Pakistan stays upbeat on UAE's investment pledge

dubai - UAE has already pumped around $6 billion into the country

The UAE's announcement to enhance its investments in Pakistan will help attract global FDI and accelerate economic growth in the Asian country.

This comes at a time when the government is trying to fast-track economic growth before the 2018 national parliamentary elections. This boost was facilitated by Shaikh Nahyan bin Mubarak Al Nahyan, the UAE Minister of Culture and Knowledge Development, during his visit to the Pakistan Stock Exchange (PSX) in Karachi last month.

"We will continue to explore ways of strengthening our investment and business relations with Pakistan," he said, adding that the UAE has already invested around $6 billion into the country.

"Pakistan is the UAE's strategic partner and its government and workers have participated in the development of the UAE and its institutions. We are indebted to this country and we have been investing here in good and bad times. The UAE will invest more in Pakistan," Shaikh Nahyan said.

Among the seven GCC countries, the UAE is the biggest investor in Pakistan. From 2004 to 2010, its public and private sector investments totalled $3.74 billion. Several key companies such as Emirates National Oil Company, International Petroleum Investment Company, etisalat, Al Ghurair, Abraaj Capital, Dana Gas, Emirates Investment Group, Emaar, DP World, Julfar, Arabian Packaging Company and others have invested in Pakistan.

CPEC investment
"Abu Dhabi's investments in pubic, private and joint venture projects are growing," said Ishaq Dar, Pakistan's finance minister. "We wish to have more of it. We want them to join in financing the $51 billion China-Pakistan Economic Corridor," he added.

Dar explained: "Vast UAE foreign direct investment and joint ventures have been operating successfully in Pakistan for years. A large number of high-dividend FDI investment and joint venture opportunities exist in Pakistan. These include sectors such as infrastructure development and expansion, power generation and distribution networks, water resource development and desalination, farm-based industries, fresh fruit production for export and export in packaged form to destinations such as the UAE and Saudi Arabia."

Shaikh Nahyan's comments have generated enthusiasm in the financial sector and among investors in Pakistan.

Muneer Kamal, chairman of PSX, said: "The UAE and Pakistan will be able to chart out new avenues of cooperation and joint ventures. I am glad that the UAE believes in Pakistan's economic growth and potential. We will also strive to offer high dividends to investors from Abu Dhabi and other GCC countries, as already shown by the PSX."

"Liquidity continues to be surprising and may push KS-100 well above 47,000 points," said analyst Faisal Bilwani at Elixir Securities.

Nadeem Naqvi, managing director of PSX, said: "The PSX is the best-performing stock market in Asia with its benchmark KSE-100 share index delivering more than 40 per cent gains since January 2016 till December 19, 2016. The country is quickly reclaiming its share of foreign investment."

The New York-based MSCI Emerging Markets Index has upgraded and reclassified the PSX. "It is a manifestation of global investors' confidence in Pakistan," Naqvi said.

The PSX is undertaking disinvestment of 60 per cent of its shares. Under this plan, three stock exchanges - Karachi, Lahore and Islamabad - have been integrated into one - the PSX. The bourse expects nearly $136 million by divesting 60 per cent of its shares. It has sold 40 per cent shares to investors and the remaining 20 per cent will be offered as free float through a public offering.

How many of the divested shares will be picked up by Abu Dhabi? Let's wait and watch.

The writer is based in Islamabad. Views expressed are his own and do not reflect the newspaper's policy.

• Pakistan