April 6, 2006	Thursday	Rabi-ul-Awwal 7, 1427

KARACHI, April 5: The price of the stock in Bank Al-Jazira has climbed by a steep 28 per cent or Saudi riyal (SR) 417 (equivalent to Rs6,664) in five trading sessions in April, despite a drop of SR39 on Wednesday. The issue is important in relation to National Bank of Pakistan (NBP), which holds 875,000 shares or 5.83 per cent of the equity in the Saudi bank. The increase in Bank Al-Jazira stock price translates into incremental gains of Rs5.8 billion to NBP in five days (875,000 shares x SR417 x Rs15.98).

The market price of Al-Jazira share, which is traded on the Saudi Stock Exchange stood at SR1,470 on Saturday, April 1 and closed at SR1,887 on Wednesday, April 5.

NBP has plans to open branch in Saudi Arabia, but the permission by the Saudi Arabian Monetary Agency (SAMA) is subject to the divesting of its holdings in Bank Al-Jazira. “Accordingly, the board of directors of NBP has authorized the management to initiate the process of disinvestment at the “best possible price” in coordination with SAMA”, a decision of the NBP board on Feb 25, conveyed to the Karachi Stock Exchange, through a notice, stated.

NBP is believed to be hunting for an appropriate adviser to hire their services to help sell stakes in the Saudi bank. Several world-renowned names of investment advisors, including at least three of the world’s big four accountancy/advisory firms, were understood to be on the list. NBP is yet to disclose where the matter currently stands. But given the increasing market price of its stake in Al-Jazira (up from Rs20.6 billion to Rs26.4 billion in April alone) due to improving Arab markets, NBP may not be in a great hurry and waiting for “the best possible price” before attempting to get the deal through.