Business

Daewoo Express: Pakistan’s First Bus Service to Register at PSX This May

When a Swedish asset manager company, Tundra Fonder saw the opportunity to invest, it didn’t waste a second and immediately bought a 9.4% stake in Pakistan’s famous Daewoo Express.

Daewoo Express is now the third Pakistani company to receive a direct investment from the Stockholm-based fund. The other two companies operating on the same fund are TPL Properties and IBL Holding.

This transaction was carried out by the pre-IPO (Initial Public Offering) method. In this method, an unlisted company that is pending a listing on a stock exchange is bought by the fund.

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Daewoo Express is taking one step further as the company will be listed on Pakistan’s Stock Exchange (PSX) in April or May. This will financially help the organization and cater to the additional financial requirements of the company.

Portfolio manager at Tundra Fonder, Shamoon Tariq said:

“We feel there is a huge scope in Pakistan’s transportation sector which remains largely untapped. As Pakistan’s economy improves and disposable income increases, travelling is bound to increase and Daewoo should be able to capitalize on it”

Productivity

He also said that the company’s net earnings are expected to increase by 20% as it plans to increase its productivity. The dispatch of the Multan Metro Service which incorporates 35 new buses giving transportation to an expected 95,000 citizens every day in the primary stage, and other inner city services after the completion of Pakistan’s underdeveloped highways and roads, will serve as temporary boosters for the company’s economy.

“Tundra invested in Daewoo in September last year and the main reason of investment was that Daewoo needed cash for financing buses for the Multan metro project”

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A senior ESG analyst at Tundra Fonder, Maryam Mughal said that in the future, buses will become more modern and equipped with the latest technologies. As a result, the people of Pakistan will surely prefer these new and organized buses for transport. She further added:

“There is a lack of organized, safe transportation in Pakistan. As the consumption capability of its citizens increases, Tundra believes Pakistanis will increasingly choose more organized transports, as in other more developed countries. Removing the safety concerns will also expand the potential traveller base to include children and women travelling alone”

Daewoo Express is expected to be listed on Pakistan’s Stock Exchange in the first half of 2017.

Role of CPEC

The China-Pakistan Economic Corridor (CPEC) is estimated to generate $55 billion in advances and interests in the two main sectors of the country. The two main sectors are the energy and the transport sector. This billion dollar project has caught the eyes of thousands of investors and not only Chinese but businessmen from all over the world are trying to grab the opportunity to invest in Pakistan through the CPEC. Every small and big startup is looking to invest in order to expand their business.

Source: Express Tribune

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