Karachi, Nov 11: The Karachi Stock Exchange on Tuesday invited ‘bids’ for purchase of two cards of the fallen brokers, Sikandar lsmail Bagasra and Ismail Abdul Shakoor, whose stock brokerage houses were declared ‘defaulters’ by the Board of directors of the bourse at its meeting on Monday.

Up until the market turmoil began early this year, the rise in price of the brokers’ membership card knew no bounds. A market participant said that the 200-member strong broker fraternity held that prized possession costing as much as Rs 150 million a piece. The value had since taken a big plunge, with the present price believed to be in the range of Rs50 to Rs60 million.

Analysts said that the dip in value of membership card was partly on account of the stock crisis and partly to the sense that ‘demutualisation’ of the Exchange may be put off to a very distant date. “Demutualisation had raised the prospects of foreign investors’ interest in acquiring stakes in the demutalised exchange, which would have made membership card of KSE, the largest bourse in the country, an invaluable asset”, a member admitted. But the past five months had seen the equity market take the heaviest beating in history. What actually was the price which an interested party was willing to pay for the broker card at such an uncertain time, would be known only after the highest bidder makes his offer and receives acceptance of the Exchange.

Bids have been invited by the KSE from “individuals and eligible corporate bodies, financial institutions/banks (local & foreign). And in doing so the bourse appears to be in a hurry as only two days have been given for the bids to be made, latest by Thursday, Nov 13 up to 1 pm, along with a pay order for advance payment of 10 per cent of the amount offered.

KSE notified that the applicants selected for the membership would have to pay the balance amount of their bid within three working days from the date of demand by the Exchange, failing which the advance payment would be forfeited.

The bids for sale of cards were called after the KSE Board went on to endorse the Nov 6 decision of the National Clearing Company of Pakistan (NCCPL) which had declared Bagasra Securities (Pvt) Limited, and Ismail Abdul Shakoor Securities (Pvt.) Limited, both Corporate members of the KSE as “defaulter” under regulations on failure to pay final loss amount within the time specified in the NCCPL’s final notice. NCCPL provides and monitors access to the NCC systems. According to the NCCPL records the final loss remaining unsettled by Bagasra stood at a huge Rs 51.4 million as on the close of business on Nov 6, after the recovery of Rs 1.6 million, of what NCCPL called “selling out of retrieved shares”. The final loss remaining unpaid by Shakoor at the end of the specified time amounted to Rs 5.4 million after the recovery of substantial sum of Rs 8.3 million through the selling out of retrieved shares. Considering the assumed accumulation of wealth over four years of bull run at the market prior to the current pull back since April this year, many thought that Rs 5.4 million looked like a measly sum for settlement. Why then did Ismail Abdul Shakoor opt to default? A telephone call made at the residence of the broker was attended to by a child who ran off for a moment only to return with the answer: “wrong number!”