KARACHI, Oct 19: Eleven out of 16 new companies that offered shares to the public for subscription during the year 2005 (up to Sept 30) were over-subscribed, yet the pace of new offerings at the stock exchanges is, all but slow.

The reluctance of companies to enter the capital market, although chances of their offer being over-subscribed are tilted heavily in favour, appears to be due to the reasons of taxation, availability of easier and low interest rate bank credit, small shareholders’ nuisance at most annual general meetings and to avoid the hassle of complying with stringent corporate governance regulations. That is not to say that the regulations of issuing quarterly accounts and disclosure of material information and others have done no good; those are the steps that surely have made affairs of companies a good deal more transparent.

But while the currently listed first and second tier stocks are now almost fully priced, there is dire need for new attractive offers. The Regulators — both the frontline and the apex — must put their heads together to suggest and perhaps persuade the government to provide incentives and remove hurdles that prevent some of the very well-known blue chip unlisted giants on the corporate sector, who still prefer to keep all equity within the family or overseas parent companies and some of the local directors. Let the public share the fruit of their successes.

Granted that compared to just 13 new listings in the three years between 2001 to 2003, 17 companies sought listings in 2004 and 16 in 2005, but given the phenomenal rise in stock prices, which has seen KSE-100 index rise from 1,273 at the end of 2001 to 8,227 at Sept 30, one would have expected a bee-line of companies for mobilization of capital through the stock exchanges.

During 2005, the 16 new companies had added Rs28 billion to the KSE listed capital. Three new companies that offered part of their equity through the Privatization Commission included Pakistan Petroleum Limited (PPL); Kot Addu Power Company (Kapco) and the United Bank Limited (UBL).

Other companies that entered the capital market during 2005 were: Pakistan Strategic Allocation Fund; First National Equities; AMZ Ventures; Atlas Fund of Funds; Network Microfinance Bank; Meezan Balanced Fund; International House Finance; Jahangir Siddiqui Capital Markets; Attock Petroleum; First Dawood Mutual Fund; Dewan Farooque Spinning Mills; Eye Television Network; Zephyr Textiles; Chenab Limited; NetSol Technologies and WorldCall Telecom. Allied Bank Limited also got to be quietly listed without public offering due to its merger with the already listed Ibrahim Leasing Limited.

The latest stock market daily quotations note: AKD Index Tracker Fund under “provisionally listed companies”; D.S Industries under “companies in process of formal listings”; Al-Falah GHP Value Fund (open end) and Siddiqsons Tin Plate under “companies approved for subscription” and Faysal Income & Growth Fund (open end) marked as companies that have “applied for listing”.