Commentary on December 2006 Stock Crash

In the past two years we have seen some tremendous highs and lows in the stock market. Yet again we witness a major decline in the index. It all started in mid-December 2006, the causes being:

• Oil and Gas Development Corporation (OGDC) listing and undervalued sale of Global Deposit Receipts (GDRs);
• Selling in the banking sector due to acquisitions, and;
• Primarily, suspension of Callmate (CTTL) shares’ trading and the six times its pad up capital stuck in the continuous finance (CFS) and Badla market.

NIB Bank buys PICIC in $300m deal

In what is being seen as a major move in the banking sector, the NIB Bank Limited informed the KSE that it had reached an agreement in principle with certain shareholders of PICIC DFI for the acquisition of their respective shareholding in this entity.

In a deal that analysts put at $300 million, it is proposed that NIB Bank will merge with PICIC DFI and its subsidiary, the PICIC Commercial Bank Ltd, making it the largest non privatised private sector bank in Pakistan – with a balance sheet of about Rs150 billion.

CFS Eligible Scrips

1. ACBL
2. BAFL
3. BOP
4. DGKC
5. DSFL
6. ENGRO
7. FABL
8. FCCL
9. FFBL
10. FFC
11. HUBC
12. KAPCO
13. KESC
14. LUCK
15. MCB
16. MLCF
17. NBP
18. NML
19. OGDC
20. PIAA
21. PICB
22. PICIC
23. POL
24. PPL
25. PPTA
26. PSO
27. PTC
28. SNGP
29. SSGC
30. TELE
31. AICL
32. CTTL
33. BOSI
34. NCL
35. ANL
36. PCCL
37. JOVC
38. DCL
39. TRG
40. WTL
41. SNBL
42. KOHC
43. PRCBL
44. STPL
45. SPCB
46. JSIB
47. NETRSOL
48. CHBL
49. Attock Refinery
50. Attock cement
51. AHSL
52. INDU
53. ICI
54. PRL
55. Cherat cement
56. Packages
57. PSMC
58. ABL
59. FNEL
60. Pak Electron
61. Bank Al habib
62. Millat Tractor
63. Pakistan Cable
64. KSE
65. BOC
66. THALL
67. SECURITY PAPER
68. APL
69. Ferzoz sons

Foreigners hover near fast-growth local banks

Foreign banks are beating a path to Pakistan’s financial sector, attracted by reforms that have laid the platform for rapid growth and rising incomes.

Asia-focused Standard Chartered earlier this month completed the $487 million purchase of a 95.37 per cent stake in Union Bank Ltd – the biggest buy yet by a foreign bank in Pakistan.

Singapore’s Temasek Holdings, Dutch ABN Amro and HSBC are among other foreigners eyeing possibilities in Pakistan, according to bankers here.

Khawaja Iqbal Hassan, President and Chief Executive of NIB Bank (NDLC-IFIC Bank) – majority owned by Temasek – confirmed his intention to acquire a bank, but did not give specific details.

ABN AMRO to acquire PICIC Group

Pakistan Industrial Credit and Investment Corporation (PICIC) is preparing for a complete sell-out and ABN Amro has shown interest in the group.

The current wave of foreign investments in the financial sector of Pakistan could take a new turn if the PICIC like institutions are sold to an international bank.

“We have information that ABN Amro has shown interest and initiated a dialogue with the PICIC officials,” said a highly-placed banking source.

However, no official confirmation was available from both the entities involved in the initial talks for a possible deal.