Pakistan bourse says it is in share sale talks with Qatar, Istanbul exchanges

A Qatar official confirmed the talks but downplayed the interest, while Turkish bourse officials did not respond to a request for comment.

Pakistan has been enacting financial sector reforms to attract more foreign investment and boost the economy, which is growing at the fastest pace in eight years thanks to improved security across the country and low global oil prices.

In recent years the main Pakistan bourses were demutualized to weaken the influence of stockbrokers and deepen the investor base. Last week the 100-share benchmark index hit an all-time high on anticipation MSCI will reclassify Pakistan from its Frontier Market segment into the Emerging Markets category.

Haroon Askari, deputy director of the newly combined Pakistan Stock Exchange, said that as part of the market demutualization the bourse needs to find a strategic investor to buy a stake of between 15 to 40 percent.

“We have had very serious interest from Istanbul Stock Exchange (and) Qatar Stock Exchange,” Askari told Reuters in Karachi, Pakistan’s commercial capital of about 20 million people.

Askari said there have been two meetings with Borsa Istanbul officials in Istanbul, and then a “high level” Turkish delegation visited Pakistan. There was also a meeting with the chief executive of Qatar’s bourse in the Middle East and then another Qatari representative visited Karachi.

Qatar Stock Exchange chief executive Rashid al-Mansoori said the talks were still in infancy.

“They did visit us and discuss the matter but we did not discuss any stake or near future investment,” al-Mansoori told Reuters. 

“We are focused now on further developing our cash market and introducing more products and tools for our local and international investors,” he added. 

Askari said KPMG is currently evaluating the worth of the exchange, which has about 500 listed companies with market capitalization worth about $73 billion.

Askari said the strategic investor would have to buy at least a 15 percent stake in the company but not any higher than 40 percent. If the sale is for less than 40 percent, then the remaining stake would be sold to other institutions.

Local and international banks have expressed interest in taking 5 percent stakes, as well as private equity funds from abroad, Askari said. “We have no doubt we will be able to sell all 40 percent very quickly,” he added.