Details

Case

Educator Copy

Wapda Bearer Bonds (A)

Salman Shah, Bashir A Khan


INDUSTRY : Financial Instruments

AREA : Finance

ORGANIZATION : WAPDA

LENGTH : 29

LUMS No : 02-163-88-1

PUBLICATION YEAR : 1988

DESCRIPTION

KEYWORDS:

Wapda,Finance,Bearer Bonds,General Manager,Trading,Organization,Power,Electricity,Issues


DESCRIPTION:

The General Manager Finance (Power) of WAPDA wondered whether the Authority could repeat the WAPDA Bearer Bond issue in the next financial year. Even though the issue had been oversubscribed by over 1 billion rupees, in the initial period of the tap only Rs 800 million had been raised, so some form of re-evaluation was obviously called for. The GM was also concerned about the underdeveloped nature of secondary markets in Pakistan; although the Bonds had been listed and quoted on two major stock exchanges there had been little trading activity in them. The initial trading activity had resulted in a substantially discounted bid price, creating serious organizational image problems for future trading and future issues.


LEARNING OBJECTIVES:

The students will analyze the issues of raising funds and how to structure a financial instrument (Bond) to tap theses funds. Furthermore, they will study the interrelatipnship between the Government of Pakistan and public institutions who wish to enter the financial markets. This relationship will also highlight the role of Government of Pakistan in regulating financial activity.


SUBJECTS COVERED:

Finance