Analysis of Economic Survey of Pakistan FY2021 showed that Pakistan Stock Exchange’s (PSX) performance has been remarkable this year. During July 2020 to April 2021 period, the benchmark KSE-100 index enhanced from 34,889.41 points to 44262.35 points. During this time, the Index ended at its highest point of 46,933.63 on February 3, 2021, before the third wave of COVID-19 dragged it down. As of April 30, 2021, number of listed companies reached at 532, with total market capitalization of Rs 7,718 billion. The turnover in shares reached its peak in January 2021, showing that investors were actively investing in PSX.
| Month-Wise Performance Of KSE-100 Index | |||||||
|---|---|---|---|---|---|---|---|
| Months | 2019 – 2020 | Months | 2020 – 2021 | ||||
| KSE 100 index | Market Capitalization (Rs billion) | Turnover in shares (billions) | KSE 100 index | Market Capitalization (Rs billion) | Turnover in shares (billions) | ||
| Jul-19 | 31,938.48 | 6,384.30 | 1.76 | Jul-20 | 39,258.44 | 7,294.27 | 3.68 |
| Aug-19 | 29,672.12 | 6,082.04 | 2.03 | Aug-20 | 39,868.55 | 7,418.38 | 3.94 |
| Sep-19 | 32,078.85 | 6,406.55 | 2.18 | Sep-20 | 40,571.48 | 7,643.09 | 4.73 |
| Oct-19 | 34,203.68 | 6,690.04 | 4.37 | Oct-20 | 39,888.00 | 7,399.62 | 5.41 |
| Nov-19 | 39,287.65 | 7,511.97 | 6.40 | Nov-20 | 40,807.09 | 7,519.25 | 3.97 |
| Dec-19 | 40,735.08 | 7,811.81 | 6.45 | Dec-20 | 43,755.38 | 8,035.36 | 5.78 |
| Jan-20 | 41,630.93 | 7,851.16 | 5.68 | Jan-21 | 46,385.54 | 8,398.45 | 8.40 |
| Feb-20 | 37,983.62 | 7,094.67 | 2.91 | Feb-21 | 45,865.02 | 8,207.14 | 4.79 |
| Mar-20 | 29,231.63 | 5,620.94 | 4.71 | Mar-21 | 44,587.85 | 7,892.19 | 4.43 |
| Apr-20 | 34,111.64 | 6,376.72 | 4.60 | Apr-21 | 45,048.57 | 7,885.74 | 4.73 |
| May-20 | 33,931.23 | 6,484.96 | 2.33 | ||||
| Jun-20 | 34,421.92 | 6,529.70 | 2.23 | ||||
The Exchange activity slowed down after February 2021 as the third wave of this pandemic intensified. The distinguishing feature of this year is the important number of IPOs that took place. It implies that firms are confident about business prospects. PSX has made significant strides in its history, having a small presence of 5 listed companies initially with a total paid-up capital of Rs 37 million.
| Pakistan Stock Exchange | |||||
|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 (Till 8th April 2021) | |
| Total No. of Listed Companies | 559 | 546 | 534 | 531 | 532 |
| Total Listed Capital – Rs in billion | 1,276.80 | 1,322.74 | 1,386.59 | 1,421.09 | 1,434.74 |
| Total Market Capitalization – Rs in billion | 8,570.92 | 7,692.78 | 7,811.81 | 8,035.36 | 7,865.93 |
| New Companies Listed during the year | 7 | 3 | 1 | 3 | 1 |
| Average Daily Shares Volume – (Shares in Mn) (YTD) | 249.19 | 194.03 | 163.98 | 323.51 | 553.76 |
| Total Volume Traded – (Rs in Mn) (YTD) | 73783.90 | 62323.05 | 57645.40 | 108425.65 | – |
| Source: Pakistan Stock Exchange | |||||
In 1960 there were 81 companies with a market capitalization of Rs 1.8 billion whereas now there are 546 companies listed in the bourse with a market capitalization of Rs 7.692 trillion. The PSX was established on 11 January 2016 after the merger of the Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange.
No doubt, PSX aspires to be one of the leading Exchanges of the world having an enviable record of being the best performing Stock Exchange in Asia. In recent past PSX had an All Index Growth of 26 percent Annual CAGR from 2012-2017. PSX aims to reclaim that status and has plans in place to make it a robust and efficient Stock Exchange at par or above par with other Stock Exchanges in the world. It is at the forefront of Pakistan’s economy, being the only major institution assisting capital formation in Pakistan. PSX has in place functional and operational capabilities at par with any global Stock Exchange with robust trading systems (e.g.: KATS-Karachi Automated Trading System, KITS-Internet based order routing system, BATS-Bonds Automated Trading System), IT security systems, and a progressive regulatory framework. Analysis also showed that the average daily shares volume has been higher this year as against to the last year, suggesting that more buyers and sellers are there in PSX which makes it is easier and faster to execute a trade. In the end of May 2021, PSX witnessed an all-time high daily trading volume with 2.21 billion shares traded in a single session. During July-March FY2021, the market capitalization of the PSX grew by 20.9 percent.
Demand for stocks of Technology & Communication (T&C) sector spurred in the ongoing pandemic. Work from home model accelerated the digital revolution. In addition, the listing of TPL Trakker also grew the market capitalization T&C. Prime minister’s construction package has clearly increased demand for Engineering and Cement sectors. Furthermore, the share price of Lucky Cement has jumped by 70 percent since 1st July 2020. The Engineering sector witnessed an IPO this year of Agha Steel Industries that may have contributed to its growth. Out of five major firms in the PSX, only Lucky Cement price has registered an optimistic growth. Decline in share price of Pak Tobacco partly shows the negative growth in the Tobacco industry. Share prices of OGDCL and PPL have dropped as Oil & Gas Exploration firms recorded a modest 1.8 percent growth.
Initial public offerings in fy2021
Despite the COVID-19 outbreak, statistics showed that the Pakistan Stock Exchange witnessed five IPOs during July-March FY2021 period. In year 2020 alone, four IPOs took place, which is the highest number in the last 5-year. Investor’s appetite was so strong that most of these issues were oversubscribed. In 2020, first IPO was The Organic Meat Company (TOMCL), the leading exporter of halal meat from Pakistan. The Company was listed on PSX on August 3rd 2020. The Company offered 40 million shares at a strike price of Rs 20/share to increase Rs 800 million. The second IPO of the year was TPL Trakker (TPLT), it raised Rs 802 million through offering 66.82 million shares at a price of Rs 12/share.
The largest IPO of the year 2020 was of the Rebar manufacturer Agha Steel Industries (AGHA), offered 120 million shares at a strike price of Rs 32/share, raising Rs 3.8 billion. The fourth IPO of the year was Engro Polymer & Chemicals Limited, which conducted the Initial Public Offering of its preference shares on December 17th & 18th, 2020. Engro planned to raise Rs 375 million through offering Rs 37.5 million preference shares at the face value of Rs 10/- per share. The successful IPO of Panther Tyres Limited (PTL) resulted in the fifth listing on the Stock Exchange for FY2021. The Issue of Panther Tyres Ltd. consisted of 40 million ordinary shares with a strike price of Rs 65.8 per share to raise Rs 2.6 billion.