The three stock exchanges of Karachi, Lahore and Islamabad will formally merge today (Monday) to become the Pakistan Stock Exchange (PSX).
The Securities and Exchange Commission of Pakistan (SECP) and the Karachi Stock Exchange (KSE) will organise a grand launch on January 11 in the federal capital marking the integration of the three exchanges into a single bourse. High-ranking government officials, foreign dignitaries, international fund managers and high-net worth individuals are expected to attend the ceremony.
Under the merger plan, operations of the Islamabad and Lahore stock exchanges will be integrated into the KSE, which will be renamed Pakistan Stock Exchange Limited.
“This integration will complete the second phase of the Stock Exchanges Demutualization and Integration Act 2012, passed by a joint session of the parliament,” the KSE has said in a statement.
According to observers, the integration of three exchanges into the PSX could pave the way for more foreign investment in the financial sector.
“The merger will help in selling the exchange to a strategic buyer as part of the demutualisation plan,” said Topline Securities Chief Mohammad Sohail.
Under the plan the PSX would become a listed company on the exchange with 40 per cent of its shares offered to foreign buyers — 20 per cent in an initial public offering (IPO) and the remaining 40 per cent allocated to listed brokers.
According to officials, foreign investors could already trade on the existing exchanges, but the new bourse would be better organised with greater international links.
With the completion of the process, the capital market will enter into a new era of growth and development as it will encourage wider participation of all classes of investors, the officials said.
KSE, the country’s bench mark stock exchange, was set up in 1947 with only five listed companies and a market capitalisation of only Rs 37 million. KSE now has 572 companies listed with total value of Rs 6,958 billion.