Lalpir Power: Market depth to digest OFS looks strong

We expect favorable investor appetite for upcoming listing of Lalpir Power where a high payout policy translating into prospective D/Y of 18-20% (at the floor price) barring a dip in 2014E, should be the key selling point.

From a total offer of 37.9mn shares, 28.5mn shares are targeted to HNWI’s via book building process and the remainder (9.5mn shares) for public subscription.

Key investment considerations show fuel losses (10-12gms/kWh) as the prime irritant, even as the company aims to mitigate these through efficiency upgrade projects. Cumulatively these measures are expected to allow Lalpir to save ~4.7gms/kWh and push thermal efficiency to ~37.5% by 2015E.

Sensitivities suggest 4-6% EPS upside from incremental 1% deval in PkR/US$ parity while exposure to inter-corporate debt is nominally negative for earnings. 

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Via: KASB Securities and Economics Research   

State Bank announces payment of 6pc R&D

KARACHI: The State Bank of Pakistan has announced procedure for payment of 6 per cent Research and Development (R&D) support on export of processed food.
 
The SBP issued a circular inviting attention of authorised dealers to Trade Development Authority of Pakistan’s (TDAP) public notice on the subject of 6 per cent R&D support for export of processed foods.
The federal government has allowed 6pc R&D support on exports of processed food subject to observance of certain terms and conditions.

‘Claims so received may be forwarded to the TDAP for further necessary action at their end,’ said the SBP circular.