KARACHI: The outgoing calendar year witnessed just one initial public offering (IPO) on the Pakistan Stock Exchange (PSX) that helped the company’s sponsors raise a meagre sum of Rs435 million.

“This is the lowest amount raised in a year in the past decade and a half,” said a research report compiled by Topline Securities Ltd.

The previous record low was Rs800m raised in 2013.

In terms of the number of IPOs, the PSX witnessed a single listing after 2019. This was in sharp contrast to the preceding five- and 10-year average of four IPOs a year.

“We attribute this bad IPO trend to macroeconomic instability, coupled with the looming threat of default, cheap valuations and political uncertainty discouraging equity investment,” it said in the report released on Wednesday.

The single IPO that the PSX saw in 2023 was of Symmetry Group Ltd. This was Pakistan’s first publicly listed digital technology company with a focus on digitalisation of consumer-centric functions of organisations. The company offered 101.24m shares at a strike price of Rs4.30 per share, raising Rs435m in August with an oversubscription of 1.58 times.

Globally, a similar trend was witnessed as IPOs dried up in many markets. As per global consulting firm E&Y, a total of 968 IPOs were witnessed in the first nine months of 2023 raising $101 billion compared to 1,018 IPOs generating $148bn a year ago. The firm attributed the decline in IPO activity to rising macro challenges, tighter liquidity and a higher cost of capital.

Meanwhile, the KSE-100 index went up by only 3pc in rupee terms in the first half of 2023. It went down 19pc in dollar terms with an average daily traded volume of 163m shares and an average daily traded value of Rs6bn.

However, in the second half of 2023 to date, the benchmark index witnessed a sharp recovery. It’s up 51pc in rupee terms and 52pc in dollar terms with an average daily traded volume and value improving to 377m shares and Rs12bn.

Published in Dawn, December 7th, 2023