Pakistan Stock Exchange is going to sell 40% of its stake to investors, foreign and local alike. The bourse will be open to bids starting December 5th this year.
17 bids have been submitted by the investors right now.The foreign investors include a consortium of NASDAQ, as well as two British-based funds. A Chinese consortium is also taking part in the bidding, with Shanghai and Shenzhen Stock Exchanges in as well.
The local bidders include MCB, Allied Bank, Pak-Kuwait Investment Company, Pak-Oman Investment Company among others. The local bidders can not bid for more than 5% of the share according to State Bank, SECP and PSX laws.
After the initial sale of the 40% stake, PSX will offer to sell 20% more of its share to the general public, 6 months after the completion of the initial acquisition.
The deadline for the completion of the bidding process is 27th December 2016 for the initial 40% stake.
Benefits to The Bourse
According to former PSX director, Haji Ghani Usman, having another owner with management control will boost investor confidence in the market. He claimed that this would help take the stock market up to 50,000 points by June 2017. As capital inflow will increase, the market will become much more stable ensuring a conducive environment for initial public offerings.
The bids are estimated to be between the range of $140-220 million, according to Insight Securities’ analyst Zeeshan Afzal. He is optimistic that PSX will attract $1-1.5 billion of fresh liquidity next year.
