Market capitalisation grows 111%, but listings down 5%

The number of listed companies has gone down by 5% in the last three years, the latest annual report of the Karachi Stock Exchange (KSE) shows. As many as 30 companies have unlisted since 2012 when stocks of 590 entities were traded on the largest stock exchange of Pakistan. Their number clocked up at 560 at the end of 2014-15, just three notches above the number of listed companies at the end of 2013-14. Although market capitalisation has gone up by a massive 111% over the last three years, total capital listed on the stock exchange has grown by just 11.1% during the same period.

However, privately held companies seem to have become more interested in going public of late. The last fiscal year saw nine new listings on the KSE as opposed to five, four and four listings in the preceding three fiscal years, respectively. The listed capital of new companies also surged notably along with nine new listings. New companies listed capital of Rs38.1 billion in 2014-15, which was almost twice the capital listed on the bourse during the preceding fiscal year.

However, financial accounts of the exchange show it doubled its advertising and marketing expenses to Rs16.5 million in 2014-15 in order to create awareness about the KSE, which could lead to higher liquidity and more listings in the future. Companies that were listed in 2014-15 included Colony Textile Mills, Engro Powergen Qadirpur, Saif Power, Sindh Modaraba, Systems Limited, Synthetic Products Enterprises, Mughal Iron & Steel Industries, Ghani Global Glass and Dolmen City REIT.

New listings raised funds amounting to Rs11 billion as opposed to equity generation of Rs4.7 billion in the preceding year….EXPRESS TRIBUNE

 

 

KSE world’s best performing frontier stock market

Pakistani equities have delivered 26 percent a year for US dollar investors since 2009, making Karachi the best-performing frontier stock exchange in the world, the Khaleej Times reported. The paper said Pakistan has been in a macroeconomic sweet spot since early 2014 with numerous economic indicators in the green.The State Bank of Pakistan (SBP)’s hard currency reserves had risen to $17 billion and the rupee actually appreciated against the US dollar in 2014, unlike the yen, baht, ringgit, rupiah, won and Indian rupee….Further, Islamabad signed its structural adjustment programme with the IMF and obtained $6.7 billion in funding from the ADB, the World Bank and its Bretton Woods twin.Pakistan managed to sell $2 billion in Eurobonds and $1 billion in sukuk in the international capital markets.

The $1.2 billion privatisation IPO of Habib Bank was hugely oversubscribed. GDP growth is four percent, inflation has fallen from 10 percent two years to one percent now, the paper added.It further said that the oil price crash was a windfall for Pakistan’s balance of payment, with the current account deficit a mere minus-one percent of GDP. The fiscal deficit has fallen from eight to five percent, admittedly with cash transfers from state-owned banks and international donors.The paper said that China’s President Xi Jinping has promised a $46 billion economic corridor to Beijing’s strategic ally in South Asia.

The paper believed Pakistani equities will continue their fairy-tale bull run in 2015 for three reasons.

The paper said that the SBP has been in an aggressive rate cutting mode since last November, including a one percent rate cut to seven percent. The 300 basis-point interest rate cuts by the SBP contrasts with India’s 50 basis-point rate cuts by RBI Governor Rajan. Pakistani interest rates are now at 42-year lows, to levels last seen  in 1973. This period also coincides with the launch of the Pakistan country index fund – symbol PAK – in New York after its Morgan Stanley predecessor PKF was delisted after the Kargil war and post-nuclear test US sanctions in 1998-99….. EXPRESS TRIBUNE

 

KSE among the top performers in 2013

The Karachi Stock Exchange (KSE) remained the 10th best stock market in 2013 with its benchmark index posting an annual return of 49.4%, translating into a 37% return in dollar terms, according to global financial news service Bloomberg. This is the second consecutive year when the Karachi stock market has been one of the world’s best-performing markets by posting a phenomenal return. The KSE-100 Index rose 48.9% in 2012 in rupee terms while the increase was 37% in dollar terms. The best-performing stock market in 2013 in dollar terms was Venezuela, which posted a return of 296%. It was followed by Dubai (108%), Abu Dhabi (63%), Bulgaria (48%), Ghana (44%), Nigeria (44%), Kenya (43%), Argentina (42%) and Ireland (39%).

“Pakistan’s 2013 return of 49% compares favourably with the last 10 years and 20 years (of) average annual return of 28% and 22% respectively.” Pakistan’s equity market in 2013 remained prominent in different indices managed by MSCI, which provides the global benchmark indices for equity investments. For example, MSCI Pakistan gained 38% in 2013, which is higher than the 21% gain that MSCI Frontier Markets (MSCI-FM) posted in the same year. Moreover, in Asian frontier markets, Pakistan ranked first, outpacing Sri Lanka, Vietnam and Bangladesh by a significantly vast margin, …..Higher foreign inflows played a significant role in making KSE one of the best-performing markets in the world. Foreign investors holding 36% free-float in the market and constituting 8% of KSE’s market capitalisation remained net buyers in 2013. “During the period, foreigners bought $2 billion and sold $1.6 billion (worth of equities), resulting in a net inflow of $403 million. It represents significant growth from last year’s net buying of $125 million,” ……In sheer percentage terms, the KSE-100 Index return was second only to Japan, according to Elixir Securities research analyst Fareesa Baig. Besides the first ever completion of a five-year term by a democratically elected government, she said Pakistan’s re-entry into the IMF programme and the European Union’s award of the GSP Plus status were some of the key positives of 2013. The outgoing year saw an annual improvement of 29% to 223 million shares a day while the value traded depicted an increase of 64%,…. EXPRESS TRIBUNE

KSE TAKES A LEAP FORWARD, MAY LIST AT BSE SENSEX

The Karachi and Bombay stock exchanges are in advanced stage of talks for cross-listing of indices on each other’s bourses, disclosed KSE Managing Director Nadeem Naqvi on Wednesday.“KSE wants to list its 30-index on BSE. We are also in talks with the Dubai Financial Market and Abu Dhabi Securities Market for cross-listing of indices,” said Naqvi, while speaking at a press conference at the bourse.He pointed out that Pakistan’s bourses have always been looking at western markets for investments, but circumstances have changed with the emergence of India and China as big emerging market players.On the local front, he said,  the KSE-30 index will be listed on the Lahore Stock Exchange (LSE) soon after getting approval from the regulator – the Securities and Exchange Commission of Pakistan (SECP).

Naqvi also announced that the KSE has appointed AKD Securities as market maker for the KSE-30 stock index futures with the hope that activity in futures contracts will support and stabilize the market. However, he made it clear, “one should not expect that this step will trigger any immediate response. I believe this will create activity in the next six to eight months like the slow initial progress of leading Indian stock markets when they introduced futures contracts more than a decade ago.” Today, the same unknown futures contracts in Indian bourses are eight times the spot trading there, he said.“KSE also intends to introduce an auction programme, which will be a game changer for the bourse,” said Naqvi. AKD Securities has committed to execute a minimum of 100 contracts daily, increasing these up to 500 a day within six months…..EXPRESS TRIBUNE