A Chinese consortium is set to acquire a 40 percent stake in Pakistan’s main bourse, the country’s stock exchange said on Thursday.
At least 17 entities had expressed an interest in the Pakistan Stock Exchange (PSX), whose benchmark stock index was one of the best performing indices worldwide in 2016. The deal is estimated to be worth about $84 million, according to an official who requested anonymity.
The PSX is currently owned by more than 300 Pakistani brokers.
“The bid submitted by Chinese Consortium @ Rs. 28 per share emerged as the highest and acceptable under the relevant regulations,” the PSX said in a statement.
The consortium comprises three Chinese exchanges—China Financial Futures Exchange Company Limited, the Shanghai Stock Exchange, the Shenzhen Stock Exchange and two local financial institutions—Pak-China Investment Company Limited and Habib Bank Limited.
“The Divestment Committee will now issue the Letter of Acceptance to the above Consortium, subject to formal approval of Securities and Exchange Commission of Pakistan (SECP),” the statement added.
Following the sale, the company plans to offer 20 percent of its shares to the public, officials say. Under its stock exchange reforms, Pakistan merged its three stock exchanges—the Karachi Stock Exchange, the Lahore Stock Exchange and the Islamabad Stock Exchange—to form the PSX in January this year. The benchmark KSE index of 100 shares was at the level of 46,699 points on Thursday, compared with 32,816 points on Jan. 1.
Confidence in Pakistan is growing, with the International Monetary Fund claiming in October that the country has emerged from crisis and stabilized its economy after completing a bailout program. Its credit rating has improved, while there are encouraging signs of foreign investment, such as a massive Chinese infrastructure project officials routinely call a “game-changer.”