The Privatisation Commission has put on hold floating of United Bank Limited (UBL) and other entities' global depository receipts (GDRs) before June 30. The government had given go-ahead to the Privatisation Commission to float UBL and some other entities' GDRs before June 30 to raise money from international market to help it narrow down the budget deficit.
The Commission's consultant for banking sector transactions and his team for GDRs was actively engaged in completing the process for a number of GDRs, including UBL, to meet the deadline. However, the political turmoil left hardly any chance for the Privatisation Commission to go ahead with government plan.
Sources said that the Privatisation Commission was of the view that it was not the right time to float any bond, or GDR, as Pakistan's risk stands all-time high due to the on-going political uncertainty. An official of Privatisation Commission told Business Recorder on Friday that decision has been taken, in principle, to wait for some appropriate time to float UBL and other entities' GDRs to get reasonable price.
He said: "The international investors will take all factors into account before investing in any of Pakistan's issues and, by any mean, it is not a good time for UBL, or any other GDR". The government was expecting sizeable investment from its GDRs before June 30 to reduce the budget deficit.
Pakistan's issues are not performing well at London Stock Exchange (LSE). A report recently issued clearly indicated that Oil and Gas Development Company (OGDC) GDR was shedding value at London Stock Exchange. Its reason was none other than political turmoil in Pakistan.
The investors can not trust to invest in a bond or GDR where law and order situation remains volatile for a long time. The government can not go for any GDR or bond unless the political situation in Pakistan improves substantially to give a positive picture to the global investors. The government has set a target of Rs 25.1 billion privatisation proceeds for 2008-09. The Finance Minister had counted privatisation proceeds as a source to generate money from non-traditional resources.