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.

“If 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 in 2008.

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 ‘defaulters’ 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.

“At 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 stock crisis and partly to the sense that ‘demutualization’ of the exchange may have been put off to a very distant date.

“Demutualization 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 ‘invitation to bid’ issued by the bourse on Monday, mentioned demutualization as if it was near at hand: “Any 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.

Courtesy by dawn.com