Assignment on KSE

Q-1: What is the number’s of listed companies on Tuesday 22^nd April

Answer:

The total number companies listed in Karachi stock exchange is 821

2: What is listing criteria of stock exchange?

Listing Requirements & Procedures:

Issue of capital is mainly governed by the Companies Ordinance 1984, Companies (Issue of Capital) Rules, 1996 and Listing Regulations, Regulations Governing Over the Counter (OTC) Market and criteria for listing framed there under.

A. The main requirements of listing on the ready market

1. Minimum paid up capital of Rs.200 million.

2. Minimum public offer as required under the Listing Regulations and the Companies (Issue of Capital) Rules, 1996.

3. Public offer of equity has to be subscribed by at least 500 applicants.

4. The offering document has to be cleared by the KSE before it is submitted to the Securities Exchange Commission of Pakistan for approval.

B. The main requirements of listing on OTC market

1. Minimum paid up capital of Rs.10 million.

2. Minimum public offer Rs.5 million or 25% of the capital whichever is higher.

3. Break-up value of the ordinary shares shall not be less than its face value at the time of listing.

4. The offering document has to be cleared by the KSE before it is submitted to the Securities Exchange Commission of Pakistan for approval.

C. Time frame for Listing

The listing application completed in every respect along with offering document is not required more than 2 weeks for clearance of the Exchange.

For further details please see the relevant Rules & Regulations, requirements/criteria for listing as well as the documents / information required for listing of securities, which have been placed separately on the website.

3: What is Karachi stock exchange 100 index and 30 index

Karachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark used to compare prices over a period of time, companies with the highest market capitalization are selected. However, to ensure full market representation, the company with the highest market capitalization from each sector is also included.

The Karachi Stock Exchange has launched the KSE-30 Index with base value of 10,000 points, formally implemented from Friday, September 1, 2006. The main feature of this index that makes it different from other indices are:

KSE-30 index is based only on the free-float of shares, rather than on the basis of paid-up capital.

The other indices in Karachi Stock Exchange represents total return of the market. That is, when a company announces a dividend, the other indices at KSE are not reduced/adjusted for that amount of dividend (whether cash or bonus).Whereas, KSE-30 Index is adjusted for dividends and right shares.

4: What are the inclusion criteria in 100 indexes?

COMPUTATION METHOD

1. OBJECTIVE & DESCRIPTION

The primary objective of the KSE100 index is to have a benchmark by which the stock price performance can be compared to over a period of time. In particular, the KSE 100 is designed to provide investors with a sense of how the Pakistan equity market is performing. Thus, the KSE100 is similar to other indicators that track various sector of the Pakistan economic activity such as the gross national product, consumer price index, etc.

2. COMPOSITION OF THE KSE100 INDEX

The KSE100 contains a representative sample of common stock that trade on the Karachi Stock Exchange. The KSE stocks that comprise the index have a total market value of around Rs. 1,197 Billion compared to total market value of Rs. 1,365 Billion for over 679 stocks listed on the Karachi Stock Exchange. This means that the KSE100 Index represents 88 percent of the total market capitalization of the Karachi Stock Exchange, as of 27th February, 2004.

3. STOCK SELECTION RULES

The selection criteria for stock inclusion in the recomposed KSE100 Index are:

Rule # 1: Largest market capitalization in each of the 34 Karachi Stock Exchange sectors excluding open-end Mutual Fund Sector.

Rule # 2: The remaining index places (in this case 66) are taken up by the largest market capitalization companies in descending order.

A number of the 34 top sector companies may also qualify for inclusion on the basis of their market capitalization. In other words, companies may qualify solely under rule 1, solely under rule 2, or under both.

The fact that the sector rule is identified as Rule 1 does not imply that it is more important, only that the nature of the selection process is such that it is the screening that is done first.