KARACHI, Sept 8: Three months since the resignation of last managing director M. A. Lodhi, the members of Karachi Stock Exchange are still out peering on the road to Islamabad for signs of arrival of the new MD.

The rules suggest that the KSE forward three names, one of which is then selected and approved by the apex regulator, the Securities and Exchange Commission of Pakistan (SECP).

It took a while this time for the KSE to recommend the names -- “in search of quality”, says a broker director.

But as quality has a price, the person who would now hold the office is understood to have been offered a sum of Rs26 million a year (Rs 1.8 million a month) including amenities and three bonuses. For the ‘poorly’ bourse, it is extravagant. The previous men in that chair were paid a third of that sum.

Around four dozen candidates had applied for the job in response to quarter-page advertisement in newspapers. The board summoned and interviewed a dozen and sent the name of Adnan Afridi, the chief executive of Overseas Chamber of Commerce, to the SECP. That was at the fag end of August. The SECP asked for two more names, from among which to approve one. That was all in accordance with the law.

The two other short-listed names forwarded to the regulator were those of Shamsul Hasan, former head of corporate, investment banking and treasury, Union Bank, and Fakhir Rehman, Chief Executive Officer (CEO) of Premier Insurance Limited. And things stand at that.

Without a permanent captain, the KSE is rudderless. But that should no longer be the case. The sea of ‘political uncertainty’ has already washed away 13 per cent of the value of stocks. The KSE-100 index has plunged by 1795 points in two months from its 12-month high at 14202 points on July 13 to 12,407 on the last trading day on Friday. As every market pundit fears, there are rough waters ahead.

It is not the duty of the board to run the affairs of the exchange; that lies squarely on the management. As such it seems wondrous that a bourse now valued at no less than Rs 3.6 trillion (US$ 59 billion) could manage day-to-day affairs without a permanent MD in the chair.

One possible reason could be the ‘extra-ordinary’ brotherly relationship that the broker community has had the pleasure of enjoying of late, with the chief regulator, SECP. In the past, that rarely had been the case.

In times of trouble, it had always fallen to the lot of MD to broker peace between the board and the apex regulator. The MD at such times was torn between the loyalty he owed to the

SECP and protection of

(genuine) interests of the stock brokers.

That is just one of the many difficult tasks that the MD has to perform; transparency; technology and staffing also fall under his purview. But for the kind of money that is now on offer, the work does not look so terribly difficult.

The stock exchange grapevine also suggests that major players and members on the board are pushing forward their own favourites for the job. But the choice eventually rests with chairman, Razi-ur-Rehman Khan, of the SECP.

“All in good time, all in good time....in a week perhaps,” Mr. Razi replied on Saturday in answer to a query on how long would it take to fill the gap in management at the country’s main bourse.