Karachi Stock Exchange

MARKET HIGHLIGHTS




KSE-30 Index 10003.99
KSE-100 Index 9182.88
All Share Index 6639.06
KSE-30 Index 11224.18
KSE-100 Vol 1,800
KSE-100 Val (M) 0.09
KSE-100 Change 0.00
LATEST NEWS: Proposal: Shares KSE to be sold to Singapore, Dubai
27-10-08
KARACHI: A senior official of KSE has proposed to sell out shares of Karachi Stock Exchange to Singapore and Dubai to prevent floor from crisis.Meanwhile, Dubai, Singapore, and New Zealand have shown their interests in buying KSE shares while Chairman Securities said that the hegemony of some of the high-class figures working with government would keep demolishing small investors.His statement came after the MQM chief Altaf Hussain urged Sunday to open trade in KSE however brokers and dealers failed to accomplish dialogues to open trade here.He added that KSE might remain frozen for several weeks.
Banks offer fresh financing to local bourse. 20-10-08
KARACHI: Commercial banks operating in Pakistan have offered to provide fresh financing to local bourse. This was agreed after a meeting between commercial banks and the State Bank of Pakistan (SBP) here on Monday.Talking to Geo News, President Muslim Commercial Bank (MCB) Atif Bajwa also confirmed the news.He said the announcement of Rs270 billion bailout package by SBP has resolved the problem of liquidity crunch in the banking system. This amount is sufficient to last till March next year, he added.

HISTORY OF KARACHI STOCK 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 95 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, 95 the KSE all share index was constructed and introduced on September 18, 1995. Karachi Stock Exchange is the biggest and most liquid stock exchange and has been declared as the “Best Performing Stock Market of the World for the year 2002”. As on March 31, 2006, 663 companies were listed with the market capitalization of Rs. 3,257.062 billion (US $ 54.28) having listed capital of Rs. 486.489 billion (US $ 8.11 billion). The KSE 100 Index closed at 11485.90 on March 31, 2006 KSE has been well into the 4th year of being one of the Best Performing Markets of the world as declared by the international magazine “Business Week”. Similarly the US newspaper, USA Today, termed Karachi Stock Exchange as one of the best performing bourses in the world
The outgoing financial year ending June 2008 (FY08) turned out to be a difficult year for Pakistan Market, which after witnessing a bull run for 6 consecutive years (FY02-07), ended with a negative return of 11% (21% in US$ terms) and closed at 12,289 points level. Market Capitalization trimmed by 17% from US$ 66.5 bn to US$ 55.3 bn.
The market gained a 2.2% in first half (Jul-Dec) FY08 as against a negative return of 12.7% in second half (Jan-Jun) FY08. KSE-100 touched its all time high of 15,676 on 18 April, 2008, yet closed the fiscal year at 12,289 levels, down 22% from its peak. Weak Macro-economic fundamentals at the back of persistently high international oil prices amidst a less than perfect and a rather tumultuous transition towards perfect ‘Democratization’ led to a downgrading of the sovereign rating, capital outflows and, subsequently, a major tightening in monetary policy were the major reasons behind this massive correction. Moreover, rumors regarding implementation of Capital Gains Tax before the budget, also led to the prevalence of a negative sentiment in the market during the same time period.
In FY08, the average daily volume in ready market stood at 241.6 mn shares (up 14%), whereas average volumes in futures market fell by 10% and stood at 53.6 mn shares. In terms of value, average daily volumes were US$ 411mn in cash market up by 11% while in futures it was US$143 mn up 0.6%. On WoW closing basis, the market witnessed 27 positive closings with remaining weeks ending in red zone.

POLITICS AND ECONOMY DRIVE MARKET DOWN 11%


In FY08, the market posted a negative annual return of 11% in local currency terms (21% in US$ terms) against 6-year (FY02-07) average annual return of 48% in Rupee terms (50% in US$ terms). However, comparing the market’s performance on a half yearly basis, we can observe contrasting performance.
Despite fall in most of the regional markets, KSE’s performance was rather unimpressive as MSCI Emerging Asia (ex Japan) fell by only 6.6%. However, it still out-performed peers such as Taiwan, Malaysia, China and Philippines..



FERTILIZERS & E&P OUTPERFORM, BANKS UNDER PERFORM


Among key sectors, fertilizers and E&P sectors remained top performers with returns of 18.5% and 5%, respectively in their capitalization. Performance of the two index heavyweights was more than offset by dismal performances by banking and telecom sectors, which registered a decline of 40.6% and 30.8%, respectively. Banking sector came under pressure after the removal of Forced Sale Value benefit which resulted in higher NPL’s for the sector. Moreover, continued monetary tightening from the central bank which increased discount rates by 250bps during FY08 also had an adverse effect on the sector’s performance. Similarly, telecom sector’s under performance was mainly attributed to one off huge VSS cost of Rs 23 bn borne by the sector’s giant PTCL


FUTURE OUTLOOK



The medium term change in economic fundamentals for equities around emerging markets now appears to be more than adequately priced in. Moreover, the emerging economies have started to adjust to the new reality of high oil price and hence at the back of an expected slowdown in oil demand growth, any further major spike in oil prices can be ruled out. We’d like to reiterate the fundamental risk and return feature of the equities and the fact that equities have outperformed most other investment classes over the last century around the globe, even after incorporating the various oil prices shocks that the world went through. Pakistan market is still offering a PE discount of 32% as against comparable Asian emerging markets. Going forward, Pakistan market is expected to stabilize around current levels once this ‘over reaction’ to the weakened economic fundamentals settles down. In the short to medium run, a softening in international oil prices, improvement in domestic politics, and softening in monetary policy stance remain the key triggers.

Lahore Stock Exchange

LSE-25: 2824.86 Change +0.26%

Beginning of the Lahore Stock Exchange was founded in October 1970 in the busy area of Bank Square in Lahore, Pakistan. It was formed under the Securities and Exchange Ordinance in Pakistan. There were originally 83 Punjab members but 25 years later, in 2004, there were a total of 650 members. The Lahore Stock Exchange has in fact become so popular that they have now opened 2 further branches in Faisalabad and Sialkot. At first the Lahore Stock Exchange had very few active members and there were only two opportunities to trade; the first was to trade through the Karachi Stock Exchange or trade only in Bonus, Vouchers and Bonds. This was mainly due to constraints from the size of the building and in just under 20 years, the Lahore Stock Exchange was moved to its present location at 19-Khayaban-e-Aiwan-e-Iqbal, Lahore. Since then both the industry of Pakistan and the Stock Exchange itself have gone from strength to strength, due to the coincidental time of the move; the relocation coincided with the Pakistan government accepting a market economy and heightened deregulation. The advance of the Lahore Stock Exchange. In recent years there have been a great many advances in the Lahore Stock Exchange. Business has seen a steady boom, a new Management Information System has been introduced and electronic clearing house activities as well as electronic purchasing are now being used. The future of the Lahore Stock Exchange. Many believe that this modernization and increasing growth will eventually take its toll on the Lahore Stock Exchange and managers have only just been able to keep control of it through the introduction of modern technologies. The fact is, a greater physical space will need to be introduced again in the near future and a ‘Construction Committee’ has been introduced to this end. Day trading only began at the Lahore Stock Exchange back in 1993 and the owners of the stock exchange along with the Construction Committee now aim to transform it from a local organization into a global player in the stock market. They began to implement large scale modernization in 1994 in order to keep up with the growth of the stock exchange and so far they have completed this admirably; they aim to keep expanding and improving until they
are stable and technologically advanced enough to take part in the world stock exchange. The Lahore Stock Exchange. Because of the already improved technology and implementation of new techniques coupled with the expected and planned growth the Lahore Stock Exchange is set to become a serious player and many areas of the world are already sitting up and paying attention to their progress. They offer the usual statistics and services that many of the world’s larger and longer established stock exchanges can offer, so it only seems a matter of time before they are competing but all of this is assuming that they can cope with the changes and growth they will need to go through.

Islamabad Stock Exchange

Islamabad Stock Exchange

Market highlights

ISE 10: 1687.25
ISE Volume: 1000
ISE Value: 3,500
Change: -8.18

LATEST NEWS: SECP resolves Rs. 50 bln Support Fund for stock markets
ISLAMABAD: Security and Exchange Commission of Pakistan (SECP) has held a meeting here concluding the resolve to provide Rs. 50 billion Support Fund for stock exchanges to cope with ongoing financial crisis on Wednesday.Director KESC Sohail Walia told Geo News that during the meeting, it was resolved to release Rs. 50 billion Support Fund to emancipate state’s stock markets from crisis.Market Support Fund would be available after October 27 and added that Rs. 20 billion Support Fund would be available straightaway while remaining Rs. 30 billion would be provided to stock markets through “Pit Option”.


Islamabad Stock Exchange or ISE. It was launched on the 25th day of October 1989 but it was only until the 10th day of August 1992 when it commenced operations altogether.

When the Islamabad Stock Exchange was inaugurated on 1989, it was recognized as a guarantee limited company. Although it is not the pioneer stock exchange in Pakistan, it is founded with an ultimate goal of being one of the leading securities market around the globe. ISE believes that this objective can be realized through a good trading and settlement foundation working side by side with a cutting-edge information system combined with experienced human resources.

Also, the ISE mainly ministers to the demands of companies in some areas in the northern side of the country that are considered underdeveloped. Even though it helps companies in the less developed parts of Pakistan, ISE still maintains an inimitable touchstone in relation to the productivity of its operations. This serves as an encouragement for both major and minor league companies who are reputed to be lucrative to be a part of the exchange. ISE is indeed portraying an indispensable part involving the economic progress of the developing areas which eventually leads to the general advancement of Pakistan's economy.

Currently, the ISE have 119 members actively participating. Out of those 119 members, 93 are corporate organizations. This encompasses investment banks as well as commercial banks, brokerage houses, and DFIs. The remaining number of members are individuals who are experienced, have inventive ideas, and are liberal-minded when it comes to the securities market industry.

A Board of Directors oversees every negotiation and issue involving the Islamabad Stock Exchange. The Board has ten directors all in all. Five out of the ten members are handpicked from the stock exchange's registered members. The Securities Exchange Commission of Pakistan, or SECP, elects the other four members. The last member of the Board is the managing director in honor of his appointment. Along this line, the ISE launched an Investors Protection Fund so as to secure the concernment of the financing public.

In order to further advance its operations, the ISE adopted a fully electronic trading system, known as the ISECTS. As a result, the volume of the exchange's trade continually doubled in a regular basis. Around this time, the typical turnover every day reached the one million shares mark. Presently, most, if not all, negotiations involving the securities listed in the market are done through the ISECTS. The manual approach in dispensing shares and securities has been abolished in favor of the automated trading system. A larger part of the scripts are verified through the Central Depository Company of Pakistan Limited.

Now, the Islamabad Stock Exchange has an overall number of 241 listed companies and securities. The collective capital amounts to Rs. 389.512 billion. On the 4th day of April 2007, ISE's market capitalization crossed to Rs. 2,275.00 billion. However, the rate of listing is directly affected by the country's economic crisis which is due to several inherent, and sometimes external, factors.

If ranked with the world's leaders in securities market, the Islamabad Stock Exchange has a long way to go before it can play in the major league. With this in mind, ISE never cease to elevate its operations by advancing the technology it utilizes and by adopting the International trading system and practices.