Pakistan Stock Exchange (PSX) saw an increase in offerings in 2024, with the bourse witnessing 7 Initial Public Offerings (IPOs), including 2 GEM Board offerings, compared to just one IPO in 2023.
According to a report by Topline Securities, the total amount raised from investors through the 7 offerings in 2024 stood at Rs. 8.4 billion, marking the highest level since 2021, when there were 8 offerings that raised a total of Rs. 19.9 billion.
The brokerage house attributed this as a good year for IPOs, driven by macroeconomic stability under the International Monetary Fund (IMF) program, coupled with positive market sentiment, high liquidity, falling interest rates and political stability, which encouraged equity investment.
The benchmark KSE-100 Index surged by 83 percent in rupee terms and 85 percent in dollar terms in 2024 (so far), reflecting overall positive sentiment and renewed investor interest, the report said.
The report noted that t e average daily traded volume has also increased by 69 percent, reaching 545 million shares, while the daily traded value has risen by 108 percent to Rs. 21 billion during 2024 so far.
In 2024, new listings on the Main Board included Secure Logistics (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging (IPAK), Fast Cables (FCL), and BF Biosciences (BFBIO). Meanwhile, Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM) were added to the GEM Board.
The market outperformed the global trend, which saw a slowdown in IPO activity. As per Ernst & Young (E&Y), a total of 870 IPOs were witnessed till 9M2024 raising $78 billion compared to 983 IPOs raising $101 billion in same period last year. This decline reflects the global slowdown in new IPOs, attributed to the transition where factors such as economic deceleration, US presidential elections, geopolitical frictions and regulatory shifts casted a shadow of uncertainty over the investment realm, posing potential challenges to the IPO market.
The brokerage house said it believes that more IPOs will be coming to market in 2025 as market valuations have sizably increased. Furthermore, abundant availability of liquidity amidst conversion from fixed income will also encourage companies to offer shares in market.