Friday, November 14, 2008

KSE card purchased for Rs 55 million at auction

One of the cards of two Karachi Stock Exchange (KSE) members, whose brokerage houses defaulted, is auctioned at Rs 55 million on Thursday.According to a director of board of exchange, MMM a commodity, which mainly operates in rice trading secured the card by offering the highest bid among the four bidders.KSE invited the bids from individuals and eligible corporate bodies, financial institutions/banks (local & foreign) couple of days back for sale of cards of Sikandr Ismail Bagsara and Ismail Abdul Shakoor, who defaulted on failure to honour their debt obligations.

The bids were invited after the KSE Board endorsed 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.According to the NCCPL, the final loss remaining unsettled by Bagasra stood at Rs 51.4 million as on the close of business on Nov 6. 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.Sources said that the second card could also be auctioned in next two to three days and it could fetch more or less the same amount.

The market participants also anticipated the amount in the range of Rs 50 to Rs 70 million.The value of membership card of the KSE also plunged with the steep decline in the stock market since April this year.The value of the membership card also shoot up to over Rs 130 million in the heydays of the market and dropped massively with the current turmoil. Sources said that the default does not seems to be limited with these two members as more members are on the brink of this situation if the much-talked market stabilization was not activated soon.

The total strength of KSE members is 200."The financial situation of five to six members is particularly precarious because they are badly trapped in CFS market and are unable to meet their obligations in the current situation," sources said.Meanwhile, the meeting between KSE board and SECP remained inconclusive on the decision of floor removal.

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