PSX to sell 160.295mln shares through book building in June

KARACHI: The Pakistan Stock Exchange (PSX) will offer 20 percent of the total paid-up capital of the company, comprising 160.295 million ordinary shares, and the entire offer will be through a book building process at a floor price of Rs28/share.

The MCB Bank Limited has been mandated as the book runner to the offer at a fee of 0.25 percent on total book building amount at the strike price.

According to the draft offer for sale document; initially, 75 percent of the issue size, ie, 120.221 million ordinary shares will be allotted to successful bidders and 25 percent of the issue, ie, 40.074 ordinary shares will be offered to retail investors at the strike price determined through the book building.

The PSX board of directors had already approved the sale of 20 percent stakes in the bourse in June.

Once the strike price is determined all those bidders whose bids have been found successful will be entitled for the allotment of shares.

For the allocation of shares priority will be given to the bids placed at the highest price. The bidders, who have made bids at prices above the strike price, will be issued shares at the strike price and the differential, if any, will be refunded.

The bidders, who have made bids below the strike price, would not qualify for allotment of shares and their margin money will be refunded.

The principal purpose of the offer for sale of shares is self-listing on the Pakistan Stock Exchange in accordance with the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 and the Stock Exchanges (Corporatization, Demutualization and Integration) Regulations, 2012 and to broaden the company’s shareholder base by offering shares to the general public, high net-worth individuals and institutions. In 2015/16, the exchange operations together with the related assets and human resources of the then Lahore Stock Exchange Limited and Islamabad Stock Exchange Limited were integrated into the KSE, which emerged as a single national stock exchange under its present name.

Traditionally, stock exchanges were mostly owned by the respective brokers, but in December 2016, 40 percent equity stake of the PSX, together with the management control, was divested to a consortium, comprising China Financial Futures Exchange Company Limited, Shanghai Stock Exchange, Shenzhen Stock Exchange and two local financial institutions, Pak-China Investment Company Limited and Habib Bank Limited. The divestment of a major stake in the exchange is likely to pave the way for introduction of new products, systems, technology, expertise and investors for development of local capital market.

The Pakistan Stock Exchange is a large unified liquidity pool of securities market in Pakistan. As of March 31, 2017, 560 companies, having listed capital of Rs1.297 trillion ($ 12.5 billion), were listed with the market capitalisation of Rs9.594 trillion ($92.3 billion).

The KSE-100 Index closed at 48,156 points on March 31, 2017, indicating a growth of around 47 percent from January 1, 2016.