Fresh Look & Record Breaking IPO at PSX
Sep 13, 2021
On Market Front
TRACKING KSE-100
This week KSE100 index gained 241 points to close at 47,198 points. The market remained volatile this week due to the political situation in Afghanistan and Pakistan being re-classified as a frontier market.
MINOR PLAYER TO A BIG BOY
Since the inclusion of Pakistan in the MSCI Emerging Index, Pakistan failed to attract foreign investors because of the small share in the major index. This week, MSCI has downgraded Pakistan from Emerging Index (Bigger Size) to Frontier Index (Smaller Size), where Pakistan was a heavyweight. This move will likely improve the volume, returns, and foreign portfolio investment in the coming weeks.
WHO’S ENTERING?
Octopus Digital, a subsidiary of Avanceon Limited (-0.77%), marked Pakistan’s IPO history by fully subscribing within the first 30 minutes of the 2-day book building. The IPO was oversubscribed by 27x times. This shows the investors’ confidence in the PSX market and as well as in the tech sector.
UNDER THE SPOTLIGHT
Competition Commission of Pakistan (CCP) has initiated an investigation on HASCOL (+0.28%) for creating fake financial reports for the acquisition of Vitol Dubai. HASCOL purchased petroleum products from Vitol at high prices and sold them in the market for a cheaper rate to gain market share and dominance. For this, HASCOL borrowed money from the banks and caused the loss of PKR 98 billion, the largest ever fraud in Pakistan’s history. Hascol is also under civil as well as criminal investigation for defrauding investors and borrowers.
WHAT’S BREWING IN THE AUTO SECTOR?
Pak Suzuki Motor Company (+0.51%) will be discontinuing its 2nd Generation Swift variant in Pakistan almost 12 years after its launch, while bookings for the Cultus have also been temporarily suspended. Rumors are that Indus Motor Company (-0.04%) that assembles Toyota cars in Pakistan plans to launch a Special Edition of the variant of the Toyota Corolla X 1.6.
On Economic Front
SECTOR ON SPOTLIGHT
The cement sector posted a healthy growth of 22.77% in August 2021. The total cement despatches during the month were recorded at 4.34mn tons against 3.53mn tons during the same month of last year.
BUILDERS ON THE RADAR
In the effort to remove Pakistan from the gray list of FATF, the Financial Monitoring Unit of the government will work with FBR to continue inspections of developers and builders to ensure their compliance with the requirements of the Financial Action Task Force (FATF).
SAVE OUR SHIP, OMCs TO GOVERNMENT
Facing serious financial crisis! The Oil Marketing Companies (OMCs) have requested the government to help address the issues of OMCs, which operate on regulated margins of less than three percent of the sales price. OMCs have been facing financial crises mainly owing to exchange loss, less margin, and heavy inventory loss due to COVID-19.
SURPLUS OR DEFICIT?
The country’s trade deficit almost increased by 120% in the first two months of this financial year. The deficit is driven by higher import bills because of increased global commodity prices, including oil & gas. The dollar strengthened because local investors took refuge in the greenback haven ahead of a deadline to encash prize bonds worth PKR40,000 this month.
TWEET OF THE WEEK
