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History: Karachi Stock Exchange 100 Index

The Karachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark used to compare stock prices over time in Pakistan. It includes the 100 companies with the highest market capitalization as well as at least one company from each economic sector to ensure full market representation. The index was launched in 1991 at 1,000 points and skyrocketed over the years to reach a peak of over 12,000 points in 2007, demonstrating rapid growth of the Karachi stock market.

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72 views2 pages

History: Karachi Stock Exchange 100 Index

The Karachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark used to compare stock prices over time in Pakistan. It includes the 100 companies with the highest market capitalization as well as at least one company from each economic sector to ensure full market representation. The index was launched in 1991 at 1,000 points and skyrocketed over the years to reach a peak of over 12,000 points in 2007, demonstrating rapid growth of the Karachi stock market.

Uploaded by

Mudassar Ejaz
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Karachi Stock Exchange 100 Index

(KSE-100 Index) is a benchmark used to compare prices over a period of


time, companies with the highest market capitalization are selected.
However, to ensure full market representation, the company with the highest
market capitalization from each sector is also included. This approach has
disadvantages to go along with its advantages.

The index was launched in late 1991 with a base of 1,000 points. By 2001, it
had grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It
reached a peak of 12,285 in February 2007.

The following is a list of 30 companies with the highest weightage in the


index and account for over 82.95% of the KSE index as of March 15, 2005:

History
Karachi Stock Exchange is the biggest and most liquid exchange in Pakistan.
Furthermore, it has been declared as the “Best Performing Stock Market of
the World for the year 2002” by “Business Week”. As at March 15, 2007,
754 companies were listed with the market capitalization of Rs. 3,200.182
billion (US $ 52.00) having listed capital of Rs. 495.968 billion (US $ 8.27
billion). The KSE 100 Index closed at 11,310 on March 15,2007.

KSE has been well into the 4th year of being one of the Best Performing
Markets of the world as declared by “Business Week”. Similarly USA
Today termed Karachi Stock Exchange as one of the best performing
bourses in the world. [1]

Foreign buying interest had been very active on the KSE in 2006 and has
continued in 2007 so far. According to estimates from the State Bank of
Pakistan, foreign investment in capital markets total about US$ 523 Million.
According to a research analyst in Pakistan, around 20pc of the total free
float in KSE-30 index is held by foreign participants.

KSE has seen some fluctuations since the start of 2007. One reason could be
that it is the election year in Pakistan, and stocks are expected to remain dull.
KSE has set an all time high of 12,400 points, before settling around the
11,000 mark. Result season in June and better payout expectations can drive
the market to record level high again.
Performance
As measured by the KSE 100 Index, the Karachi stock market has grown
rapidly in the current century. The Karachi Stock Exchange was acclaimed
as the best-performing stock market of the world in 2002.

KSE Indices
KSE began with a 50 shares index. As the market grew, a representative
index was needed. On November 1, 1991 the KSE-100 was introduced with
a base of 1,000 points. By 2001, it had grown to 1,770 points. By 2005, due
to a period of robust growth the index had skyrocketed to 9,989 points. It
reached a peak of 11,485 points in March 2006. As at March 2007 it is
currently trading at 11,310 points (March. 15, 2007). The KSE-100 approach
remains to this date the most generally accepted measure of the Exchange.
The KSE-100 is a capital weighted index and consists of 100 companies
representing about 86 percent of market capitalization of the Exchange. At
the end of 2006, KSE-30 index was introduced , which was Pakistan first
free float index comprising of 30 most floated stocks in KSE. KSE-30 index
was trading at 14,199 points (March. 15, 2007).

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