TRG Pakistan ponders AIM listing

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KARACHI: TRG Pakistan Limited, the first listed IT-enabled services company in Pakistan, has expressed intention to get one of its subsidiaries called DG Services listed at AIM Market of the London Stock Exchange, said the company’s document. “The board of directors of TRG Pakistan Ltd, in their meeting held on December 19, 2012, decided to evaluate admission to London Stock Exchange’s AIM Market by way of placing, for one of its subsidiaries DG Services,” said Syed Muhammad Talib Raza, secretary of TRG Pakistan, in a notice to the Karachi Stock Exchange (KSE). The notification resulted into making TRG Pakistan the most traded share at the KSE on Thursday. The company was turnover leader with 35.26 million shares. Its share closed at Rs5.03 with one-day maximum allowed increase of Rs1.

The secretary said that DG Services is a leading provider of outsourced online customer acquisition solutions for large, consumer-facing corporations. “It has generated significant profitable growth within its US customer base by using high-quality and reliable offshore service agents and now plans to expand its market coverage into Europe and South America.” he said. “The directors believe that the proposed listing will provide the company with this growth opportunity.”

If the company decides to proceed with the listing, an application will be made to the London Stock Exchange for ordinary shares of the subsidiary, to be admitted for trading on AIM. “It is expected that admission will become effective and dealings in ordinary shares will commence by the first quarter of 2013,” he said.

Khurram Schehzad, SVP head of research at Arif Habib Limited, said that DG Services has seen a year-on-year growth of 134 percent in revenue to Rs1.85 billion in the year ended June 2012. “The company’s margin increased to 19.6 percent in the year ended June 2012 from 11.2 percent last year,” he said. “The listing of the company on AIM Market, however, will not make a great impact on the basic earnings of TRG Pakistan.”

He added that TRG was managing a number of subsidiaries world across. As per the company website, TRG Pakistan operates in five continents.
Zeeshan Afzal, an analyst at Topline Securities, said that AIM Market was a market that enlisted those companies from world across which had small market capitalisation.

“Rules and regulations of AIM Market are not as tight as for markets listing blue-chips,” he said.

The listing, if it happens, would leave a positive impact on TRG Pakistan one way or the other. Moreover, the development will also prove to be a trendsetter in Pakistan for sectoral and non-sectoral companies.

Analysts said that this could be a unique story of listing equity from Pakistan on an internationally renowned capital market. Earlier, companies from Pakistan listed global depository receipts on the London Stock Exchange, but not equities.

They said that most of its subsidiaries and TRG Pakistan itself were loss making companies because the company itself acquires loss-making companies, transforms them into profit-making entities by use of its expertise and then sells them (subsidiaries) at a good price.


Courtesy: The News



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