Stock Exchanges of Pakistan

Islamabad Stock Exchange

Islamabad Stock Exchange is one of the three stock exchanges of Pakistan and is located in the capital of Islamabad. It was incorporated on October 25, 1989 and it became fully operational on August 10, 1992. Islamabad Stock Exchange is centrally located in Anees Plaza, Fazal ul Haq Road, Islamabad. A new development project is underway to establish a new building for the exchange.

At present there are 119 members out of which 93 are corporate bodies including commercial and investment banks, DFIs and brokerage houses. The other 26 Members are individual persons who are well educated, enterprising and progressive minded. The affairs of the Exchange are governed by the Board of Directors. The Board of Directors consists of ten directors, of which five are elected member directors and four are non-member directors nominated by the SECP while the managing director by virtue of his office is the tenth director of the Board . In order to protect the interest of the investing public, an Investors Protection fund has been established by the Exchange.

Since the inception of automated trading system (ISECTS), the trade volume has been multiplying day by day and the average daily turnover has now crossed the figure of 1 million shares. Now all the listed securities are traded through the ISECTS. The system of physical handling of shares and securities has been phased out and majority of the scrips are settled through Central Depository Company of Pakistan Limited.

At the moment there are 241 companies/securities listed on the Exchange with an aggregate capital of Rs. 389.512 billion. The market capitalization stood at Rs. 2,275.00 billion as on 04-04-2007 . The pace of listing has remained slow as the economy of the Country is under consistent pressure due to internal as well as external factors.

In comparison with major financial markets around the World, the functioning of capital market in Pakistan is still very much in its infancy and lacks advanced technology. In this context efforts are being made to edited by khalid shah ciit

The Islamabad stock exchange is going to be shifted to its new home in a few year, as the new Islamabad Stock Exchange is currently under construction in the capital.

Karachi Stock Exchange:

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 Sept25, 2009, 654 companies were listed with a market capitalization of Rs. 2.806 trillion (US$ 33.81 billion) having listed capital of Rs. 705.873 billion (US$ 10.615 billion). The KSE 100TM Index closed at 9359 on Sept 29, 2009.

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 12th 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 20, 2007, 671 companies were listed with the market capitalization of Rs. 4364.312 billion (US$ 73 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. 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 15,000 points, before settling around the 14,000 mark.

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 1st, 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.

Lahore Stock Exchange:

LSE is Pakistan's second largest stock exchange after the Karachi Stock Exchange. It is located in Lahore, Pakistan.

History

The Lahore Stock Exchange (Guarantee) Limited came into existence in October 1970, under the Securities and Exchange Ordinance of 1969 by the Government of Pakistan in response to the needs of the provincial metropolis of the province of Punjab. It initially had 83 members and was housed in a rented building in the crowded Bank Square area of Lahore. The number of listed companies has increased to 519 since its inception. With 37 sectors of the economy and 519 listed companies with total capital of Rs. 555.67 billion having market capitalization of around Rs. 3.64 trillion . The LSE has 152 members of which 81 are corporate, and 54 are individual members. The LSE was the first stock exchange in Pakistan to use the internet and currently 50% of its transactions are via the internet.

The Lahore Stock Exchange has opened branches in the industrial cities of Faisalabad and Sialkot for trading. The Sialkot branch is referred to as the "Sialkot Trading Floor".

LSE Index

LSE-25: The Lahore Stock Exchange Twenty Five company index also calculates the performance of stocks assuming that all rights issues and bonus share issues only increase the listed capital. In the case of bonuses or rights the prices of the shares are not adjusted as they are in the case of the LSETRI. However, the LSE25 assumes that dividends paid out by a component company are not reinvested. In summary, in the LSE25, no price adjustments are made when any component company issues cash dividends.

The Lahore Stock Exchange Total Return Index calculates the performance of stocks assuming that all payouts are reinvested in the index on the ex-date. The LSETRI assumes that if a component company issues bonus shares or announces a rights issue it will increase the listed capital. Additionally, the LSETRI also assumes that all pay-outs by a component company are 100% reinvested in the index. Therefore, the LSETRI is adjusted against such payouts announced by any of index constituents on its ex-date allowing the index value to remain comparable over time