ISLAMABAD: The commodities futures contracts of the commodity market including gold, crude oil, and US equity indices, worth Rs3.867 trillion were traded at Pakistan Mercantile Exchange Limited (PMEX) during 2021-22.
The data of the Securities and Exchange Commission of Pakistan (SECP) released for 2021-22 revealed that overall, the fiscal year 2021-22 was a challenging year for markets. The KSE-100 Index began the year at 47,356.02 points and ended at 41,540.83 points on June 30, 2022, recording a decrease of almost 12.3 percent.
The market recorded its highest level of 48,112.21 on August 23, 2021, and touched its lowest level, 40,879.93 on June 13, 2022. The index posted its highest single-day gain of 1,700.38 points on April 11, 2022. The average daily turnover was 292.69 million shares and 117.78 million shares in the ready and futures markets, respectively.
A total of 530 companies with accumulated paid-up capital of Rs1,525.899 billion are listed on the Pakistan Stock Exchange, while the total market capitalization is Rs6,956.507 billion, as on June 30, 2022. Foreign investment in the stock market exhibited a net outflow of $297 million during the year, which is 23 per cent lower than the net outflows of $387 million observed in FY2020-21.
During the period July 01, 2021 to June 30, 2022, various commodities futures contracts including gold, crude oil and US equity indices, worth Rs3.867 trillion were traded at PMEX. Previously, for the period of 2020-2021, commodities futures contracts worth Rs2.841 trillion were traded, depicting an increase of almost 36.11 per cent.
Primary capital markets offer immense potential for business growth and development by providing opportunities to raise capital, both in form of equity and debt, at competitive prices. After high levels of global IPO activity in 2021, volatile market conditions have resulted in a slowdown during the first quarter of 2022.
The sudden reversal can be attributed to a range of issues, both emerging and residual. These include the rise in geopolitical tensions [Ukraine war]; stock market volatility; price correction in over-valued stocks from recent IPOs; growing concerns about a rise in the commodity and energy prices; impact of inflation and potential interest rate hikes; as well as the Covid-19 pandemic risk continuing to hold back a full global economic recovery.
Pakistan being an emerging economy has huge potential for companies to go public. The SECP is striving to implement reforms that encourage companies to enlist on the stock market. During FY-2021-22, the Pakistani market witnessed six IPOs, ie, three on Mainboard and three on GEM Board of PSX. All these IPOs were oversubscribed, showing investor confidence in the capital market, the SECP report added.
Copyright Business Recorder, 2022
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