Pakistan Strategy: Ambitious GoP to restart privatization machinery, (AKD Daily, Sep 16, 2019)
- We look back at historic privatization transactions showcasing prominent stake sales from 1991 onwards highlighting the vast differences amongst private sales prevalent prior to 2010 and capital market transactions in favor since
- Citing an ambitious strategy to reduce fiscal imbalances, the GoP has embarked on a decisive strategy to offload public assets, in effect the clearest move yet to restart the privatization process after a hiatus of four years (NPCC transaction completed in Sept’15).
- While the current privatization transaction pipeline heavily favors unlisted private entities including properties and specialized financial institutions, we believe strategic buyers are likely to view these as distressed assets with additional capital commitments necessary to revive such assets likely reducing their purchase price
- In terms of buyer appetite, capital market transactions (although limited) may not yield the same appeal as they have in the past, where apart from wider market forces, idiosyncratic developments hurt stock prices (circular debt accretion amongst E&Ps, offshore dry hole), where we await the IMF’s second review of the ongoing EFF program (likely released in Jan’19) for a firm list of privatization entities with possible guidance on a timeframe for transactions.
AKD Research
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AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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