An Analysis of the Karachi Stock Exchange

The Karachi Stock Exchange is the oldest and premier equity exchange in Pakistan. Established on September 18th 1947 it was incorporated a few old ages subsequently in 1949. Since so it has experienced a singular advancement with merely 5 companies listed and 90 members on the Exchange in the 1950s and 663 listed companies and 200 members in 2006. In 2002, the Karachi Stock Exchange was recognized internationally for the best executing stock markets in the universe.

Since 1990, corporate entities can go members on the Karachi Stock Exchange. However, they have to run into certain demands of the Board of Directors and have a minimal capital of Rs. 20 million. At the beginning of 2006, 120 corporate members were registered on the Exchange.

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The Karachi Stock Exchange trades the KSE-100 Index. It is a highly-diversified index of 100 largest capitalisation companies stocks from all sectors of Pakistan economic system. A invariably revised index is a good index of the overall Exchange public presentation over a period of clip. In 2005, 88 % of the KSE entire market capitalisation was represented by the KSE-100 Index. At the terminal of 2006, KSE-30 index was introduced, which was Pakistan foremost free float index comprising of 30 most floated stocks in KSE. KSE-30 index was merchandising at 14,199 points ( March. 15, 2007 ) .

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Foreign purchasing involvement had been really active on the KSE in 2006 and has continued in 2007 so far. Harmonizing to estimations from the State Bank of Pakistan, foreign investing in capital markets total about US $ 523 Million. Harmonizing to a research analyst in Pakistan, around 20pc of the entire free float in KSE-30 index is held by foreign participants.

KSE has seen some fluctuations since the start of 2007. One ground could be that it is the election twelvemonth in Pakistan, and stocks are expected to stay dull. KSE has set an all clip high of 12,400 points, before settling around the 11,000 grade. Result season in June and better payout outlooks can drive the market to enter degree high once more.

As of 26th January 2011, the KSE-100 index stands at 12,483 and trade volume of 122.7 million ( value 5.66billion ) .

Lahore Stock Exchange ( LSE )

Lahore Stock Exchange ( G ) , Ltd. operates as a stock exchange in Lahore. The company provides IT services, position merely terminal, and agent services. It besides provides extremist trade services, such as system architecture, user interface, order entry, on-line trading, security, hazard direction system, symbol freezing and qui vives, crash recovery and Reconstruction, exchange direction and control characteristics, and back office services. Lahore Stock Exchange was founded in 1970 and is the 2nd largest stock exchange in the state with a market portion of around 12-16 % in footings of daily traded volumes.

LSE has 519 companies, crossing 37 sectors of the economic system, that are listed on the Exchange with entire listed capital of Rs. 555.67 billion holding market capitalisation of around Rs. 3.64 trillion. LSE has 152 members of whom 81 are corporate and 54 are single members.

The Lahore Stock Exchange 25 company index besides calculates the public presentation of stocks presuming that all rights issues and fillips portion issues merely increase the listed capital.

LSE, being a ego regulative organisation has its ain sets of regulations and ordinances to modulate its assorted activities including listing of companies/ securities on its ready board citation, supervising of member houses to implement conformity with fiscal and operational demands, periodic cheques on agent ‘s gross revenues patterns, and the uninterrupted monitoring and surveillance of their trade operations.

Some general regulations HYPERLINK “ hypertext transfer protocol: // ” & amp ; HYPERLINK “ hypertext transfer protocol: // ” ordinances include: Automated trading ordinances for LOTS, Carry over dealing ordinances, HYPERLINK “ hypertext transfer protocol: // Protection Fund Regulations.pdf ” Investor protection fund ordinances, LSE listing ordinances, Regulations regulating hard currency settled hereafters contract, Regulations regulating future contracts of LSE, Regulations regulating hazard direction. Systems audit ordinances, The border trading ordinances oHYPERLINK “ hypertext transfer protocol: // Margin Trading Regulations Of Lahore Stock Exchage SIDRA.pdf ” degree Fahrenheit Lahore Stock Exchange.

LSE has made direct investing in Pakistan Credit Rating Agency, Central Depository Company Ltd, National Clearing Company of Pakistan Ltd and National Commodity Exchange Ltd all of which play a cardinal function in developing the substructure around the fiscal markets of Pakistan. LSE has increased its geographical outreach by set uping its subdivisions in other metropoliss of the Province i.e. Faisalabad and Sialkot.

As of 26th January 2011 LSE-25 Index stood at 3,846.

Islamabad Stock Exchange ( ISE )

Islamabad Stock Exchange or ISE is one and youngest of the three stock exchanges of Pakistan and is located in the capital of Islamabad. Islamabad stock exchange ( ISE ) was incorporated as a warrant limited company on 25 October 1989 in Islamabad capital district with the chief object of puting up of a trading and colony substructure, information system, skilled resources, handiness and a just and orderly market topographic point that ranks with the best in the universe. It was licensed as a stock exchange on 7 January 1992. For the first clip, it started merchandising in July 1992.

On 1 January 2004, ISE launched its ain capital weighted index which is ISE-10 index with a base day of the month of Dec 31, 2002 and a value of 1000. Before its launch ISE was utilizing index of KSE-100. ISE besides has a monetary value weighted index called ISE Network Index which was launched on November 1996.

ISE incorporated Code of Corporate Governance in its listing ordinances on 2002 to beef up corporate administration patterns in companies of Pakistan. In order to implement a good corporate administration patterns in stock exchanges of Pakistan, ISE took the lead to elect a non-broker Chairman for the twelvemonth 2006.

Investor Protection Fund has been established in ISE for the protection of investors. ISE took the enterprise to present system audit of agents in 2002 and made it compulsory for keeping internal control on members. To increase market transparence and better its surveillance capacity, the Unique ( Client ) Identification Number ( UIN ) System was launched at pre trade degree in August 2006 in ISE. Besides a new hazard direction construction ( RMS ) was introduced in December 2006 in ISE. New RMS included, among others, a new gauze government ; a margining system based on value at hazard ( VAR ) and capital adequateness. The VAR is a province of the art hazard direction system practiced internationally that takes into history hazard associated with each portion based on historical informations. System audit of agents was introduced in 2003 and made necessary.

Islamabad Stock Exchange joined custodies with Lahore Stock Exchange to set up a Incorporate Trading Platform to assist in conveying increased liquidness in the market, bettering monetary value find, maximising transparence, increasing turnover, broadening investor base, restricting hazards and deformations in trade, supplying cost effectual service to the puting populace and heightening the image of both the Exchanges.

As of 26th January 2011 ISE-10 Index stood at 3,088 and a trading volume of 83,300 ( value 4.23 million ) .


A tribunal postponed a hearing against four employees of the Allied Bank Limited, Lahore Stock Exchange subdivision, till December 5 to wait for the NAB to register a auxiliary mention against them. The ABL functionaries, Tasneem Akhtar, Faisal Hussain Butt, Muhammad Sagheer Asghar Goraya and Tahir Awais are accused of Rs 298 million fraud.

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