If its too good to be true – then it probably is. Well, who knows it for real? Just weeks ago, two listed companies including a consumer giant, UniLever Pakistan and Wateen Telecom, departed from Karachi Stock Exchange, hoisting concerns from investors’ community.
Why are they leaving the exchange? Is it the worsening security conditions? Stringent listing regulations? or something else? Market was brimming with rumors with every side to share their own story assisted by supporting theories.
Recent announcement made by Securities and Exchange Commission of Pakistan (SECP), apex corporate regulator, might relax these rumors. While addressing the ‘Pakistan IPO Summit-2013′, Imtiaz Haider, Commissioner Securities Market Division, said that SECP has been reviewing the listing regulations of the stock exchanges to make the listing process more efficient and less cumbersome.
Real Question is – How much Less Clumsy?
Imtiaz admitted that despite consistent efforts and technological development the number of new listings in Pakistan is not encouraging – as during the last three years only 13 IPOs have been witnessed in stock exchange. (Just so you know, almost 78 companies left the stock exchange).
To this end, he said, all the key players associated with the IPO market need to collectively enhance their efforts to address the situation and encourage the companies to tap the capital market for meeting their financial needs through IPOs. He was of the view that the purpose of the summit will be best served if it
would successfully highlight the benefits of listing in stock exchanges.
Imtiaz informed the audience at Summit that the SECP has introduced a number of changes in its regulatory framework to make the process of listing more accessible and efficient including the introduction of book building process, publication of the Listing Guide Book, the launch of e-IPO and establishment of separate IPO Portal on the official website of the SECP with all the relevant data, information, laws, guidelines and checklists.
Another Good News (Hint: its tax related)
Imtiaz Haider revealed that on the recommendation of the SECP, the government has announced a five-years tax holiday for all those new projects and balancing , modernization, replacement & expansion projects, where such projects are financed entirely through equity.
The stock market is one of few sources that may facilitate the corporates to avail this incentive, he added.
He also revealed to the audience that SECP has proposed the Ministry of Finance and the Federal Board of Revenue (FBR) to reduce the rate of income tax for the companies that are listed on stock exchanges.
Small & Me