Pakistan is considering a plan to allow direct listing of local firms

Pakistan is considering a plan to allow direct listing of local firms


(Bloomberg) - Pakistan's market regulators are considering a proposal to allow local companies to be listed directly on the stock exchange, a way that is easier than meeting the rules required for initial public offerings.


The Securities and Exchange Commission of Pakistan (SEC) is discussing the plan, said Aamir Khan, chairman of the regulator, in an interview at his office in Islamabad on April 13. If the proposal is approved, it will help companies, especially state-owned companies, to sell existing shares as they will not need the approval of the regulator for the transaction in most cases.


"Direct listing is a concept that already exists in developed markets," Khan said. "It's on our internal drawing board right now."


Just like other global markets, companies in the South Asian country are pushing for strong investor sentiment. Capital markets are booming. The 45% rise in Pakistan's benchmark KSE 100 index over the past year has encouraged new lists in this regard.


The regulator has allowed a number of new products and changes over the past few years, including market halt, exchange traded funds, and stock market investor boarding on digital. It has also introduced a regulatory sandbox that allows startups to operate in areas that are not regulated.


Pakistan's SEC is now working to facilitate real estate investment trusts. The requirement for a mandatory certificate to complete the building, which many investors see as a hurdle, has been eliminated, Khan said. Pakistan has not seen any REITs since its first visit in 2015. Tax increases have stabilized about eight REITs.


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