ISLAMABAD, Sept 8: Pakistan has decided to enter into international equity market to get its major state sector enterprises enlisted with American Depository Receipt (ADR) in New York and General Depository Receipt (GDR) in London and Lxuemburg.
Official sources told Dawn that a number of international banks and financial institutions have expressed their willingness to introduce Pakistan in the international equity market.
The decision to enter into the equity market was taken after the success of euro and sukuk bonds floated by the government that brought $1.7 billion ($ 1.2 billion sukuk and $500 million euro bonds). In this regard a decision was taken that the government would float bonds after every 12 to 15 months period.
Sources said that the officials of an international bank gave a presentation to the senior officials of the ministry of finance on Thursday to act on behalf of Pakistan for introducing the country in the international equity market. A number of other international banks and financial institutions were expected to also shortly give their presentations over the issue.
Economic Advisor to the ministry of finance Dr Ashfaque Hasan Khan said that now the portfolio investors would be attracted to invest in the equity market being acquired by Pakistan.
“You have to enter in the international equity market through some inter-mediatory and that is why today we took a presentation from one of top international banks,” he said adding that it would not be good to disclose the name or names of the banks unless finalized by the government.
Dr Khan who is also the director general of Debt Coordination Office explained that the current world equity market was worth of several trillion dollars and Pakistan could also benefit from it keeping in view its improved economic position and successful floating of euro and sukuk bonds.
Responding to a question, he said that Pakistan’s major state sector entities would now be assessed whether they were adhering to international standard practices and good accounting procedures.
“This is a type of privatization for our state sector corporations whose share will be enlisted at ADR and GDR through a lead manager who is still to be selected by the government,” he said adding that the process has started for finalizing a name of some reputed international bank.
In reply to a question, Dr. Khan said that the sole purpose was “not” to manage funds but to continue introducing Pakistan in the bond as well as in the international equity market.
He gave the example of China who despite having billions of dollars foreign exchange reserves has just entered in the international equity market. Petro China, he said, which is China’s top oil and gas company has floated its shares worth $2.4 billion in the international equity market. As many as 3.1 billion shares were sold by Petro China, which according to the economic advisor, was a great success of the booming Chinese economy.
Dr Khan said that a number of state sector companies were already enlisted with Karachi Stock Exchange but now they would also be got enlisted in New York, London and Luxermberg. He agreed that public sector companies will have to improve their performance for getting themselves enlisted with ADR and GDR. “Only those companies will be given preference who enjoy certain reputation,” he said adding that it was yet another good opportunity for Pakistan to appear at the international radar screen and benefit itself accordingly.
