Sunday 26 July 2009

Pakistan On Sale

A Column Worth Your Time by Dr Farrukh Saleem. ********

Collective wisdom
Capital suggestion

By Dr Farrukh Saleem

The proof of the pudding is in the eating. Consider this: One, Standard
Chartered Bank, with 1,400 branches in 50 countries employing 60,000
people representing 100 nationalities, has invested a wholesome $413
million to buy 80.86 per cent of Pakistan's Union Bank.

Two, Phillip Morris, the world's largest commercial tobacco company and
the owner of Marlboro the world's most popular tobacco brand, in a deal
valued at $374 million has bought an additional 50 per cent stake in
Lakson Tobacco Company, Pakistan's second largest.

Three, China Mobile Communications Corporation, the world's largest
mobile phone operator with 296 million customers, has bought 88.86 per
cent of Paktel for $284 million.

Remember, that's all in the past, here's what's in the pipeline: One,
Emaar Properties, one of the world's largest real estate companies, has
announced plans of investing a colossal $2.4 billion. There's Crescent
Bay in Karachi (75 acres; 4,000 residential apartments), Sheikh Zayed
Centre in Lahore comprising Hyatt Residency, Grand Hyatt Hotel and a
huge entertainment and shopping complex. Then there's Canyon Views in
Islamabad; 1,500 acres, 9,000 luxury single family town homes and villas.

Two, Temasek Holdings, Singapore government's investment arm and 100 per
cent owned by Singapore's Ministry of Finance, is all set to buy a
majority stake in Pakistan Industrial Credit Investment Corporation in a
deal valued at $300 million (Ho Ching, Temasek's CEO, is Prime Minister
Lee Loong's wife). In 2005, Temasek paid $48.9 million to buy Pakistan's
NIB Bank.Three, PSA International, the world's largest container
transhipment operator that operates 20 port projects in 11 Asian and
European countries with a network of 600 ports and 200 shipping lines in
123 countries, will be investing $550 million for the expansion of
Gwadar's infrastructure.

Four, Barclays Bank PLC, the third largest bank in the UK, is looking at
investing a billion pounds into Pakistan. Rumour has it that Mian
Mohammad Mansha (Sitara-e-Imtiaz) , chairman Nishat Group (assets Rs27,
000 crore), has already refused to sell a stake in MCB.

Five, ABN AMRO the Netherlands- based banking giant with 4,500 branches
and 98,000 employees in 53 countries, has been eying to buy Pakistan's
Prime Commercial Bank (market capitalisation: Rs14, 000 million or $230
million).

Six, HSBC, the largest bank in the world in terms of assets with 284,000
employees, is also looking for an appropriate investment opportunity.

Yes, we lack an institutionalised succession mechanism. It's true that
we have produced a bumper crop of suicide bombers. Yes, the trade
deficit is too high. Cost of capital is on its way up and so is the rate
of inflation. What's also true is that collective wisdom is an awfully
powerful indicator.

Standard Chartered, Philip Morris, China Mobile, Emaar Properties,
Temasek, PSA International, Barclays, ABN AMRO and HSCBC is a diverse
group of independent international investors with different levels of
information and market intelligence. Based on their information and
market intelligence they are all investing in Pakistan.

Global aggregate opinion is optimistic on Pakistan. Investment decisions
taken by Standard Chartered, Philip Morris, China Mobile, Emaar
Properties, Temasek, PSA International, Barclays, ABN AMRO and HSCBC are
saying out loud that Pakistan's economy is heading in the right
direction. Multinational corporate feelings originating in London, New
York, Hong Kong, Dubai, Singapore and Amsterdam are all confident of
Pakistan's economic future. Collective verdict is buoyant on Pakistan.
Collective wisdom is bullish on Pakistan.

The writer is an Islamabad-based freelance columnist. Email:
farrukh15@hotmail. com

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