First Capital Equities to organise road show in New York

By Kazim Alam, The Express Tribune

KARACHI: First Capital Equities will hold the ‘largest-ever’ investment road show organised by a Pakistan-based brokerage house in New York City on June 3-4, company Head of Research Faraz Farooq told The Express Tribune on Saturday.

First Capital Equities is part of the First Capital Group, which was founded by slain Punjab governor Salmaan Taseer. It company hold the road show in collaboration with US-based Auerbach Grayson, a global investment house that claims to cover approximately 80% of major American mutual and pension funds.

Already in its fifth year, the conference aims to provide North American fund managers a platform to network with the top management of Pakistan’s blue-chip companies, according to Farooq. CEOs, CFOs and senior managers of eight blue-chip companies listed on the Karachi Stock Exchange (KSE) will accompany First Capital Equities to the two-day investment conference. These companies are DG Khan Cement, Engro Corporation, Engro Foods, Fatima Fertilizers, MCB Bank, Nishat Mills, Oil and Gas Development Company (OGDC) and Pakistan Petroleum (PPL).

As many as 50 investors have signed up for meetings. “It is going to be the largest investment road show held by a Pakistani brokerage house because of two reasons: one, the number of meetings planned for the two-day event is 200, which is unprecedented. Secondly, the participation of two state-owned energy companies with significant market capitalisation will make the investment conference unique,” Farooq said, adding that the requirement of acquiring a no-objection certificate from the relevant ministry makes the participation of SOEs in foreign conferences difficult. All companies will pay for their expenses out of their own pockets.

In addition to the eight companies mentioned above, Kot Addu Power Company (Kapco), Pakistan State Oil (PSO) and Lucky Cement had also confirmed their participation in the conference. But PSO officials could not secure a NOC and the CFO of Lucky Cement was refused a US visa. The CEO of Kapco decided not to go at the last minute because of personal reasons, Farooq said.

The investment conference is all the more important after recent reports suggested that the government plans to reduce its share in state-owned energy companies to around 51%, in a bid to raise cash needed for clearing the circular debt. The government owns 71% of PPL, while it has a 74.9% stake in OGDC.

“The conference is of particular importance for SOEs because they won’t have to introduce themselves to global investors in case they decide to issue global depository receipts (GDR). Foreign shareholding creates liquidity in their stocks, increases their credibility and leads to better corporate governance,” Farooq said.

“With their 27% share in KSE’s float-adjusted market capitalisation, offshore investors have become the key driving force in the Pakistan market. This conference will help US investors recognise the strong potential for growth and high returns on investment, which Pakistani equities offer,” Farooq Habib, chief operating officer at First Capital Equities, told The Express Tribune. “Previous conferences triggered a buying spree across Pakistani equities, as strong inflows were witnessed after the event,” he added. “Despite year-to-date outperformance, Pakistan still trades at 30% discount to both MSCI (Emerging Market) and MSCI (Frontier Market) funds, leaving room for upside.”

Published in The Express Tribune, June 2, 2013.

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