Pakistan’s KASB Securities Drops by Limit on Business Suspension

Pakistan’s KASB Securities Ltd. fell by the daily limit as the market regulator suspended its trading operations after the government put a group banking affiliate under a moratorium.

KASB Securities shares dropped by the 1-Pakistani rupee limit, or 14 percent, to 6.2 rupees (6 U.S. cents) after the Securities and Exchange Commission of Pakistan asked the Karachi Stock Exchange in a statement yesterday to halt KASB’s operations until further orders. The fall is the biggest in almost three years. The benchmark KSE100 Index rose 0.9 percent.

Pakistan’s government placed KASB Bank Ltd., the country’s second-smallest lender by market value, under a six-month moratorium on Nov. 14 because of its financial health. KASB Securities, which has more than 22,000 local and overseas clients, handled about 20 percent of total foreign trades on the Karachi Stock Exchange over the past five years, according to a statement issued yesterday.

“There won’t be much impact on transactions as people will divert their business to other brokers,” Muzzammil Aslam, managing director at Karachi-based Emerging Economics Research, said by phone today. “It is a dent to the credibility of the brokerage, which will find it hard to make clients understand.”

KASB Securities uses KASB Bank services for a majority of its banking arrangements, including the daily clearing of transactions executed on the Karachi Stock Exchange, according to the statement. The regulator has asked the exchange to monitor and ensure that KASB Securities makes arrangements for timely payments to clients, to whom money is payable, upon demand.

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