At present, 45 per cent of foreigners’ money is invested in state owned explorers Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL), according to Topline Securities.
This shows that foreigners are keen in oil and gas sector, particularly when energy demand is growing in the sector.
Foreigners are net buyers in the local market for the last 16 months in a row with a net buying of $412 million in 2010 till date. Interestingly, their focus has been largely limited to few stocks, said Topline Securities analyst Farhan Mahmood in the company research report.
Foreigners must be switching from OGDC to PPL as it may result in better than expected returns in the long run, added Mahmood.
Beside the company’s new aggressive drilling strategy in 14 newly awarded blocks and likely acquisition of BP assets could be the major triggers for PPL, said Mahmood.
Offshore investors which had 300 million shares of OGDC that is 48 per cent of free float in June 2009 increased their holding to 496 million shares till June 2010, according to recent audited accounts.
With S$132mn net buying in fiscal year 2011 to date, foreigners must be holding more than 500 to 520 million shares, 80-83% of free float, said Mahmood.
Similarly, during last one year foreigners remained aggressive in country’s second biggest energy explorer PPL.
Offshore investors hold 89 million shares as of June 2010 against 67 million shares last year.
However, after adjusting 20 per cent bonuses and foreign flows in fiscal year 2011 till date, their holding might be around 110 million shares, 45 per cent of the free float. Thus, foreigners now own 9 per cent of their total investment in PPL.
Published in The Express Tribune, October 16th, 2010.
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