HBL sponsor to buy additional Rs3.5bn shares

The Aga Khan Fund for Economic Development (AKFED), which is the overseas sponsor of Habib Bank Ltd, is going to use its accumulated dividends worth Rs3.5 billion to buy additional shares of the country’s largest lender from the stock market, a regulatory filing said on Tuesday. The announcement is first of its kind by any corporate entity with overseas sponsors given that the laws governing the repatriation of dividends didn’t allow it until recently. Pakistan is facing a dollar shortage, which has led the authorities to impose official and semi-official restrictions on the outflow of foreign exchange. As a result, multinationals haven’t been able to repatriate their profits in the form of dividends to their overseas headquarters. Pending repatriations amount to roughly $1.5bn, according to Amir Paracha, president of the Overseas Investors Chamber of Commerce and Industry (OICCI). Both inflation and the rupee’s depreciation against the dollar are eating into the accumulated — but yet to be repatriated — dividends of multinationals. These companies couldn’t reinvest their dividends even into a profit-generating bank account — let alone in the stock market — and repatriate the same along with additional returns.