The highest offer received from Etisalat for the Pakistan Telecommunication Company Limited (PTCL) is a booster for the country's privatisation programme and one of the greatest achievements in the history of Pakistan, opening up doors for overseas investors in coming state-run companies sell-off, analysts and traders commented. Alfalah Securities chief executive Shoaib Memon said $1.96 per share bid received for PTCL is clear indication by the UAE investors that they have faith in the country's economy and government policies.
The UAE company has a stranglehold in this region. The company' shares are trading at 60 times higher than face value in their capital market. They have strong muscles to put more money in the PTCL.
"The investment from them would pave way for other companies to enter Pakistan, assuring good returns for local shareholders." The investment is not only good for the capital market but for the country too, he added.
Mars Securities director Iqbal Jan Mohammad said the privatisation would open new vistas for the country, and finally the long battle, started a decade ago to sell stakes in the PTCL, has ended.
It is positive for the country and "we are very happy and believe that other companies on the privatisation list would fetch similar response from overseas investors," he said.
The profile of the country would improve and foreign investment in other sectors would get a boost. Moreover, Jan Mohammad said the government's assurance to use 10 percent of the bid amount for poverty alleviation and education would be a stepping stone for improving living standards of the people.
Already, the government has allocated significant amounts for education and development plans; and has targeted privatisation of more state-run companies this fiscal year, and if these divestments would fetch healthy bids, they would help accelerate the government's plan to reduce poverty.
Tariq Hussain Khan, research analyst at Atlas Investment Bank, said the price received by the privatisation commission is above expectation of most of the market players.
Singtel is disappointed, as their offer was quite low. But in my opinion they offered the low bid because of resistance from the union before the sell-off.
However, investment from Etisalat is a good omen and would create a positive impact on future transactions of the government.
Sajid Bhanji, an equity dealer at the Arif Habib Securities, said it is a landmark transaction and an assurance that the present government is committed to the privatisation programme. A feather in the cap of privatisation commission.
"It would enhance country's image internationally and would attract more foreign direct investment," he said.
Etisalat, being a cash-rich company, could further invest in the PTCL and would have positive impact on the capital market, clearing way for the PSO, PPL, OGDC, etc, sell-off, he said.
Khalid Iqbal Siddiqui, head of research at Invest Capital Securities, said the government has received a good price and the middle eastern investor is likely to bring in new expertise and technology. "It is a landmark in Pakistan's history," he said.
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