KARACHI, Feb 8: The market capitalization of Karachi Stock Exchange (KSE) has crossed $33 billion and will further enhance by Rs25 billion or $400 million after the addition of 176 million shares of Kot Addu Power Company Ltd to the market.
This was stated by the Minister for Privatization and Investment Dr Abdul Hafeez Shaikh while speaking at the first road show for the initial public offering (IPO) of Kapco share here on Tuesday.
The subscription of Kapco would begin from February 21 to February 24, 2005 (both days inclusive) while the provisional trading in the scrip will start from February 14, 2005 after the announcement of half yearly accounts of the company on February 11, 2005.
The minister pointed out that the number of individual investors in the stock market has increased from 100,000, one and a half year ago, to one million.
He noted that the privatization has added about 400,000 small share holders in the last two years. This is the effort of the government to bring in more individual small share holders to the stock market under its "privatization for people" programme, he added.
He said that the government has provided 400,000 shares worth Rs17.5 billion to the people of Pakistan and the value of these shares has enhanced by Rs30 billion in just one year, Rs28 billion through gains and Rs1.5 billion through cash dividend.
Dr Hafeez said that Kapco was the most important transaction of the Privatization Commission and 316,000 applicants will be able to get 500 shares each.
He urged the media and stock brokers to publicize this transaction and encourage maximum number of people to participate in the IPO and take the advantage of the privatization.
To a question, the minister said that the lead manager Global Securities will set up a hot-line booth with 10 telephone numbers to attend complaints of interested applicants against banks branches which refuse to entertain the applications for Kapco shares.
He said that the government will take immediate action on these complaints. In addition, they can also call Privatization Commission, he added.
To another question about the high fee of Central Depository Company (CDC), the minister said that the matter was under consideration to lower this fee.
He said that the balloting of Kapco shares will be held within ten days of the close of subscription.
Dr Hafeez said that 29 expressions of interest (EOIs) have been received for National Refinery Ltd while the last date for receiving EOIs for PSO is March 4, 2005.
Chief Executive of Kapco Malcolm Peter Clampin said that the company has the solid background of profits and efficiency, catering to the 7 per cent energy requirements of the country with a share of 29 per cent in the total power generation of IPPs in Pakistan.
He pointed out that the company with a shareholding of both Wapda (64 per cent) and National Power (now International Power) of UK with 26 per cent management share.
Kapco plant with a capacity of 1600 megawatts, is a multi-fuel fired power station running on gas, fuel and furnace oil simultaneously to avoid interruption in production and also to reduce cost of generation.
It was pointed out that Kapco has a tax exemption till June 27, 2006 while its earning per shares has increased from Rs6.2 in 2003 to Rs7.86 in 2004.
The Privatization Commission will offer 10 per cent shares (88.025 million shares) in the initial public offering and another 10 per cent or 88.025 million shares under a green shoe option in case of oversubscription.
About 20 per cent of the total public offering will be allocated for Kapco employees.
The Federal Minister for Privatization and Investment Dr. Abdul Hafeez Shaikh will open the second roadshow for Kapco shares in Lahore on Wednesday.
The event will be attended among others by officials from the Privatization Commission, office bearers and members of Lahore Stock Exchange and potential investors.
The offer price per share has been fixed at Rs 30 per share, and applications can be submitted for 500 shares only, requiring an investment of Rs15,000 per application.- APP