Pakistan seeks foreign investment as PM Shehbaz addresses London Stock Exchange

LONDON: Prime Minister Shehbaz Sharif on Tuesday highlighted Pakistan’s return to international capital markets and urged global investors to explore opportunities in the country, saying recent economic reforms had strengthened key macroeconomic indicators.

Speaking at the London Stock Exchange’s market-opening ceremony, Shehbaz said that Pakistan had worked hard in recent years to strengthen its economy and cited the country’s recent $3 billion dual-tranche Eurobond as evidence of progress.

“It is a very proud moment for all of us and an opportunity to rebuild Pakistan’s connection with the London Stock Exchange,” Shehbaz said.

Pakistan raised $3 billion through the Eurobond issue earlier this month, its largest-ever single international bond transaction. The issue comprised $1.75 billion in a 5½-year bond carrying a 7.5% coupon and $1.25 billion in a 10-year bond carrying a 7.9 per cent coupon.

The transaction attracted nearly $6 billion in orders from institutional investors across global markets.

Shehbaz said that the bond issue reflected the government’s efforts to introduce structural reforms, digitise the economy and take measures aimed at putting the economy “back on the rails”.

He credited Finance Minister Muhammad Aurangzeb, other economic ministers, secretaries and government officials with helping improve the country’s economic position.

“Our macroeconomic indicators are very promising and augur very well for the future,” Shehbaz said.

The prime minister also referred to the Gulf crisis, saying Pakistan would have progressed more rapidly had the crisis not erupted.

“If this Gulf crisis hadn’t erupted, we would have really taken off,” he said, adding that Pakistan, like other emerging economies, was dealing with the resulting challenges.

Pakistan is also seeking to play a role as a peacemaker and mediator between the United States and Iran, Shehbaz said, expressing hope that efforts would lead to a safer situation.

The prime minister said the changed global environment had created a need for investors to reassess markets on the basis of safety and security, arguing that Pakistan could offer opportunities for foreign investment.

“Pakistan is a market where we can easily attract foreign investments,” he said, describing such investment as potentially profitable and mutually beneficial.

Shehbaz said that the government wanted to work more closely with the London Stock Exchange and international financial institutions to expand Pakistan’s access to global capital markets beyond sovereign borrowing.

He said Pakistan was interested not only in raising debt but also in attracting direct investment into the country.

“We would certainly like to seek your guidance and advice how to further seek international financial markets to have a role in Pakistan, not in terms of only sovereign debts but investments,” he said.

The prime minister also pointed to the government’s privatisation programme as an area where international investors could participate.

He said Pakistan had begun transferring state-owned enterprises towards private-sector management and referred to the recent privatisation of Pakistan International Airlines and First Women Bank.

The government was now moving towards offloading several other state-owned enterprises that, in his view, should be operated by the private sector.

Shehbaz said that Pakistan could work closely with international financial institutions on the process and attract investment into the companies being privatised.

The government has been seeking to diversify Pakistan’s sources of external financing after several years of heavy reliance on bilateral and multilateral lenders.

The recent $3 billion Eurobond followed a $750 million three-year Eurobond issued in April, when Pakistan returned to international bond markets after a four-year gap.

The Finance Ministry has said the latest transaction forms part of a broader strategy to diversify financing sources, extend maturities and reduce refinancing and rollover risks. It also followed successive sovereign credit-rating improvements and renewed access to international capital markets.

Shehbaz said that Pakistan’s economic reforms, including digitisation and structural changes, were intended to create a stronger foundation for future growth.

He also said Pakistan needed to learn lessons from the current regional crisis and strengthen its ability to attract investment by providing markets that international investors considered safe.

The prime minister also invited London Stock Exchange Group Chief Executive David Schwimmer to visit Pakistan, saying Schwimmer was familiar with the country and could renew his “good old memories” of his younger days there.

Shehbaz asked Pakistan’s High Commissioner in London to extend a formal invitation to Schwimmer and said he hoped the visit could lead to closer engagement between Pakistan and international financial markets.

The London ceremony was held at the London Stock Exchange’s headquarters at Paternoster Square, where Schwimmer and senior officials received the prime minister.