the corresponding period last year, the State Bank of Pakistan said on its website. Out of total

foreign investment, foreign direct investment was down 19.8 per cent to $3.32 billion, compared with $4.15

billion the previous year.

Rated deep in junk bond territory, Pakistan was saved from a balance of payments crisis and default by a

$7.6 billion emergency loan package from the International Monetary Fund last November.

Its economy is also in virtual recession with gross domestic product growth for the 2008/09 fiscal year

expected at 2 per cent, compared with 4.1 per cent last year.

There are also security concerns for investors as Pakistan battles a Taliban insurgency in its northwest.

There was an outflow of $1.1 billion from July to May this year compared with an inflow of $87.2 million inthe same period the previous year. There have been outflows from the stock market because of political

uncertainty as well as economic and security worries.

Foreign investors also lost confidence and sold shares when stock market authorities placed a floor under

the main index in August following sharp falls. The floor was removed in December. ² Reuters

www.dawn.com/.../19-475-per-cent-drop-in-foreign-investment-in-pakistan- 01

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KSE MD to step down

By Dilawar Hussain

Tuesday, 12 Oct, 2010

KARACHI, Oct 11: Managing Director of the Karachi Stock Exchange, Mr Adnan Afridi would step

down on the expiry of his term on Oct 31, it was learnt from reliable sources on Monday.

Speculations had reached fever pitch over who would head the management of the bourse next

year.

Sources said that Afridi had conveyed his unavailability to the Board from first quarter of 2010-

11 due to his other professional commitments.

Two other top corporate-related seats to fall vacant by the end of the year include those of the

Chairman, Securities and Exchange Commission of Pakistan, Salman Shaikh whose period of

contract ends on Nov 1 and the chairman Karachi Stock Exchange Zubyr Soomro who would

retire from that office on Dec 31.

It is still unclear if Salman Shaikh and Zubyr Soomro would retain their posts for another term

but SECP chairman is said to be the first person to have worked at the top level in all divisions at

the apex regulatory body. Zubyr Soomro could also stay put as a precedent exists in Kamran

Y.Mirza, who had earlier filled the office for two terms. But both re-appointments would be

unwelcome by the powerful broker fraternity, as their demand for a reversal to the pre-reforms

practice of a broker chairman, in place of an SECP-nominated chairman, that has only recently

subsided, could flare up. KSE chairman has earned the brokers ire for having put a dissenting

note on the resolution of the KSE Board passed by a majority of 8 to 2 votes for the introduction

of Margin Trading Product (MTS).

Citibank

accepts Bankislami

offer

An announcement by the stock market listed Bankislami on Monday stated: Citibank N.A has

accepted our offer for the acquisition of its Housing Finance Business (portfolio). The size of the

portfolio is approx Rs1.1 billion.

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The said acquisition structure was stated to be in accordance with the Shariah guidelines

provided by the Shariah Adviser.

The acquisition was subject to necessary approvals by the relevant regulatory authorities.

Earlier on May 18 last year, Bankislami had expressed an interest to acquire the Consumer

Housing portfolio of Citibank, N.A. Pakistan and entered into a Non-Disclosure Agreement

(NDA) with the Citibank for its due diligence.

The acquisition was then said to be subject to necessary due diligence, mutual agreement

between Bankislami and Citibank, approvals by the Boards of Directors and a nod from the

relevant regulatory authorities.

Bankislmai had at the time notified KSE that it was commencing due diligence of the Consumer

Housing Finance portfolio of Citibank from May 19, 2009

http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/business/kse-

md-to-step-down-200

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http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/business/09-kse-30-

index-unable-to-dislodge-kse-100--szh-05

KSE-30 index unable to dislodge KSE-100By Our Equities Correspondent

Tuesday, 18 Aug, 2009

KARACHI: The Karachi Stock Exchange carried out an exercise to re-compose KSE-30 index for the

period January to June 2009 by virtue of which seven companies were replaced by as many new

companies, a notice at the bourse on Monday said.

The incoming companies were listed as Kot Addu Power; Attock Petroleum; ICI Pakistan; Bank AL

Habib; National Refinery; Pakistan Reinsurance and Shell Pakistan.

The outgoing stocks were those of Arif Habib; Pervez Ahmed Securities; Askari Bank; the Bank of

Punjab; EFU General Insurance; NetSol Technologies and NIB Bank.

The recomposed index, based on the prices of June 30, would be implemented with effect from Aug 17.

But for all that market wonders if in the three years since the KSE-30 index was launched, on Sept 10,

2006, it has been able to uproot the lopsided 100-index and take its place on the main board. The 100-

index was despised for its disproportionate weightage to fewer than half a dozen companies with small

float.

Together they could swing the entire market one way or the other. A wise advisor, therefore, came up

with the idea of introducing the market float based 30-index.

Some of the features of the 30-index that distinguished it from the 100-index are:

(i) Market capitalisation was based only on the free-float of shares, rather than on the basis of paid-up

capital

(ii) the other indices represented total returns of the market, meaning that when a company

announced a dividend; the index was not reduced / adjusted for that amount of dividend (whether cash

or bonus). Simply put, the KSE-100 and KSE All-Shares indices were not dividend adjusted. On the other

hand, the KSE-30 Index was adjusted for dividends and right shares.

No one disputes the utility of the 30 index, which is admitted to be more representative of the market.

But three years down the road since it was introduced, investors still continue to go by the movement of

the 100-index. Its gripping power as a benchmark for stock trading has hardly diminished.

Never mind the worth of 30 share index, says a leading asset manager, even after years, it has been

difficult to wean investors to the new index.

In order to prove his point, the stock guru, refers to the other Index that sits on the KSE: The KSE All

share index. How many people ever even cast a cursory glance at that index?, he asks and points to at

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least half a dozen other indices introduced by private parties, none of which have been able to

command general investors attention, away from KSE-100 index.

And it is all the same in the global markets. The Mumbai market had introduced no less than 15 indices,

yet BSE-100, retains the popularity. Japanese investors rely only on Nikkei 225 and the less known Topix.

Malaysian market trades on one: KLCI (KLSE Composite Index). About eight indices gauge theUK market,but FTSE 100 index is the one that enjoys the popular following; CAC 40 does that on the French bourse

and DAX on the German market. The worlds largest New York Stock Exchange also could boast the

largest number of indices, which happen to be more than 50, not including some industry specific

indices. But how many capture investors interest?

Only three: Dow Jones Industrial Average; Dow Jones Composite Average and Nasdaq.

The KSE-30 index may have found favour with foreign funds and analysts, but during the typical days

trading, the blood pressure of an average investor keeps swinging in tune with the rise and fall of the

KSE-100 index.

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http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/business/kse-

okays-7day-future-contract-840

KSE okays 7-day future contractBy Our Equities Correspondent

Wednesday, 28 Apr, 2010

KARACHI, April 27: The Karachi Stock Exchange approved seven-day future contract and forwarded it to

the Securities and Exchange Commission of Pakistan (SECP) for its consent.

A meeting of the KSE board was held on Tuesday to deliberate on new products to be developed and

introduced into the equity market.

A person in the knowledge of the proceedings said that the directors approved the long-awaited seven-

day future contract, which, hopefully, would enable larger investor participation in the stocks trade.

The board also discussed products, such as Options trading and tradable sector indices.

It was agreed that those would be further discussed and presentations made at the next meeting of the

board to be held in mid-May.

85 companies announce financial results

As spring reporting season goes into full bloom, as many as 85 companies announced their financial

results for the period ended March 31 on Tuesday.

Some of those included Engro Corporation; Glaxo SmithKline; Pak Suzuki Company; ICI Pakistan;

Standard Chartered Bank; NIB Bank; Arif Habib Bank; KASB Bank; Nishat Chunian Power; Millat Tractors;

Pak Reinsurance; Pakistan Petroleum; New Jubilee Insurance; Sui Southern Gas; United Bank Limited;

Maple Leaf Cement and Cherat Cement.

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newspaper/business/badla-may-be-back-at-kse-by-august-770

µBadla¶ may be back at KSE by AugustBy Dilawar Hussain

KARACHI, July 16: The eight-member committee constituted by the Securities and

Exchange Commission of Pakistan (SECP) finalised proposals to address liquidity

issues at the capital markets.

In their third and final consultation session on Friday, the recommendations on the

Karachi Stock Exchange proposals on Margin Trading (badla) were put to test and the

report forwarded to the KSE so as to meet the deadline provided by the apex regulator

on Monday, a member told Dawn.

The committee comprising representatives from various stakeholders to dig out a widely

acceptable leverage product was formed following negotiations between the SECP and

KSE on June 22. The committee was given a firm deadline to submit recommendations

to the SECP within 15 working days.

³The committee had already decided upon the basic concept and contours of the

product and the meeting on Friday was to re-read the recommendations before passing

on to the regulators,´ said a committee member.

It was learnt that a meeting of the board of directors of KSE would be held onWednesday to deliberate on the report before handing it over to the apex regulator.

Most investors on Friday were wondering if the upcoming product was similar to the

previous prevailing µbadla¶.

On query, the member responded: ³Any leverage which involves borrowing is badla.´

That surely does not convey much but the member elaborated that the argument was

on whether the new product should be ³market-based´ or ³off-market´ and he hinted at

the latter, which analysts deduced was nearer to µbadla¶.

The SECP is expecting the recommendations to be submitted to the apex regulator next

week. ³But there is a long schedule ahead´ said a stock broker.

Earlier in the week, SECP had notified that, ³The concept of µMargin Trading¶ once

endorsed by the KSE board of directors and NCCPL and approved by the SECP would

need to be incorporated into the draft Securities (Margin Financing, Securities Lending

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and Borrowing and Pledging) Rules, 2010´.

And the apex regulator added: ³These revised rules will then be submitted to the federal

government for final approval.´

Many brokers thought that the new product could be in operation by mid-August, but the

member suggested an earlier date.

The SECP committee that finalised the product comprised one broker and one non-

member director; a capital market professional; a representative of the Mutual Fund

Association; one each of the Pakistan Bankers¶ Association and the National

Commodity Exchange. A representative of the apex regulator sat on the committee as a

co-coordinator.

Many stock brokers had been clamouring for the re-introduction of µbadla¶ as theyargued that volumes had greatly shrunk after it was thrown out following the market

crash of 2008.

Day traders and speculators also grudged their inability to participate in the market rally

because of end to µbadla¶, which facilitated them to trade on borrowed money.

Lack of liquidity was widely believed to have drained the stock market of volumes and

prevented price discovery. The outgoing quarter ended June saw volumes sinking to

eight-year low. Broker Hasnain Asghar Ali, a vociferous campaigner of the re-

introduction of µbadla¶, said that daily turnover had declined to 50 million shares valuedat Rs3 billion, from the average of 400 million shares of Rs 25 billion when µbadla¶ was

in vogue.

But he cautioned: ³Until the draft is put up for public view, it is difficult to say if the

upcoming leverage would be simple and investor-friendly.´ He thought that in case the

derivative is complicated or expensive, the whole process would amount to an exercise

in futility.

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µShort sale¶ allowed in KSE-30 index companiesBy Dilawar HussainTuesday, 08 Dec, 2009

KARACHI, Dec 7: The Karachi Stock Exchange announced on Monday that the

companies which form the KSE-30 index were approved by the Board as eligible for

µshort sale¶ (in the market terminology- ³bhatta´) with effect from Monday (Jan 4, 2010).

The bourse said that the decision had been taken after seeking prior approval of the

apex regulator, Securities and Exchange Commission of Pakistan.

One straight interpretation of the KSE announcement, put forward by a senior stock

broker was that the Regulations for µshort selling µunder Ready Market, 2002¶ were in

place but the companies in which investors could sell µshort¶ were not specified.

As such the market was deprived of the product of µshort sale¶. ³The KSE has nowidentified the eligible µshort sale¶ stocks´, he said.

Those were the 30 stocks in the heavier-free float based KSE-30 index and included the

following:

Arif Habib Securities; Adamjee Insurance; Azgard Nine; Attock Petroleum; Attock

Refinery; Bank Al-Falah; Bank Al-Habib; DG Khan Cement; Engro Chemical; Fauji

Fertiliser Bin Qasim; Fauji Fertiliser Company; Habib Bank; Hub Power Company; ICI

Pakistan; Jahangir Siddiqui Company; Kot Addu Power Company; Lucky Cement; MCB

Bank; National Bank of Pakistan; Nishat Mills; National Refinery; Oil and GasDevelopment Company; Pakistan Reinsurance Company; Packages; Pakistan Oilfields;

Pakistan Petroleum; Pakistan State Oil; PTCL; Shell Pakistan and United Bank Limited.

Zafar Moti, director on the 2009 KSE board, said that the step marked the fulfillment of

long-standing demand of the investors to allow all trading products prevalent in other

markets of the world including µshort sale¶.

The current board would be liquidated at the end of December and new members

elected on the 15th of the month by the 200-strong members, would take their places.

Mr Moti and another senior stock broker said that the step was positive for the market,

for it would give it greater depth and scale up the volumes of trade.

The Monday announcement of KSE came as the total number of scrips traded during

the day stood down at just about 73 million shares, representing 23-month lows.

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While most market participants subscribed to the above interpretation of the KSE¶s

Monday announcement, some lone voices were heard saying that there was no issue

over allowing short sale at the market, for the simple reason that short sale had never

been banned.

³It was the µblank sale¶ (and that also in the ready market) which had been prohibited

and that ban still applies,´ one said.

His understanding was that the Regulations 2002 stipulated eligibility of short sale

where the seller had made prior borrowing arrangement and only in the CFS eligible

securities. After the brokers threw out the CFS (badla) following the 2008 market crash,

equities that now replaced the eligible 40 under the CFS had to be decided.

³The announcement was to fill that void, but the condition of prior borrowing

arrangement to shrike a µB

hatta¶ remains,´ he said. The right interpretation wouldpossibly come on Tuesday when other market gurus come up with their views.

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newspaper/business/stock-crash-of-aug-2008-investors,-regulators-head-for-legal-

battle-750

Stock crash of Aug 2008: Investors, regulators head for legal

battleBy Khaleeq KianiFriday, 07 May, 2010

ISLAMAB AD, May 6: The compensation seekers of the August 2008 market crash, the

Karachi Stock Exchange (KSE) and the Securities and Exchange Commission are

heading towards a legal battle following non-settlement of their dispute through

amicable means.

The KSE has offered payment of only 6.7 per cent compensation of the claims of

investors, who lost their investments due to default of five brokers in the August-2008

market crash on the condition that they surrender their right to challenge the partial

settlement in any court of law.

The KSE management has asked the investors to submit an undertaking on Rs50

stamp paper within 10 days to qualify for the payment of about 6 per cent of settlement

amount.

³We hereby affirm that we are completely satisfied with the process of realisation of

assets of above-named expelled member and distribution of its proceeds to the rightfulclaimants by KSE and the proportionate amount of claim received by us and undertake

that we shall not claim any further amount from the KSE in respect of above named

expelled member and acknowledge that the KSE has discharged its obligation under

the regulations,´ says a specimen undertaking provided to the affected persons of 2008

market crash.

Thousands of small investors lost billions of rupees during the 2008 market floor,

leading to cancellation of membership of five defaulter brokers, including Eastern

Capital, Prudential Securities, Capital One Equities, MKA Securities and Click Trade.

KSE documents suggest that only in the case of Eastern Capital, the exchange received

1,638 claims having a total value of Rs483 million. After verification of official data by a

chartered firm, the KSE reconciled and authenticated total claims down to Rs395

million.

The forfeited membership card of the broker was sold on March 2010 although the

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broker had already fled the country after conveniently disposing of his assets and

properties.

The KSE said that net funds available for distribution through liquidation of assets of the

broker added with the maximum allowable contribution from Investor Protection Fund

(IPF) came to Rs32.5 million ± significantly lower than the verified claims, pro-rata

settlement was being offered along with IPF contribution.

Legal documents suggest the affected investors have rejected the KSE offer as

³arbitrary, cruel, shocking and serious misuse of power´ and have declined to sign legal

undertaking not to challenge it in any court of law. They said the KSE floored the market

slide to protect its brokers against the law that required the KSE management to protect

investors. They said the flooring the market was a criminal offence under section 17 of

the SECP Ordinance, punishable for three-year imprisonment under section 24 of the

said law.

The investors said that the language of compensation letter offered by the KSE was

deceptive because it provided legal action by the investors against brokers and

surrendering option against KSE.

They alleged that the SECP and KSE kept pending complaints against the brokers for

seven months that enabled the defaulting brokers to run away with their assets. They

said the investors could not take legal action against brokers and only SECP could do

that.

They said they would fight a legal battle against the SECP and KSE for non-

implementation of demutualisation of three stock exchanges for four years and said the

SECP and brokers were punishable for Rs50 million penalty each under section 22 of

the SECP Ordinance. This ensured a monopoly to the brokers.

Abuse of power

³The way the KSE ignored the unauthorised pledging of clients¶ shares by its member

brokers and intentionally reduced the system audit of brokers to a futile exercise is

abuse of this power. Massive abuse of leverage products by the member brokers and

KSE¶s non-interference in this commission generation lust is abuse of this power´, the

investors said.

They accused the KSE of violating its own regulations. ³Articles IV (24) and article VII of

KSE¶s memorandum of association obligate the KSE to make full payment of investors¶

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claims from IPF and the KSE¶s huge accumulated earnings. KSE has trampled these

provisions´.

They said that section 4 of the SECP Ordinance made it obligatory for KSE to protect

investors and ensure fair dealings in the stock market but the KSE was denying

compensation and led to vulnerability of investors and unfairness in the market. ³By

acting against article IV (24) and VII, the KSE has lost right to exist as corporate entity´.

They said they would take the matter to the Supreme Court of Pakistan to reopen cases

of 56 brokers of KSE, who SECP illegally exonerated from penalty of Rs50 million each

although the offence had been established. ³The matter will extend to demutualisation

and an end to brokers¶ monopoly according to section 2 of the companies ordinance.

The matter will now extend to the cancellation of KSE¶s registration as a stock exchange

and its winding up under section 309 of the Companies Ordinance. The matter will now

extend to banning all leverage products until and unless those who abused them andcaused market crashes are brought to justice´.They said they will seek from the court

the prosecution of KSE board and 103 brokers, who decided and imposed market floor

in August 2008.

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newspaper/business/fbr,-kse-discuss-capital-gains-tax-070

FBR, KSE discuss Capital Gains TaxBy Our Staff ReporterSaturday, 10 Jul, 2010

KARACHI, July 9: Senior members of the Federal Board of Revenue (FBR) led by Member Tax Policy Asrar

Raouf on Friday held a meeting with representatives of the Karachi Stock Exchange (KSE) to resolve issues

related to Capital Gains Tax (CGT).

A consensus was reached to facilitate the taxpayers to ensure widening of tax net and a number of other

decisions were agreed upon to achieve confidence building between the taxpayers and the tax collectors.

During the meeting it was transpired that a sub-committee comprising of members from the FBR and KSE

would be constituted to consider various proposals to avoid hardship to the taxpayers.

It was also agreed that the bureau will also establish a separate cell for facilitation of the foreign investors at

Large Taxpayers¶ Unit (LTU) and Regional Tax Office (RTO) and the information will be shared with the KSE.

The participants also agreed to tax financing income or markup under securities lending and borrowing

regulations, margin financing and any other leverage products as approved by the SECP at the rate of 10

per cent, as full and final tax liability.

Similarly, gain or loss under day trading and trading in derivative products would be subject to CGT under

section 37-A of the Income Tax Ordinance. The FBR team assured the KSE to give due consideration to its

suggestions with regard to carry-forward of capital losses. Other modalities with respect to computation of

CGT were also agreed upon.

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http://dawnnews.tv/wps/wcm/connect/dawn-content-library/dawn/news/business/secp-

takes-legal-action-against-brokerage-firms-issues-warning-letters-jd-05

SECP takes legal action against brokerage firms

Monday, 09 Aug, 2010

ISLAMABAD: In order to strengthen the integrity and soundness of the securities market for the

benefit of the investors and other market participants, the Securities and Exchange Commission

(SECP) is striving to maintain fair, transparent and efficient markets.

The Securities Market Division of the SECP actively monitors the trading activities of the stock market to

check the compliance of prevailing regulatory framework and to investigate potential violations of the

securities laws. This is evident from numerous enforcement cases initiated and actions taken during the

current year, says a statement issued by the Commission here on Friday.

Based on the severity of the offence, strict actions have been taken by the SECP as provided under the law.

In the seven months of 2010, legal proceedings were initiated in seven different cases for violations of

securities laws with special reference to insider trading, short/blank selling, wash trades, erroneous trades

and broker misconduct; the orders were issued after conducting hearings and penalties were imposed under

the Securities and Exchange Ordinance, 1969 and Brokers and Agents Registration Rules, 2001 to the

brokers of the stock exchanges and other market stakeholders.

These orders are available on the SECP website at www.secp.gov.pk/orders.asp. Moreover, in those cases

where the offence has been committed due to trading error/operational mistake, strict warnings have been

issued to the brokers. The SECP has issued warning letters to 27 brokers of the Karachi Stock Exchange and

7 brokers of

Lahore Stock Exchange for possible violations of the blank sales, wash sales, circular trading, cross trades,

broker misconduct etc.

The warning letters are available on the SECP website at www.secp.gov.pk/warnings.asp.

The market participants are encouraged to read these orders/warning letters to develop their understanding

and compliance of the regulatory framework.

In the interest of public at large and in view of the large number of investors complaints mainly pertaining to

the alleged non-transfer of shares and non-payment of funds, the enquiries have also been initiated under

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section 21 of the Securities and Exchange Ordinance, 1969 against the four expelled/defaulter brokerage

houses of the Karachi Stock Exchange during the first half of 2010.

In recent months the SECP has filed criminal complaints in a court against Capital One Equities Ltd and

Cliktrade Ltd, former members of the Karachi Stock Exchange for misappropriation of the clients' assets

including unauthorized pledges of clients' shares and other prohibited activities under the Section 24 (2) of

Central Depositories Act, 1997,

as well as offences under relevant provisions of the Pakistan Penal Code.

The SECP is resolved to pursue its agenda for fair market practices, transparency and investor confidence

for the growth, development and stability of the capital market.

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newspaper/business/stock-brokers-ponder-over-cgt-860

Stock brokers ponder over Capital Gains TaxBy Dilawar HussainTuesday, 08 Jun, 2010

KARACHI: Sullen-faced stock brokers ² about a half of the 200-strong fraternity ² assembled at

the Karachi Stock Exchange on Monday afternoon to ponder over the implications of Capital Gains

Tax (CGT) proposed in the Federal budget 2010-11 announced on Saturday.

The Stock Exchange even otherwise a noisy place, it is always difficult to discern coherence in various voices

heard.

But the grudge of most members participating in the meeting, seemed to be centered on the timing of the

imposition of CGT.

Abid Ali Habib, a sitting director on the board, airing his own views (and not necessary of the board) said

most members argued that the new tax cannot have come at a worst time.

The volume of business at the KSE had shrunk to an average of 70 million shares, from 500 million two

years ago; the stream of Initial Public Offerings (IPO) had almost dried up as entrepreneurs were reluctant

to enter the market to mobilise resources. Besides, the number of investors in stocks had hugely shrunk.

Global markets troubled by state debts were in a tailspin.

He said that modalities of the CGT payment were yet to be understood, but members generally showed

displeasure over the requirement to file quarterly statements and pay advance CGT instead of assessment

and payment on the net income at the end of the year.

Hasnain Asghar Ali, head of sales and research at Aziz Fida Husein & Co, added that the onus of filing of

quarterly returns and payment of CGT has been placed on the clients ² and not the brokers ² which would

bring the former in unnecessary contact with the taxman, raising apprehensions of harassment, mainly inregard to the disclosure of sources of funds.

The government hopes to raise Rs50 billion from the levy of CGT, which members said was too optimistic a

target.

The meeting was told that a representative of the Federal Board of Revenue (FBR) would visit the KSE next

week and discuss members¶ reservations over the budgetary measures on stocks. A disconcerting issue

raised by some big brokers was regarding the mode of payment of CGT by the foreign investors and

adjustment for currency depreciation.

The management agreed to the members¶ demand of looking into the Indian model of yearly payment, after

seeking consent of foreign investors.

³Would the overseas investors otherwise want to enter into the hassle of payment of CGT and

documentation after every three months?´ a broker asked.

Those toeing the official line argued that CGT conformed to international best practices; provided

transparency to source of funds and trading and was a necessary step towards market reform.

One broker on that side of the fence thought that it was too late for the brokers to raise hue and cry over

the CGT for the figures were already incorporated in the budget: ³Of what use is it to close the stable door

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when the horse has bolted?´, he asked. But another argued that it was still possible to block the levy before

the budget was translated into Finance Bill 2010-11 by the Parliament.

³If the CVT ² also an IMF prescription ²could be deferred, why not the CGT?´ he asked.

On another note, many brokers, including some of the stalwarts, also cried fowl over the Government and

regulators¶ act of pushing aside the KSE demand of introduction of Margin Trading (the variant of the CFSMK-II or µbadla¶ shorn of its 21 identified defects) and according approval only to the Margin Financing.

³We had proposed three products of which two, the Margin Financing and Shares lending-borrowing were

considered by the apex regulator, setting aside the more important Margin Trading ( µbadla¶), complained a

broker who participated in the meeting.

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http://dawnnews.tv/2002/03/01/ebr6.htm

March 1, 2002 Friday Zilhaj 16, 1422

KSE recomposes 100-index

By Our Staff Reporter

KARACHI, Feb 28: The Board of Directors of the Karachi Stock Exchange, in its meeting onFebruary 27, reviewed and approved recomposition of the KSE-100 index, based on theRecomposition Rules and Procedure laid down for the purpose, a press release, issued by the bourse on Thursday, said.

The revised index would be implemented from March 18.

According to the recomposed index, five companies, out of the 100, would be affected. In termsof Market Capitalization Rule (time base) five companies have entered the index, replaced by anequal number who have been removed, having met the criteria of 2 consecutive re-composition periods.

Companies to enter include: First Grindlays Modaraba; ICI Pakistan: Jahangir Siddiqui & Co;Dreamworld Ltd and American Life Insurance Company, while those to leave include CrescentInvestment Bank; Fauji Fertilizer; Japan Power Generation; Chakwal Cement and Hinopak Motors.

In terms of sector rule, three companies have entered and an equal number removed, on thecriteria of being the largest stocks in the respective sectors and minimum of 10 per cent greater in capitalization and value than the present largest in the sector. The three companies to enter include: Fayzan Manufacturing Modaraba; Fauji Fertilizer Company and Haydari ConstructionCompany. The three to leave were; First Grindlays Modaraba; ICI Pakistan and Pak GermanPrefabs.

The KSE stated that the recomposed index based on the prices of December 31, 2001 wouldcapture the market capitalization to the extent of around 82 per cent of the total marketcapitalization as compared to 81.40 per cent of the current index.

The KSE press statement also listed the revised list of 100 companies in the recomposed index.

These include one from mutual fund; two modaraba; one leasing; 15 banks & financialinstitutions; six insurance companies; two textile spinning mills; one textile weaving; eighttextile composite; one woollen; six synthetics & rayon; one jute; one sugar & allied; five cement;two tobacco; 13 from fuel & energy; one engineering; six from auto & allied; one cable; threetransport & communication; 13 from chemical and pharmaceuticals; three paper & board; onevanaspati; one construction; one leather; four from food; one glass and four companies from themiscellaneous sector.

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newspaper/business/13+kse-puts-broker-membership-card-on-sale-920-za-09

KSE puts broker membership card on saleBy Dilawar HussainTuesday, 09 Feb, 2010

KARACHI: The Karachi Stock Exchange placed on the table a broker membership card, ostensibly

for sale to the highest bidder.

Bids were invited on Monday, from eligible individuals and corporate bodies, financial institutions/banks

(local & foreign).

The market is watching with interest the possible price that an interested party would be willing to pay for

the card in these uncertain times.

A stock broker, who asked not to be named, pondered over the question for a while and then put the

current value around Rs60 to Rs 80 million.

³If that is not as good as 146.15 million that one willing buyer paid for a card at the end of 2007, it is

unlikely to have dipped any lower than Rs60 million,´ he says.

Veterans recall how the broker membership card that had gathered decades of dust, suddenly turned to gold

in early nineties.

From just around Rs0.5 million until the doors were thrown open to foreign investors in those distant days,

the price of the broker card raced to the staggering value of Rs160 million. Among the 200-broker fraternity,

there were several who hurriedly pulled down old trunks to fish and dust the cards to exchange them with

willing buyers for a fortune.

Thus, were born many stories of rages to riches. But all of those turned sour at the crash of the market in2008.

It was probably in November of that fateful year that the price of the broker membership hit the pit. One of

the two cards of the fallen brokers, Sikandar Ismail Bagasra and Ismail Abdul Shakoor, whose brokerage

houses were declared µdefaulters¶ by the board of directors of the bourse fetched as little as Rs55 million.

The market price of the broker¶s membership depends upon the volume of shares traded, says an equity

trader.

³At the height of its value, the daily average turnover at KSE was around 400 million shares, which has now

slipped to just around a 150 million stocks,´ he says.

An analyst observed that the dip in value of membership card in 2008 was partly on account of the stockcrisis and partly to the sense that µdemutualization¶ of the exchange may have been put off to a very distant

date.

³Demutualization had raised the prospects of foreign investors¶ interest in acquiring stakes in the exchange,

which would have made membership card of KSE, the largest bourse in the country, an invaluable asset,´ a

member said.

And the µinvitation to bid¶ issued by the bourse on Monday, mentioned demutualization as if it was near at

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hand: ³Any company or individual who fulfils the given criteria and wants to take benefit of Demutualization

(last three words underlined) may send bids..´, so said the KSE. Yet, many skeptics at the market shook

their heads with disdain over the possibility of a near term demutualization.

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Documents

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