November 25, 2007	Sunday	Ziqa’ad 14, 1428

KARACHI, Nov 24: Stock brokers glance with a yawn at the schedule of elections of directors to the Board of Karachi Stock Exchange, pasted on the notice board. Less than two weeks from now, the 200-member strong brokerage fraternity is to elect five member directors from nine who have filed nominations. Yet there is hardly any visible campaigning.

Quite in contrast veterans recall time when there used to be tons of hustle and bustle starting several months before the elections at the bourse. Active campaigning, group formations on the basis of ‘biradari’ and common thought (and interest), and the last minute suspense before result announcements were all part of the spicy event.

So what has happened to dampen the enthusiasm of money-minded men at the exchange? “Ever since the board was saddled with four non-member directors under the capital market reforms, the broker power has been diluted,” says a major market participant, adding “and so has their interest”.

Regardless of the broker revolt, the then chief regulator was able to break the all-member monopoly and push through four non-member directors on the board in 2002. Three years later, the broker fraternity lost more voice when under the similar reforms, it was stipulated that a non-member director would hold the post of chairman of the bourse in place of the broker director. There was again a lot of sound and fury but the brokers had finally to give in.

Several big names, who used to vie for the coveted post of President, later the chairman of the Exchange have now thought it fit to concentrate on making money through business expansions. The Exchange premises reverberate with talks of numerous stories of rags to riches.

And as times change, the KSE is no longer a sleepy place; its market capitalisation growing tenfold in as many years, from Rs44 billion to Rs4.4 trillion. Big players have, at least on the face of it, opted out of internal politics.

Until the demutualisation of the Exchange, the plan for which keeps shifting ahead, the worth of a stock broker’s membership card represents the money-power that they wield. Knowledgeable sources say that the last card changed hands at Rs120 million two months ago.

Four years back, when the then management auctioned a couple of unclaimed cards to obtain funds for renovation of the buildings, at the last call the buyers were willing to pay no more than Rs35 million a piece.

“But before anyone starts to get jealous over the fortune of brokers who hold the KSE cards, they ought to look around at the phenomenal rise in value of other assets as well”, says a member. To prove his point, he mentions escalation in prices of property, commodity and gold.

Last year, as many as 43 memberships changed. But brokers say most of those represented individuals turning to corporate entities; a few were among the 30 inactive brokers and they thought it fit to reap the bounty. And a couple of members became victim of crumbling of the joint family system and had to dispose of their cards so as to distribute proceeds among bickering siblings.