Karachi Stock Exchange (Guarantee) Limited:
A brief description about Karachi Stock Exchange (Guarantee) Limited (KSE).
Karachi Stock Exchange (Guarantee) Limited (KSE), currently the biggest and most liquid
stock exchange in Pakistan, was established on September 18, 1947. It was incorporated
on March 10, 1949. Only five companies were initially listed with a total paid-up capital
of 37 million rupees. The first index introduced in KSE was based on fifty companies and
was called KSE 50 index. Trading used to be carried out on open out-cry system.
With growth in number of listed companies and trading activities, a dire need for a true
representative index and computerization of trading activities was felt. As a result KSE 100
Index was introduced on November 1, 1991. Computerized trading system called Karachi
Automated Trading System (KATS) was introduced in 2002 with a capacity of 1.0 million
trades per day and the ability to provide connectivity to an unlimited number of users.
To reconfirm the KSE-100 and to provide the basis of index trading in future, an all share
index was introduced in 1995 which became operational on September 18, 1995. To address the
needs of investor community two other indexes were also introduced later on called KSE 30
Index and KMI 30 Index.
Karachi Stock Exchange is located on Stock Exchange Road, in the heart of business district
of Karachi. The premises is known as Stock Exchange Building.
Listing in KSE:
As on March 31st, 2015 there are 580 companies listed in KSE
and the total market capitalization is Rs. 7,307.779 billions.
The listing is done on the basis of strict rules and regulations laid out by
Securities Exchange Commission of Pakistan (SECP) & Karachi Stock Exchange
(Guarantee) Limited. All the listed companies are categorized in various main business
sectors. There are total 36 sectors listed on Karachi Stock Exchange.
Out of these, 33 sectors contribute towards the market capitalization
and all the listed companies (excluding their future contracts) are divided among these.
Rest of the 3 sectors are allocated for indexes, futures bonds
These non market capitalization contributing sectors are as follows;
- Non Equity Inv Instruments
- Stock Index Future Contracts
For a complete list of sectors,
For a complete list of listed companies,
Detailed information about these indexes can be obtained from KSE's web site
KSE 100 Index:
The KSE-100 Index was introduced in November 1991 with base value of 1,000
points. The Index comprises of 100 companies selected on the basis of sector
representation and highest market capitalization, which captures over 90% of the
total market capitalization of the companies listed on the Exchange. Out of the
above mentioned 36 Sectors, 33 companies are selected i.e. one company from each sector (excluding the non
market capitalization contributing sectors) on the basis of the largest market
capitalization and the remaining 67 companies
are selected on the basis of largest market capitalization in descending order.
This is a total return index i.e. dividend, bonus and rights are adjusted.
KSE ALL Index:
In 1995, the need was felt for an all share index to reconfirm the KSE-100 and also
to provide the basis of index trading in future. By August 29, 1995 the KSE-All
Share Index was constructed which became operative on September 18, 1995.
Similar to KSE 100 Index, KSE ALL Index is also calculated using market
KSE 30 Index:
The primary objective of the KSE-30 Index is to have a benchmark by which the stock
price performance can be compared to over a period of time. In particular, the KSE-30
Index is designed to provide investors with a sense of how large companies' scrips
of the Pakistan’s equity market are performing. Thus, the KSE-30 Index will be
similar to other indicators that track various sectors of country’s economic activity
such as the gross national product, consumer price index, etc.
KSE-30 Index is calculated using the “Free-Float Capitalization” methodology. In
accordance with methodology, the level of index at any point of time, reflects the
free-float market value of 30 companies in relation to the base period. The
free-float methodology refers to an index construction methodology that takes into
account only the market capitalization of free-float shares of a company for the
purpose of index calculation.
KMI 30 Index:
Introduced in Spetember 2008, the objective of KSE-Meezan Index (KMI) is to serve
as a gauge for measuring the performance of Shariah compliant equity investments.
Besides tracking performance of Shariah compliant equities, its construction will
increase investor trust and enhance their participation.
KSE-Meezan Index is also calculated using the “Free-Float Capitalization”.
For a list of current Shariah compliant companies and their selection criteria
Al-Meezan Investment Management Limited
Other Stock Exchanges in Pakistan:
Lahore Stock Exchange (Guarantee) Limited (LSE):
Lahore Stock Exchange is Pakistan's second largest stock exchange after the Karachi
Stock Exchange (KSE).
It came into existence in October 1970, under the Securities and Exchange Ordinance
of 1969 by the Government of Pakistan in response to the needs of the provincial
metropolis of the province of Punjab. It initially had 83 members and was housed in
a rented building in the crowded Bank Square area of Lahore. The LSE was the first
stock exchange in Pakistan to use the internet and currently 50% of its transactions
are carried out via internet.
The Lahore Stock Exchange has opened branches in the industrial cities of Faisalabad
and Sialkot for trading. The Sialkot branch is referred to as the "Sialkot Trading
Islamabad Stock Exchange (Guarantee) Limited (ISE):
Islamabad Stock Exchange is the youngest of the three stock exchanges of Pakistan.
It is located in Islamabad, the capital city of Pakistan. The Islamabad Stock
Exchange (ISE) was incorporated as a guarantee limited Company on October 25, 1989
in Islamabad Capital territory of Pakistan with the main object of setting up of a
trading and settlement infrastructure, information system, skilled resources,
accessibility and a fair and orderly market place that ranks with the best in the
world. The purpose for establishment of the stock exchange in Islamabad was to cater
to the needs of less developed areas of the northern part of Pakistan. It was
licensed as a stock exchange on January 7, 1992.
The ISE Towers comprise twin 22 storey towers with unique and inspiring amenities,
offer futuristically and aesthetically designed offices with panoramic views, is
constructed over a piece of land measuring 5600 square yards in the heart of
Islamabad at Jinnah Avenue (Blue Area) which is the hub of all business and
commercial activities in Islamabad. The building is facing 400 feet wide Jinnah
Avenue on one side and has another entrance from 100 feet wide Nazim-ud-din Road.