KARACHI: The parent company of Nestle Pakistan mopped up as much as 2.55 per cent of the total issued shares from the Pakistan Stock Exchange (PSX) on Tuesday at a price of Rs6.94 billion.

In a regulatory filing, the biggest listed food company in terms of market capitalisation said that Société des Produits Nestlé S.A., which owned more than 59pc shareholding at the end of 2020, purchased another 1.15 million shares at Rs6,000 each.

Speaking to Dawn, Topline Securities CEO Mohammed Sohail said the transaction is a sign of future cash flows. “Sponsors buy shares when they feel that there’s value in the company. This shows their confidence,” he said, adding that multinationals have been buying back shares in other markets as well.

The company generated a net profit of Rs5.7bn in the first six months of 2021, up 49.2pc from a year ago. Its revenue increased 12.7pc to Rs65.8bn during the same period.

Under the existing rules, the holding period for the transaction is over six months. It must deposit the profit with the regulator in case the buyer sells the newly purchased shares within six months.

The share price of Nestle Pakistan rose 7.5pc to Rs6,073.75 on Tuesday.

Published in Dawn, September 8th, 2021