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ISE appoints TAIB as consultant

August 13, 2012

ISLAMABAD, Aug 13: Islamabad Stock Exchange on Monday appointed Trans-Arabic International Bank (TAIB) of Bahrain as its consultant for valuation of the exchange, taking it a step closer towards demutualization.

TAIB Bank is an international investment bank which is listed on Bahrain’s Stock Exchange. Dubai Financial Group holds 58 percent shareholding in the Bank and it has presence in five countries including Bahrain, India, Turkey, Dubai and Kazakhstan.

The Karachi Stock Exchange already hired Deutsche Bank as its consultant for valuation of KSE, and Lahore Stock Exchange chose a consortium of United Bank Ltd (UBL) and National Bank of Pakistan.

The appointment of a consultant for the country’s three stock exchanges was required under the Stock Exchange (Corporatisation, Demutualisation and Integration) Act 2012.

“We recently held a meeting with our consultant in Dubai last week, and it is clear that out targets are as per the time line established the SECP (Securities and Exchange Commission of Pakistan),” said Haji Ghani Haji Usman, chairman of the KSE committee to oversee the demutualisation process.

The final date, set by SECP, for demutualization is September 3, 2012.

SECP official said that the valuation exercise would pave way to attract strategic investors for buying 40 per cent shares of the demutualised stock exchanges.

Under the provisions of the Demutualization Act, the remaining 40 per cent and 20 per cent shares of the stock exchanges would be sold to the existing members (brokers) of the exchange and to the general public.

The SECP official said that the valuation of stock exchanges made by their consultants would remain confidential; however brokers said there were some numbers floating around.

“We have heard that the value of KSE would be determined to be little less than Rs8 billion and the ISE would be valuated at around Rs3.5 billion as they have an expensive building, but the LSE is to be around Rs1.3 billion,” said a broker at LSE.