Karachi Stock Exchange
The Karachi Stock Exchange or KSE is a stock exchange located in Karachi, Sindh, Pakistan. Founded in 1947, it is Pakistan's largest and oldest stock exchange, with many Pakistani as well as overseas listings. Its current premises are situated on Stock Exchange Road, in the heart of Karachi's Business District.
History
Karachi Stock Exchange is the biggest and most liquid exchange in Pakistan. It was declared the “Best Performing Stock Market of the World for the year 2002”. As of Dec 8, 2009, 654 companies were listed with a market capitalization of Rs. 2.561 trillion (US$ 30.5 billion) having listed capital of Rs. 705.873 billion (US$ 10.615 billion). The KSE 100TM Index closed at 10246 on April 01, 2010.
Business
Trading
The exchange has pre-market sessions from 09:15am to 09:30am and normal trading sessions from 09:30am to 03:30pm. It is the second oldest stock exchange in South Asia.[2] 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.
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 reached its highest value ever and 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.
KSE has seen some fluctuations since the start of 2008.
Karachi stock exchange Board of Directors has recently (2007) announced plans to construct a 40 story high rise KSE building, as a new direction for future investment.
Disputes between investors and members of the Exchange are resolved through deliberations of the Arbitration Committee of the Exchange.
KSE began with a 50 shares index. As the market grew a representative index was needed. On November 1, 91 the KSE-100 was introduced and remains to this day the most generally accepted measure of the Exchange. Karachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark used to compare prices overtime, companies with the highest market capitalization are selected. To ensure full market representation, the company with the highest market capitalization from each sector is also included.
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. On August the 29th, 1995 the KSE all share index was constructed and introduced on September 18, 1995.
2008 and 2009 Karachi Stock Exchange Crisis
* April 20 : Karachi Stock Exchange achieved a major milestone when KSE-100 Index crossed the psychological level of 15,000 for the first time in its history and peaked 15,737.32 on 20 April, 2008. Moreover, the increase of 7.4 per cent in 2008 made it the best performer among major emerging markets.[3][4]
* May 23: Record high inflation in the month of May, 2008 resulted in the unexpected increase in the interest rates by State Bank of Pakistan which eventually resulted in sharp fall in Karachi Stock Exchange.[5][6]
* July 17 :Angry investors attacked the Karachi Stock Exchange in protest at plunging Pakistani share prices.[7][8]
* July 16 : KSE-100 Index dropped one-third from an all-time high hit in April, 2008 as rising pressure on shaky Pakistan's coalition government to tackle Taliban militants exacerbates concern about the country's economic woes.[9]
* August 18: KSE 100 Index rose more than 4% after the announcement of the resignation of President Pervez Musharraf but Credit Suisse Group said that Pakistan's Post-Musharraf rally in Stock Exchange will be short-lived because of a rising fiscal deficit and runaway inflation.[10][11]
* August 28 :Karachi Stock Exchange set a floor for stock prices to halt a plunge that has wiped out $36.9 billion of market value since April.[12]
* December 15: Trading resumes after the removal of floor on stock prices that was set on August 28 to halt sharp falls.[13]
* September 1: Due to these crisis in the market many brokers shift towards other jobs. Muhammad Afzal (THE PACHTAWA), the big player of the market, also shifted from the Stock Market to another job. Currently he is working in the SNL Pakistan (Pvt.) Ltd. as a Tier 1 Analyst.
Business | Investment
Pakistan emerges a market winner
It is widely accepted that despite the US recession and a slowdown in developed markets, the world economy will continue to grow, with the prospects favouring major developing countries such as Brazil, Russia, India and, above all, China.
* By Tony Foley, Special to Gulf News
* Published: 00:38 April 12, 2008
* Gulf News
It is widely accepted that despite the US recession and a slowdown in developed markets, the world economy will continue to grow, with the prospects favouring major developing countries such as Brazil, Russia, India and, above all, China.
The tricky part is that it doesn't appear to be the case. The real winners are countries like Pakistan - so far this year's best-performing emerging market, with bags of untapped potential as political stability returns to the country.
Indexes have their limitations but they can identify trends and changes in investing patterns. In this period of global uncertainty they are also one of the few yardsticks we have for comparison. A glance at the Dow Jones Islamic Market Industry indexes, for example, finds that everything - from basic materials and consumer goods through financials, healthcare, industrials, energy, IT, telecom and utilities - is down so far this year by between one per cent and nearly 12 per cent.
Similarly, virtually all country or region specific Islamic indexes in the Dow Jones stable, like their conventional counterparts, are in negative territory by substantial margins. In fact, Pakistan is only joined by the Kuwait and Taiwan Islamic Market Indexes in outperforming the Dow Jones Industrial Average this year. We may be seeing the first sign of cooling of investor sentiment towards emerging markets.
Pakistan is firmly bucking the trend. This year, the Karachi Stock Exchange 100 has gained 7.4 per cent, making it the best performer among major emerging markets indexes. Similarly, the Dow Jones Wilshire Pakistan Index is up 7.8 per cent and the Dow Jones Islamic Index for Pakistan up a comparable 7.62 per cent, as of March 25.
Comparison
Compare that with India's Sensex which has tumbled 20 per cent this year and China's Shanghai Composite that has dropped 31 per cent. Similarly, the Dow Jones Brazil, Russia, India and China (BRIC) 50 Index is down 16.5 per cent this year with the Islamic BRIC Index going further downhill by 17.68 per cent.
In fact, the most dramatic decline this year has been in the Dow Jones Islamic Market China Offshore Index, which has tumbled by a hefty 30 per cent, closely tailed by the conventional China Offshore 50 Index, down by 25.38 per cent.
February's elections and the recent swearing in of Pakistan's new Prime Minister Yousaf Raza Gilani are a major step in restoring longer term political stability to the country. But the economic indicators were there even before these events. While reporting of bombings and assassinations have been making the headlines, broad-based economic growth in Pakistan has averaged about 7.5 per cent over the last five years. Market capitalisation of the Karachi Stock Exchange is $75 billion while Pakistan's GDP in 2007 totalled $145 billion.
Pakistan has also been singled out by the Investors Chronicle as one of the seven hottest emerging markets, along with Ukraine, Kazakhstan, Egypt, the UAE, Bangladesh and Nigeria, and is seen as offering tremendous investment opportunities exceeding those of other emerging markets.
That's not to say that Pakistan's economic potential will not once again be overshadowed by turbulent and violent politics or succumb to a global turndown. Right now, however, the indexes are telling us investors are taking a bullish view.
- The author is a freelance writer based in Dubai.
