Generally, such companies are welcomed by capital markets and maintain investor's confidence. For the last couple of years, the SECP has assumed a more vigilant role and has also forced PSX to play its due role in promoting quality listings. To promote ease of doing business, the SECP has also expedited its approval processing time and as a matter of fact, the SECP approved the last three IPO applications within five working days after receipt of complete applications.
Being the front line regulator, PSX has the prime responsibility to promote quality listing considering the interest of all the stakeholders including general public and the issuers. In order to strengthen its prospectus approval process, the PSX has recently constituted a listing committee comprising of independent market participants, professionals with business background and members of its management. After its constitution, the said PSX committee has approved first prospectus for listing of a company, which is one of those companies which participated in the interactive session organised jointly by PSX and the SECP.
It is imperative to encourage new quality listings to complement a sustainable growth being registered by our capital markets and to maintain investors' confidence. Public offering process starts with the decision of the sponsors of the company to offer securities to the general public. In this connection, Pakistan Stock Exchange (PSX) and the Securities and Exchange Commission of Pakistan (SECP) jointly held various interactive sessions in different cities with the selected group of sponsors having high potential for listing.
These sessions provided a unique opportunity to sponsors to interact with different segments of capital market service providers, including PSX, regulator, brokerage firms, sponsors of recently listed companies etc, and to explain the pathways to a successful listing.
In past, quality aspect with regard to listings has never been focused up on rather reliance has been placed on enhanced disclosures and eligibility requirements. The same approach of "Buyer Beware" still could have been followed, however contrary to this, the Commission has constituted an in-house cross functional IPO Committee to ensure quality listing and improve decision making process in respect of listing applications.
The said committee, comprising head of different functions of the SECP is responsible to examine listing applications in details and furnish recommendations to the SECP for its consideration.
Since the constitution of this committee, three IPOs applications and one sukuk application have been received by the SECP, which were thoroughly examined to ensure their suitability for general public. One of three IPOs applications, not being considered suitable for the general public was allowed by the SECP to be traded only among the sophisticated investors by placing trading lot size restriction of 100,000 shares. Out of other two IPO applications, one has received overwhelming response from institutional investors as well as general public and its price in the secondary market has increased almost 50% as compared to its initial offered price.
During the week, another IPO has also been approved by the SECP considering the recommendation of committee which is going to be offered to the public in next couple of weeks. This IPO committee concept has been implemented by the regulator to ensure quality listings. In addition to said IPOs, the SECP has also approved a sukuk application for listing.-PR