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Karachi: National Bank of Pakistan, the country's biggest lender by assets, and Oil & Gas Development Co., the biggest fuels explorer, plan to buy back shares to raise confidence in a market that's lost a third of its value this year.
The Karachi Stock Exchange and "the government together are convincing companies to buy back shares," Board Member Dawood Jan Mohammad said by telephone from Karachi on Wednesday. "It will help the market gain confidence, especially since the buybacks are from big companies."
The board of Oil & Gas Development will meet today to approve the share buyback plan, the Islamabad-based company said on Wednesday in a release to the stock exchange. National Bank will meet tomorrow to approve its buyback programme, the company said in a separate release.
Pakistan yesterday extended an August curb on equity trading as concern grows that an end to the limit may cause the benchmark KSE 100 Index to drop again.
The board of the exchange will meet again on September 25 to decide when to end the freeze that prevents stocks from falling below their August 27 closing price.
"The buyback will be mutually beneficial both for investors, who will get an exit opportunity, and for companies, which will reduce their liabilities," said Imran Khan, head of research at First Capital Equities Ltd. in Karachi.
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