New | Shanghai Stock Exchange eyes stake in Pakistan’s main bourse

The Shanghai Stock Exchange (SSE) has emerged as a bidder for an up to 40 per cent stake in Pakistan’s main stock exchange, a deal which could reflect the first major overseas investment by a Chinese stock exchange.

An official with the Pakistan Stock Exchange (PSX) told the Post via phone on Monday that the Shanghai bourse was among one of the potential buyers in formal talks with the state-owned exchange. But he would not confirm details relating to the size of the investment under discussion or whether there were limits on the amount of foreign investment into the nation’s main equity trading platform.

In a report published on Sunday, the Nikkei Asian Review quoted Ayyaz Afzal, a director at the National Clearing Company of Pakistan, a unit under the PSX, as saying that Shanghai had submitted a letter of intent to purchase up to a 40 per cent stake.

Pakistani officials have invited interested parties to submit bids by October 21 and the winner is expected to be selected by early November, according to a Reuters report on Monday which cited National Clearing Company of Pakistan managing director Nadeem Naqvi.

Pakistan is the No 1 performing market in Asia this year with the benchmark KSE 100 Index soaring almost 24 per cent in the first nine months. Vietnam and Indonesia followed with returns of 18 per cent and 16.8 per cent, respectively.

Meanwhile, China’s benchmark Shanghai Composite Index is down more than 15 per cent for the period.

In June, global index provider MSCI upgraded Pakistan to emerging market status. China was rebuffed by the MSCI during its annual review, which cited market accessibility as a factor in coming to its decision. China has sought inclusion in the MSCI three times.