Pakistani brokers face risk of default

Karachi: Pakistan's National Clearing Co., which handles all of the nation's stock transactions, said a tenth of brokers are at risk of defaulting on share payments after the benchmark index plunged 24 per cent in the past seven days.

"Around 20 brokers from the Karachi Stock Exchange are heading for default," Mohammad Shoaib Memon, a National Clearing board member, said in an interview on Tuesday.

There are 200 brokers at the Karachi Stock Exchange.

Benchmark falls

The benchmark Karachi Stock Exchange 100 index fell for a seventh day to a three-year low yesterday following the easing of trading limits on December 15.

Brokers are facing defaults after a court in Karachi had ordered them to each provide Rs50 million (Dh2.4 million) of bank guarantees on share purchases.

The Karachi Stock Exchange on December 15 ended a four-month- old restriction on stock trading that was aimed at preventing the benchmark index from falling below its August 27 level.