Daily Times

ISLAMABAD: The stock exchanges of Karachi, Lahore and Islamabad will formally merge today (Monday) to become Pakistan Stock Exchange (PSE).

The Securities and Exchange Commission of Pakistan and the Karachi Stock Exchange (KSE) will organize a grand launch on January 11 in the Federal Capital marking the integration of 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 as the Pakistan Stock Exchange Limited.

“This integration will complete the second phase of the Stock Exchanges Demutualisation and Integration Act 2012, passed by a joint session of 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 investors interest. “The merger will help in selling the exchange to a strategic buyer as part of the demutualisation plan,” said Mohammad Sohail, chief of Topline Securities, Karachi. Under the plan the PSX would become a listed company on the exchange with 40 percent of its shares offered to foreign buyers — 20 percent in an initial public offering (IPO) and the remaining 40 percent allocated to listed brokers.

Foreign investors could already trade on the existing exchanges, but the new bourse would be better organized with greater international links, the economists said. With 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. It may be added that the KSE, the country’s bench mark stock exchange, was set up in 1947 with only five listed companies and a market capitalization of just Rs 37 million. It now has 572 companies listed with the total value of Rs 6,958 billion.