KSE sees 10 IPOs in its worst year: The News

KARACHI: The outgoing year will be the worst year for the local stock markets. With only five trading sessions remaining, the benchmark KSE-100 index is down 51 per cent (61 per cent in US dollars).This is its worst performance since the introduction of the index in 1991 when Pakistan’s market was opened to foreigners as part of financial sector liberalisation.However, despite a record fall in equity values and slowdown in overall economy, the Karachi market saw 10 Initial Public Offerings (IPOs) in 2008 compared with nine in 2007. Interestingly, nine out of 10 offerings in 2008 were made before the imposition of price floor.

Unlike 2007, which saw nine IPOs worth Rs15.5 billion (including greenshoe option), the calendar year 2008 witnessed 10 IPOs worth Rs7.4 billion (including greenshoe option). A total of Rs17.4bn was received from investors in 2008 (excluding Media Times Ltd) against these offerings, resulting in a value-wise over-subscription of 2.4 times.In 2007, total amount subscribed was Rs27.2 billion, recording over-subscription by 1.8 times. However, the smaller size in terms of the value of IPOs compared to the previous year could be linked to non-appearance of government offerings in 2008.

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