Financial Analysis and Event Study of PTCL : Pre and Post Privatization

Abstract

Pakistan Telecommunication Limited (PTCL) is one of the most important telecom industries of Pakistan that is playing a huge part in the monetary advancement of the nation and gives employment to many individuals. The proprietorship structure (Private or Public) has solid effect on firm money related performance. Pakistan Telecommunication Limited (PTCL) was privatized in 2005. This examination study explores the effect of privatization event on the organization's monetary performance and the performance of its stock .The study also explores literature on the privatization, financial performance and also explained the relationship of (pre & post) privatization event and financial performance. .A numbers of performance pointers are utilized to gauge the profitability, productivity, capital venture, yield, work and leverages. The paired sample t test for mean difference has been utilized for contrasting the pre and post privatization event performance. The study finds that financial and operational performance of the PTCL is affected negatively due to the privatization. The average share prices and number of trades were significantly affected though the effect is positive sometimes. The net profit margin, return on equity and earnings per share ratios shows decreasing trend in post privatization years. No notable or persuading confirmation is discovered which propose critical change in monetary and accounting performance pointers of privatization event on PTCL. At the end we also provide the recommendation and suggested area for future research.