Investment: Islamabad power utility to get listed on London bourse

LONDON: “Shares of the Islamabad Electric Supply Company will be listed on the stock exchange in the next 45 days”, said the Minister for Privatisation Senator Waqar Ahmed Khan. He was talking to Express News at an event hosted by the London Stock Exchange on Pakistan Privatisation and Capital Markets Forum. The purpose of the event was to highlight investment opportunities available in Pakistani public and private sector companies to London-based investors.

As keynote speaker at the Forum, the minister stressed the cross party support for the government’s privatisation programme which, he said, was given the unanimous approval of the parliament.  “There is a dedication towards political reconciliation,” he said assuring potential investors of economic stability and continuity of policies.

In his speech the privatisation minister pointed out the range of opportunities available to investors, highlighted the benefits of Pakistan’s geo-strategic location and the range of human and natural resources available in the country. He explained the Privatisation Commission’s plans to raise $1.5 billion next year through the sale of equity linked instruments for OGDCL and PPL.

Speaking to The Express Tribune about the privatisation programme the minister mentioned a range of strategies that will be employed including corporatisation, listing of companies and management outsourcing.

Explaining the concept of management outsourcing Senator Waqar Ahmed Khan said: “Instead of paying upfront for a strategic 26% of the company, the investor will guarantee the government a certain amount of money that it will improve the company in certain stipulated ways. If the ‘investor’ achieves these aims, it will have the option to buy into the company. In the event of failure, the government would be entitled to compensation in the form of liquidated damages”.

Questions by the audience after the minister’s speech focused almost entirely on concerns about corruption. Speaking to The Express Tribune the minister said the proper concern should be about efficiency which will be addressed once the companies are handed over to private management.

The event, which was held in association with Pakistan’s privatisation ministry, BMA Capital and Nomura, attracted over 120 participants  including representatives from Morgan Stanley, JP Morgan, and Goldman Sachs.

The privatisation minister’s speech was followed by presentations by founders of BMA Capital Moazzam and Mudassar Malik. Under the slogan “Pakistan Rising” they supported their argument that there are high returns to be made by investing in the Karachi Stock Exchange by looking at data from the last decade. Eight companies then gave brief presentations as well as holding one to one meetings with potential investors.

CEO BMA Moazzam Malik expressed his satisfaction with the event. “There is a big gap between the perception people have of Pakistan and its reality,” he said. “Our aim is to attract people to invest in Pakistan as opposed to investing in other parts of the world. The turn-out has been good and we’ve met people who are looking at Pakistan for the first time.”

The event was opened by Michael Bear, the Lord Mayor of the City of London. Senator Wasim Sajjad, Leader of the Opposition in the Senate; Senator Adnan Shah, Senate  Chairman standing committee on privatisation and members of the Committee Senator Ilyas Bilour and Senator Imtiaz Shaikh also participated in the forum.

A total of 11 Pakistani companies part took in the Forum, including PPL,OGDCL, Hubco, Engro Corporation, MCB Bank, UBL, Lucky Cement, KESC, Islamabad Electric Supply Company (Iesco), Pakistan Railways, and Pakistan Steel.

Published in The Express Tribune, December 12^th, 2010.