Karachi Stock Exchange (KSE)

Haroon Askari, AMD

Introduction:
The Karachi Stock Exchange is a stock exchange located in Karachi, Sindh, Pakistan. It is Pakistan's largest and oldest stock exchange, with many Pakistani as well as overseas listings. Currently located in Stock Exchange Building on Stock Exchange Road, in the heart of Karachi's Business District, off I. I. Chundrigar Road.

History:
Founded in 1947, Karachi Stock Exchange (KSE) is the biggest and most liquid exchange in Pakistan. It was declared the Best Performing Stock Market of the World for the year 2002. A total of 654 companies were listed on December 8, 2009 with a market capitalization of Rs. 8.561 trillion (US$ 120.5 billion) having listed capital of Rs. 2805.873 billion (US$ 40.615 billion). The KSE-100 Index closed at 11,967 on May 16, 2011. Total market capitalization of the KSE reached Rs 2.95 trillion (US$ 35 billion approximately) on July 30, 2011.

Trading:
The exchange has pre-market sessions from 09:15am to 09:30am and normal trading sessions from 09:30am to 03:30pm.The Karachi stock exchange has undergone a considerable deal of downturn partly due to global financial crisis and partly on account of domestic troubles. It remained suspended in excess of 4 months and resumed normal trading only on December 15, 2008. The KSE 100 Index and KSE 30 Index after hitting the low around mid January has now rebounced and recovered 20-25% till March 12, 2009. By 30 July 2010 total market capitalization of the KSE reached Rs2.95 trillion, approximately 35 billion dollars.

Growth:
The KSE is the biggest and most liquid exchange in Pakistan and in 2002 it was declared as the Best Performing Stock Market of the World by Business Week. As of December 8, 2009, 652 companies were listed with the market capitalization of Rs. 2.561 trillion (US$ 30.5 Billion) having listed capital of Rs. 717.3 billion (US$ 12 billion). On December 26, 2007, the KSE-100 Index closed at 14,814.85 points. Foreign buying interest had been very active on the KSE in 2006 and continued in 2007. 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. Karachi stock exchange Board of Directors announced in 2007, their plans to construct a 40 story high rise KSE building, as a new direction for future investment. The exchange began with the KSE-50 index. As the market grew a representative index was needed. On November 1, 1991 the KSE-100 was introduced and remains to this day the most generally accepted measure of the Exchange. KSE-100 index is used as a benchmark to compare prices overtime and companies with the highest market capitalization from each sector are selected and included in it to ensure full market representation. 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. At present, the KSE has four market indices (KMI-30, KSE-30, KSE-100 and KSE-All Share Index).

VISION: To be a leading financial institution, offering efficient, fair and transparent Securities Market in the region and enjoying full confidence of the investors.

MISSION: To strive to provide quality and value-added services to the capital market in an efficient, transparent and orderly manner, compatible with international standards and best practices; To provide state-of-the-art technology and automated trading operations, driven by a team of professionals in accordance with good corporate governance; To protect and safeguard the interests of all its stakeholders, i.e. members, listed companies, employees and investors at large; and To reflect the countrys economic health and behavior and play its role for the growth, development and prosperity of Pakistan.

Key Role in Pakistan Economy:

The KSE is one of Pakistans largest tax payer and in the fiscal year 2006- 2007 contributed over Rs. 4 billion towards the national exchequer. Listed Companies contribute over 10% of total revenue collected by the Government of Pakistan KSE brokers on average pay more than 50% of their profit before tax as presumptive tax. Our investors pay 10% tax on dividends.

Website: www.kse.com.pk