Monday, October 28 2024

PSX sees higher listings, 7 companies raise Rs8bn
Contrary to last year’s gloomy conditions, the booming equity market attracted many initial public offerings (IPOs) and companies raised over Rs8 billion in calendar 2024. Market experts said such a favourable situation emerged after 2021, making it attractive for investors while the Pakistan Stock Exchange set records daily, encouraging companies to tap into the equity market. A total of seven listings have been completed in 2024 so far. Of these, five IPOs were on the main board and two (initial offerings) on the Growth Enterprise Market (GEM) board, which is a separate PSX counter reserved for smaller and riskier companies, said a research report by Arif Habib Ltd.
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Unlocking true prosperity
Adam Smith, in his 1776 masterpiece, ‘An Inquiry into the Nature and Causes of the Wealth of Nations’, observed that for a nation to prosper, little else is required than to provide individuals with economic freedom. If economic freedom is provided, the rest of the requisites will be brought upon by the natural course of things. On the other hand, for decades, democracy has also been accepted as the ultimate political system capable of bringing prosperity to a nation. Many have assumed that democratic governance leads to economic success because of its promise of free and fair elections, equal representation and civil and political liberties. However, democracy cannot guarantee economic progress in the absence of economic freedom, which is characterised by the ability of individuals to make their own economic decisions, own property and participate in the voluntary exchange of goods and services. This is not to say that we should not strive for a democratic political system, but when it comes to economic development and prosperity, economic freedom plays a far more critical role than democracy.
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Forging a new economic order
International politics has always been a ruthless and dangerous business, and it is likely to stay that way, according to Chicago University’s US scholar John J. Mearsheimer. In the introduction of an updated edition of his book, ‘The Tragedy of Great Power Politics’, he writes: “Since no state is likely to achieve global hegemony, the world is condemned to a perpetual great power competition. “There are no status quo powers in the international system save for the occasional hegemon that wants to maintain its dominant position over potential rivals.” He notes that the desire of a state for more power does not go away. The ultimate aim is to be a hegemon — that is the only great power in the system.’ In the above backdrop, one can see the global financial, political and economic order in a state of chaos and flux.
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Grid-based battery energy storage solutions
The rise in demand for electric vehicles (EVs) worldwide, driven by governments’ rebates to curb carbon emissions, has spurred advancements in battery technology. Significant research funding has gone into the EV battery to achieve the objectives of a high number of charge cycles, distance, and low weight and volume, with Chinese companies, CATL and BYD are leading the way. These developments and the economies of scale have resulted in a constant decline in the cost of storage batteries. Lately, falling international prices of raw materials have pushed the small battery manufacturers out, leaving a few major players, mainly from China. Once dominant, Nickel Manganese Cadmium batteries are being replaced by Lithium Iron Phosphate technology, which now holds nearly half the market share. Benefiting from the rapid improvements in storage technology, battery-based energy storage systems (BESS) are gaining acceptance at the grid-scale level to address the intermittent nature of variable renewable energy (VRE) sources like wind and solar. With the large-scale induction of VRE in the grid, concerns about their irregular output are rising.
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Trade deficit with regional states balloons 62pc
The country’s trade deficit with nine neighbouring countries swelled by 62 per cent to $2.917 billion in the first quarter of the current fiscal year from $1.80bn. Trade experts attributed the surge mainly to increased imports from China, India and Afghanistan. Since the deficit rise remains unchanged from the previous fiscal year, it may cause policymakers big problems. In FY24, the trade deficit with these countries was $9.506bn, up 49pc from $6.382bn in the preceding fiscal year. Exports to Afghanistan, Bangladesh and Sri Lanka saw an upward trend in the July-September period FY25, but exports to other countries, especially China in the region, continued to decline during the months under review, according to data compiled by the State Bank of Pakistan.
Related news categories: business economic-indicators misc