KARACHI: Universal Network Systems Ltd (UNSL), a logistics firm operating under the brand name of BlueEX, said on Friday it’s decided to migrate to the main board of the Pakistan Stock Exchange (PSX) from the Growth Enterprise Market (GEM) board, which is a separate PSX counter reserved for smaller and riskier companies.

Only three firms are currently listed on the GEM board that the PSX rolled out last year to help start-ups and growing entities raise capital from institutional and high net worth individuals. UNSL is the second GEM-listed entity that’s shifting to the main board as Supernet Ltd, a technology firm, announced early this month that it intended to make the same transition.

Pak Agro Packaging Ltd will be the only GEM-listed firm in case the two companies receive regulatory approvals to migrate to the main board.

Speaking to Dawn, UNSL Chief Financial Officer Salman Hameed said the main purpose of the migration is to encourage a larger number of investors to participate in the share’s trading. “The switch will help us attract greater interest from investors,” he said.

“Trading is restricted on the GEM board in the sense that not every investor is eligible to buy and sell shares. That’s the reason all GEM-listed firms have low volumes,” said Mr Hameed.

Only institutional players and “accredited individual investors” with assets of Rs5 million can trade securities listed on the GEM board.

The share price of UNSL was Rs48.50 on Friday, down more than one-fourth from the time of listing less than a year ago. The company CFO blamed the fall in the share price to the overall macroeconomic situation and a lack of price discovery on the side board of the PSX.

Only one trade took place on the GEM board on Friday versus over 89,000 on the regular board. The total traded volume on the GEM board was only 500 shares while the value traded remained just Rs22,500 on Friday.

PSX Chief Operating Officer Nadir Rahman told Dawn the GEM board has a “narrower investor base” by definition. It provides SMEs with an “initial platform” to gradually move towards the governance requirements for a publicly listed company and ultimately benefit from a main-board listing, he added.

“As the GEM board matures, regulatory amendments may be considered whereby a public investor may participate in the secondary market after, for example, a certain defined time period,” said Mr Rahman.

UNSL sold one-quarter of its shareholding at the rate of Rs65 per share in November last year to raise Rs446m. The company was incorporated in 2005 as a domestic cargo consolidator. It shifted its focus towards ecommerce logistics in 2011 and conducted the country’s first cash-on-delivery shipment under the BlueEX brand.

The objective of listing was to raise funds for the infrastructure expansion of the company, which aimed to take the number of its nationwide distribution hubs from 35 to 160 in three years.

Published in Dawn, October 29th, 2022