The
KSE index measures the stock market trading of the Karachi Stock Exchange, Pakistan. The companies with the best market capitalization are included in the Karachi Stock Exchange 100 Index. The KSE Index is also referred to as the KSE 100 index.
In order to represent the entire market by the stock index, the companies from different sectors with the highest market capitalization are included in the list. Though this technique suffers some disadvantages but has the advantage of representing all the sectors of the economy. The KSE index was launched in late 1991. The base point set for KSE was 1000, which grew to 1770 by 2001. But the most significant growth shown by the KSE 100 index was to achieve 9,989 points by 2005. Recently, in February 2007, the KSE index has reached to 12,285 points.
The board of directors of KSE decided to restructure the KSE-100 index on March 20, 2006 to be effective from April 3. The new index is believed made to capture the market capitalization of 90.16% in Pakistan.
The listing of a company in the
KSE index is not permitted unless the company has provided an undertaking to abide by the regulations suggested by the exchange. The company has also to undertake that -
- The securities shall be quoted on the Ready Quotation Board and the Futures Counter.
- The exchange is not bound to remove the security from the Quotation Board and/or the Futures Counter on the company's request.
- The exchange has the authority to remove the securities from the Ready Quotation Board or the Futures Counter without any prior notice.
- The company or the security may even be de-listed by the Board if any company perform any non-compliance or breach of undertaking signed.
Here are some regulations that the companies must satisfy in order to get enlisted in the exchange.
- Only those companies that are registered as a public limited company under the Ordinance are eligible to be listed in the index.
- The companies that are registered in Azad Jammu and Kashmir and Northern areas are eligible for listing and are regarded same as the Companies registered in Pakistan.
- No company is listed in KSE unless it has made a public issue that is subscribed by a minimum of 500 applications.