As many as three global financial companies, including Citibank, Credit Suisse Group and JP Morgan have abandoned their brokerage operations in Pakistan’s financial capital Karachi amid the nation’s bleak economic situation, says a media report.
Citigroup closed its equity research office in Karachi in March. However, the spokesperson of the US-based bank declined to comment on the development. Switzerland-based Credit Suisse Group also shut down its research operations in the port city earlier this year, and that followed JPMorgan Chase’s decision in late 2008 to suspend its brokerage operations in Karachi, the Wall Street Journal reported.
A spokeswoman for Credit Suisse said the bank closed its research division but was covering Pakistan companies from Singapore. JPMorgan retains a seat on the Karachi exchange but was not active in Pakistan, a spokesman said.
The report described the closures as a “further blow” to Pakistan’s financial community at a time when the country’s finances are struggling. Pakistan was forced to call in the International Monetary Fund (IMF) in November 2008 due to a balance of payments crisis sparked by a rising oil import bill.
Responding to Pakistan’s request, IMF earmarked $11.3 billion for the country, which has pledged to slash its government deficit and get inflation under control. The Wall Street banks began operations in Pakistan’s equity market in late 2006 after the economy grew by an average of 7 per cent for several years, fuelled by liberalisation of the banking sector and a consumer spending boom.
