KARACHI - The expected acquisition of MCB Bank's shares by Malayan Banking Berhad (Maybank) may add $217 million to the country's deteriorating balance of payments and foreign exchange reserves. The likely sale transaction of the said bank's 5 per cent further stake which is due for completion in the coming month as part of the share purchase agreement signed between Maybank and sponsors of MCB in May 2008, could provide a minimum inflow of US$217 million to the financial and capital account surplus, said research analyst. If the deal is executed at the capped amount of Rs 510 per share, the financial account would rise to $226mn while, if the stake is sold at Rs 490 per share, the transaction could provide the financial account with a minimum of $ 217mn, financial analyst of JS Research Farhan Rizvi said, adding that as the economy is going through a difficult phase due to surging import bill on account of soaring food and oil prices, it is anticipated that this acquisition would support government in stabilizing Pak rupee.           It is important to mention here that for the last few weeks the foreign exchange reserves have been dropping below 11 billion dollars. By July 19 the total liquid foreign reserves held by the country stood at $10.728.4 million, according to the break-up of the foreign reserves position issued by SBP.     Worth noting is that the probable acquisition deal of MCB Bank and the entering of Barclays Bank into the country were seeing as a major development in the local financial sector. The UK-based Barclays bank transferred 100 million dollars to Pakistan to fulfil the requirement of maintaining minimum paid-up capital limit before launching its operations in Pakistan. Similarly 670 million dollars had also been received from Maybank of Malaysia in June 2008, against the purchase of 15 per cent stake in the MCB bank. The soft launching of the bank had been taken place after declaring "Barclays Bank Plc." as a scheduled Bank by the SBP with effect from July 23, 2008. The bank is supposed to start its operations in Karachi in August 2008. Talking about the put option on shares' sales analyst also said, as per the agreement, some of the sponsors were granted a put option to sell further MCB shares (in addition to 15% already sold) up to a maximum of 5% (31.4mn shares) within one year from the date of completion (Sell Right Period) of the sale of original 15% stake. Since Maybank has already paid the US$670mn for acquisition of 15% stake to the sponsors in June 2008, the put option is exercisable at an exercise price of Rs490 plus holding cost capped at Rs510. In addition to the put option available to Individual Sellers, a call option has also been granted by the individual sellers to Maybank. This option is in the money if the sponsors sell less than 2.5% of outstanding MCB shares to Maybank during the Sell Right Period and allows Maybank to increase its holding upto a maximum of 20%. According to the terms of this option, Maybank can only exercise its right within 5 business days in a single transaction upon conclusion of the Sell Right Period at the same strike price as the put option, he added. Moreover minimum profit rate on saving is also expected to hit future profitability of MCB hence earnings are expected  to grow at 4-year (2009-12) earnings CAGR of 8% with an average ROE of 22%. The stock currently trades 2008E and 2009F PE of 9.8x and 9.5x, and a PBV of 2.5x & 2.3x, respectively.