Pakistan to become Chinkistan - China buys 40% stake in Karachi Stock Exchange

A consortium led by Chinese firms has signed a strategic agreement to acquire 40 per cent equity of Pakistan Stock Exchange for $85 million, in a move aimed at mobilising funds for the $46-billion CPEC project and facilitating China's entry into the Pakistani capital market.

The Sale and Purchase Agreement (SPA) was signed yesterday in the presence of Finance Minister Ishaq Dar in Karachi.

The consortium comprises Chinese Financial Futures Exchange Company Ltd (lead bidders), Shanghai Stock Exchange, Shenzhen Stock Exchange, and two local partners Pak-China Investment Company and Habib Bank Ltd, Dawn reported.

It had won by placing the highest bid of 28 rupees a share for 320 million shares at a price consideration of Rs 8.96 billion ($85 mn) when the stake was put forth in December.

The PSX also plans to launch infrastructure bonds which would be predominantly be used for the $46-billion China- Pakistan Economic Corridor project, that passes through the Pakistan-occupied Kashmir (PoK).

Speaking on the occasion, Dar said the government had set up a 'Pakistan Development Fund' aimed at financing the infrastructure development projects in the country.

"We would soon be coming to the Pakistan Stock Exchange (PSX) to mobilise funds," he said, adding the International Finance Corporation and others had indicated their interest in participating in the Fund.

Dar said the strategic deal with the Chinese consortium was a "dream come true" for him. Besides being the best market in Asia and fifth best among global bourses in 2016 on the basis of returns, the PSX had after the divestment graduated to 'regional market', he said.

He expressed the hope that the decision by the Chinese consortium to venture into Pakistan's capital market would bring benefits to both sides.

"Divestment will result in institutional shareholding, experienced ownership and good governance for PSX which will translate into organised and robust development of the exchange," he said.

Chinese Ambassador to Pakistan Sun Weidong said the occasion marked a new step in all-round cooperation between the two countries. "It is a win-win situation for both sides," the ambassador said and added that the partnership would assist in investment financing and generate credit for CPEC.

"It comes at a significant moment when we are pushing forward CPEC to deepen cooperation and sustainable development in China-Pakistan all-weather friendship.
(Reopens FGN 16)

Hu Zhang, chief executive officer of the Chinese Financial Futures Exchange, said the strategic deal was completed after over eight months of negotiations.

"The deal has the blessings of China Regulatory Commission (CRC) as it lays foundation for tomorrow," he said.

He read out a message of the CRC chairman who called the deal a manifestation of deeper relationship and a step for strengthening China-Pak economic relationship.

Securities and Exchange Commission of Pakistan chairman Zafarul Haq Hijazi observed that the partnership with the Chinese consortium would be crucial in bringing the governance and regulatory structure of the exchange on a par with global standards.

"The investors will bring improved governance, state-of-the-art technology, managerial experience, investor base and listing and product development opportunities, thereby increasing visibility and improving marketability of PSX," he hoped.

Others who spoke included State Bank Governor Ashraf Mahmood Wathra, PSX chairman Muneer Kamal, PSX divestment committee chairman Shehzad Chamdia and former PSX chairman Arif Habib


Popular posts from this blog

Rohingya Terrorists want to create Islamic Republic in Northern Rakhine says Myanmar home minister

Israeli Defense Minister: If Pakistan send ground troops into Syria on any pretext, we will destroy this country with a nuclear attack

If sent back forcibly, we’ll be killed says Rohingya Muslims on deportation decision by Govt of INDIA