Tech firms urged to list on PSX for visibility

IT experts highlight benefits of raising equity, expanding locally and globally through stock market

KARACHI:

Tech companies should get listed on the Pakistan Stock Exchange (PSX) to raise equity for business expansion in domestic and international markets, enhance the market capitalisation of the companies, and increase the visibility of the brands across the country, IT experts and exporters said.

Globally, tech companies are not only listed on different stock exchanges, but these companies are taking the lead with shares that are in high demand for investors, including Microsoft, Meta, Apple, Adobe, Intel, Alibaba, Dell Technologies, and the like.

The IT sector is the fastest-emerging sector in the country, and the PSX is the best-performing equity market in the world, having crossed the 108,000-point mark. Hence, it is high time that local IT companies should make their debut on the stock exchange to attract local and foreign investors, said Pakistan Software Houses Association (P@SHA) former chairman Muhammad Zohaib Khan.

He pointed out that a good number of IT companies with growing exports could announce their Initial Public Offerings (IPOs) whenever their managements decide to transform their company from private limited to public limited.

Pakistani IT companies are making valuable contributions to the exports of the country despite a host of challenges at a local level, but these companies have been performing tremendously in the last few months, he said.

The tech sector of the country encompasses a wide range of areas, including telecommunications, fintech, e-commerce, software development, and digital marketing. According to the Pakistan Software Export Board (PSEB), over 5,000 IT companies are registered in the country.

In 2021, the PSX and the PSEB collaborated to list 40 IT companies on the Growth Enterprise Market (GEM) Board—a platform designed for small and medium enterprises to raise capital. However, only a handful of digital firms have been listed since then.

Currently, out of over 550 listed companies, only 16 IT and telecom firms are included in the all-share index of PSX. The KSE-100 index features just six IT companies, while the KSE-30 index includes only one.

Fahad Sajjad, CEO of the Pakistan Fintech Network, stressed the potential of fintech companies for listing on PSX.

"Fintech operators are already highly regulated by apex bodies, which positions them well for equity market participation. With proper support to mitigate risks during volatile trading, fintech firms could take the lead," he said.

He explained that fintech companies are experiencing significant growth due to their innovative products and services, offering ample opportunities for local and global expansion. With more than 40 fintech entities operating in Pakistan—some with international footprints—listing on PSX could further enhance their growth trajectory.

More than 40 fintech entities are operating in Pakistan, and a couple of these have also expanded their operations in foreign countries.

IT exporter Dr Noman Said has stated that listing on the PSX can strengthen a company's financial credibility by adhering to regulatory compliances.

"A listing not only attracts investors but also enhances a company's reputation in both local and global markets," he said.

He also said the listing of tech companies in an equity market will attract more educated and young investors towards trading in shares. Therefore, it will be a win-win situation for both sides.

He urged the government to create more awareness among IT companies on a regular basis and develop an exclusive desk for the facilitation of IT companies for following the listing process, rules, and regulations.