Over the weekend, Deputy Prime Minister and supposedly the financial czar of PMLN, said that UAE is acquiring some share of Fauji Foundationin lieu of USD1 billion deposits with SBP and convert it into equity. The general perception markets are having is that Fauji Foundation is mainly off-loading chunk of shareholding from its key listed companies to UAE – mainly Fauji Fertilizer Company (FFC) and Mari Energies (Mari). That is incorrect and misplaced. Fauji Foundation holds 40 percent of Mari and 45 percent of FFC, and selling close to half its holding would significantly dilute its shareholding and may lose its control. Sources close to these companies reveal that the deal is not like what the general impression from Dar’s statement. And one may wonder in what capacity a government official is talking on behalf of a non-government group. Anyhow, the deal is in the making where UAE is committing to invest USD1 billion in Fauji Foundation. No new money to come into the country. Rather existing deposits of USD1 billion with SBP to be converted into investment in Fauji Foundation. There would be no change in SBP’s gross reserves. Debt and liabilities to reduce by USD1 billion and FDI to increase by USD1 billion. SBP will create PKR counterparts of around Rs280 billion and transfer it to Fauji Foundation where a new fund (or trust) to be made in equal partnership with Fauji Foundation. UAE’s fund’s share to be in cash (USD1 bn) while Fauji Foundation to put its share equal to USD1 billion of its companies (at an agreed price). The grapevine is that these shares may include FFC, Askari bank, Fauji Cement and others (but not Mari).The plan perhaps is that new fund to invest mostly in new projects (likely to be in agriculture, energy and mining) This USD1 billion could be the biggest foreign investment in many years. It would be a welcome move. Geopolitically, Pakistan’s love with UAE is increasing while enthusiasm of billions of dollars investments from Saudi’s is waning (now). However, there is no coherent strategy of the government. First UAE bought a small bank with insignificant investment. It got control of seaport through buying container terminal – however, no foreign investment is coming, as the terminal is seeking financing from local banks. Thus, only control, no foreign investment. Then the deal of Islamabad Airport is fizzling away. And now investment in FF trust. There is no structure. We are desperate to fetch money no matter how it comes. Anyhow, whatever the way it is, USD1 billion investment in the country will be jubilated.