Pakistan hopes for privatisation forex boost

Karachi: Pakistan is hoping a sell-off of government stakes in state-owned energy companies, banks and troubled airline PIA will bring a much-needed boost to foreign exchange reserves, a top official said on Friday. Prime Minister Nawaz Sharif`s privatisation programme cleared an important hurdle this week with the approval of financial advisers for the sale of shares in more than half a dozen state-owned companies. Pakistan last month received a second payment under a USD 6.7 billion International Monetary Fund (IMF) loan package, conditions for which included action to privatise state-owned businesses. Among the offerings will be shares in the Oil and Gas Development Company Limited (OGDCL), Pakistan`s top hydrocarbon exploration and development concern. OGDCL shares have been traded on the London stock exchange since 2006 and the government now wants to sell off more of its stake in the company. "We will wait the financial advisers to make the privatisation strategy but I personally want to offload 10 percent... Of OGDC at the global capital market," Mohammad Zubair, the chief of the Privatisation Commission, told AFP. The state holds about 75 per cent shares in the OGDCL, after already offloading a 25 per cent stake. Arif Habib Securities, a Karachi-based brokerage and financial research company, estimates the OGDCL sell-off will raise about USD 1 billion. Pakistan`s forex reserves have dwindled in the past year, sinking to just USD 3.2 billion, barely enough to cover the country`s foreign payments for a month. Opposition parties have condemned the privatisation plans, accusing Sharif of cronyism and selling off valuable national assets at cut price. But Zubair insisted the scheme was necessary. "We will get two-pronged benefits: one is to revive our presence in the global market by holding roadshows and then offloading the shares, and on the other will have much needed foreign exchange," Zubair said. Besides OGDCL, the government intended to sell 20 percent shares of Habib Bank Limited, the largest Pakistani bank, in local and international markets. "Likewise we intend to sell 10 per cent of HBL in global market and 10 per cent at the local stock exchange," Zubair said.