KARACHI STOCK EXCHANGE

A stock index or stock market index is a method of measuring the value of a section of the stock market. It is computed from the prices of selected stocks (sometimes a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments. 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.Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. Companies with the highest market capitalization are selected. The 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 company with the highest market capitalization from each sector is also included. The index was launched in November 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 then reached to 12,285 in February 2007. KSE-100 index touched the highest ever benchmark of 14,814 points on December 26, 2007, a day before the assassination of former Prime Minister Benazir Bhutto, when the index nosedived. The index recovered quickly in 2008, reaching new highs near 15,500 in April. However, by November 22, 2008 during the global financial crisis of 2008 it had fallen to 9,187. As at 7 November 2012 index recorded highest level of 16,218 points and is now KSE is being considered as a emerging market in Asia with returns in financial year 2011-2012 up to 40 to 50 %.today 15th January 2013 Prime Minister was arrested due to which KSE 100 index down 500 hunderd Points. Dollar increased then 99 and point some. KSE 100 index was disqualified on 16,125 points after falling 525 points. The following is a list of 10 companies with the highest market capitalization volume and their respective weightages in the index and account for over 57% of the KSE index as of November 7, 2012: Weight (%) Development 13.32 Market Millions) 119,838 Capitalization (PKR

Number Company Name 1 Oil and Company Gas

2 3 4 5 6 7 8 9 10

Fauji Fertilizer Company Limited MCB Bank Limited Pakistan Petroleum Pakistan Oilfields Hub Power Company Unilever Engro Corporation United Bank National Bank of Pakistan

9.00 7.80 6.79 5.10 4.45 3.05 2.73 2.65 2.31

80,973 70,160 61,045 45,894 40,026 27,476 24,531 23,875 20,741

The KSE-100 is a capital weighted index and consists of 100 companies representing about 90 percent of market capitalization of the Exchange. 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 29, 1995 the KSE all share index was constructed and introduced on September 18, 1995.

GROWTH OF KSE:
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. 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.

CRISES OF KSE:

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 stock exchange 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 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. July 17 :Angry investors attacked the Karachi Stock Exchange in protest at plunging Pakistani share prices. 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. 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. 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. December 15: Trading resumes after the removal of floor on stock prices that was set on August 28 to halt sharp falls. December 06 2012 :Karachi Stock Exchange KSE hits third straight record high In its History.