Karachi Stock Exchange

Free-Float Based KSE-100 Index

KSE-100 Index, Background
• What is KSE-100 Index?
The KSE100 index is 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 sectors of the
Pakistan economic activity such as the gross national product, consumer price
index, etc.
– The KSE-100 Index was introduced in November 1991 with base value of
1,000 points.
– The Index comprises of 100 companies selected on the basis of sector
representation and highest market capitalization, which tracks over 85% of
the total market capitalization of the companies listed on the Exchange.

• Pros
– KSE 100 was designed to provide investors with a sense of how the
Pakistan equity market has been performing.
– When KSE-100 was made, it was intended to be used for tracking various
sectors of the Pakistan economic activity, similar to those such as
• gross national product,
• consumer price index, etc.
• Cons
– This Methodology is not as popular now as it used to be
 KSE-100 Composition Basis (Existing)
The selection criteria for stock inclusion in the existing KSE-100 Index is based on
three main filters, namely Sector rule, Capitalization rule and Default rule. The top
sector companies may also qualify for inclusion on the basis of their market
capitalization.

• Sector Rule
– Largest market capitalization in each Karachi Stock Exchange sectors
excluding Open-end Mutual Fund Sector

• The Largest Capitalization Rule

– The remaining index places are taken up by the largest market
capitalization companies in descending order.

• The Default Counter and Non Tradable Rule

– Company which is on the Defaulters’ Counter and/or its trading is
suspended; declare Non-Tradable (i.e. NT) in preceding 6 months from the
date of re-composition shall not be considered in the re-composition of
KSE-100 Index

.
 KSE Indices Family
• KSE-100 Index introduced in November, 1991
– Most recognized index of the KSE
– Representation from all sectors of the KSE and includes the largest
companies on the basis of their market capitalization
– Represents over 85% of the market capitalization of the Exchange.
– Proposed to be migrated to Free-Float methodology shortly

• KSE-30 Index introduced in September, 2006

– Based on the “Free Float Methodology”
– Includes only the top 30 most liquid companies listed on the KSE.

• KMI-30 Index introduced in September, 2008

– Tracks the 30 most liquid Shariah-compliant companies listed at KSE
weighted by free-float adjusted market capitalization.
– 12% cap on weights of individual securities.
– Shariah Screening performed by Shariah Supervisory Board of Meezan
Bank (chaired by Justice (Retd.) Mufti Muhammad Taqi Usmani).
 Why Free Float Methodology?

– Places more weight on larger cap stocks

– Large-cap and illiquid stocks can swing the index with relative
ease

Market representative indices around the world are

– Selection linked to liquidity
– Based on free float
– Not capped
– Are easily reproducible by portfolio managers

This is why KSE-100 Index is proposed to be shifted to FF methodology

 FF based KSE-100

Pros
– Places weight on stocks relative to their tradability
– Impact of large-cap and illiquid stocks on index minimized
– Encourage more listings
– Motivation for companies to increase their free float
– More market representative Index
– Lesser volatility

Cons
– Portfolio adjustment due to shift
– Stakeholder awareness required about impact
Free Float Methodology

Select the Rank all

Apply Free Calculate
universe companies Test for
Float Free Float
from KSE- in selected Liquidity
Adjustment Weightage
All Share universe

Page 7
Methodology - Free Float Shares
Total Outstanding Shares XXX

Shares held by Directors/sponsors XXX

Government Holdings as promoters/acquirers/controllers XXX

LESS
Shares held by Associated Companies (Cross holdings) XXX

Shares held with general public in Physical Form XXX

Shares held by directors, Govt. holding, associates and in physical form XXX

FREE FLOAT SHARES XXX

Free Float methodology considers only those shares which are available for
trading
Page 8
 KSE-100 & FF KSE-100 Parallel Run
1. In the Index Experts Committee meeting no. 02 of 2011 it was almost concluded
that KSE-100 Index should be migrated to the Free Float Methodology

2. On the recommendation of the Committee, the KSE Governing Board in it’s

Meeting held in April 2012, approved the KSE-100 Free-Float Migration

3. The KSE Governing Board suggested parallel run of the two indices from 30th
May 2012 for the market to adjust to the revised methodology.

4. In light of the Index committee decision, the management started KSE-100

Index parallel run and started posting the result on the KSE website
 KSE-100 Stock Selection Rule Change
3. EXISTING KSE-100 STOCK SELECTION RULES: The current selection
criteria for stock inclusion in the recomposed KSE-100 Index are:

a) Rule # 1 Largest market capitalization in each Karachi Stock Exchange sectors

excluding Open-end Mutual Fund Sector;

a) Rule # 2 the remaining index places are taken up by the largest market
capitalization companies in descending order.

a) Rule # 3 Company which is on the Defaulters’ Counter and/or its trading is

suspended; declare Non-Tradable (i.e. NT) in preceding 6 months from the
date of re-composition shall not be considered in the re-composition of KSE-
100 Index.

NEW /REVISED STOCK SELECTION RULES: Rules 3(a) and 3(b) shall
now make use of “free-float market capitalization” instead of “market
capitalization”. Rule 3(c) will remain unchanged.
 Free-Float KSE-100 (Actual & % of Full Cap)
Free float share July Free Float
Serial Symbol Name Number of Shares
31 Weightage

1 Dreamworld Limited 32,000,000.00 14,600 0.05%

2 Unilever Pakistan Foods Limited 6,157,600.00 85,175 1.38%
3 Rafhan Maize Products Ltd. 9,236,400.00 401,380 4.35%
4 Pakistan Tobacco Company Limited 255,493,600.00 12,136,224 4.75%
5 Philip Morris (Pakistan) Limited 61,580,341.00 3,079,017 5.00%
6 Standard Chartered Bank (Pakistan) Limited 3,871,585,021.00 193,579,251 5.00%
7 Tandlianwala Sugar Mills Limited 117,706,300.00 5,885,315 5.00%
8 Ibrahim Fibres Limited 310,506,995.00 15,525,350 5.00%
9 Colgate Palmolive (Pak) Limited 36,329,496.00 1,816,475 5.00%
10 Nestle Pakistan Limited 45,349,551.00 2,267,500 5.00%
11 Al-Ghazi Tractors Limited 42,936,300.00 2,517,330 5.86%
12 Pakistan International Airline Corporation 2,877,217,467.00 184,687,649 6.42%
13 Bestway Cement Limited 578,201,974.00 41,112,301 7.11%
14 Atlas Honda Limited 82,725,229.00 7,193,504 8.70%
15 East West Insurance Company Limited 30,165,483.00 3,016,548 10.00%
16 Indus Dyeing & Manufacturing Co. Limited 18,073,731.00 1,807,373 10.00%
17 Habib Bank Limited 1,212,274,800.00 121,227,480 10.00%
18 Allied Bank Limited 946,342,009.00 94,634,201 10.00%
19 Meezan Bank Limited 903,367,448.00 90,336,747 10.00%
20 Grays of Cambridge Pakistan Limited 7,348,950.00 734,934 10.00%
 Free-Float KSE-100 (Actual & % of Full Cap)
Number of Outstanding
Shares as on July 31st Free float share as Free Float
Serial Symbol Name
2012 on July 31st 2012 Weightage

21 Engro Foods Limited 756,200,935.00 78,876,812 10.43%

22 GlaxoSmithKline Pakistan Limited 263,196,097.00 37,010,662 14.06%
23 Fatima Fertilizer Company Limited 2,100,000,000.00 300,000,000 14.29%
24 Oil & Gas Development Company Limited 4,300,928,400.00 631,481,890 14.68%
25 NIB Bank Limited 10,302,851,164.00 1,545,427,675 15.00%
26 Byco Petroleum Pakistan Limited 977,858,737.00 146,678,811 15.00%
27 Pakistan Telecommunication Co. Ltd. 3,774,000,000.00 585,361,194 15.51%
28 Shell Pakistan Limited 85,609,864.00 13,414,224 15.67%
29 Engro Polymer & Chemicals Limited 663,468,788.00 112,460,449 16.95%
30 Abbott Laboratories (Pakistan) Limited 97,900,302.00 19,340,029 19.75%
31 Sui Southern Gas Company Ltd. 880,916,400.00 176,183,262 20.00%
32 Pakistan International Container Terminal 109,153,152.00 21,830,630 20.00%
33 Silkbank Limited 2,671,604,827.00 534,320,965 20.00%
34 Attock Petroleum Limited 69,120,000.00 13,824,000 20.00%
35 Mari Gas Company Ltd. 91,875,000.00 18,375,000 20.00%
36 Agritech Limited 392,430,000.00 78,486,000 20.00%
37 Pakistan Telephone Cables Limited 21,000,000.00 4,200,000 20.00%
38 Kot Addu Power Company Limited 880,253,228.00 176,050,646 20.00%
39 Attock Cement Pakistan Limited 86,595,439.00 17,319,088 20.00%
40 Pakistan Petroleum Limited 1,314,476,010.00 272,767,016 20.75%
 Free-Float KSE-100 (Actual & % of Full Cap)
Number of Outstanding
Free float shares as Free Float
Serial Symbol Name Shares as on July 31st
on July 31st 2012 Weightage
2012
41 Jubilee General Insurance Co. Limited 118,646,640.00 24,718,033 20.83%
42 UniLever Pakistan Limited 13,293,880.00 2,805,303 21.10%
43 Clariant Pakistan Limited 34,118,229.00 7,419,300 21.75%
44 National Bank of Pakistan Limited 1,850,011,184.00 438,215,913 23.69%
45 Sui Northern Gas Pipelines Limited 576,560,606.00 144,140,151 25.00%
46 United Bank Limited 1,224,179,688.00 306,044,922 25.00%
47 Indus Motor Company Limited 78,600,000.00 19,650,000 25.00%
48 Arif Habib Corporation Limited 412,500,000.00 103,125,000 25.00%
49 EFU Life Assurance Limited 85,000,000.00 21,250,000 25.00%
50 International Steels Limited 435,000,000.00 108,750,000 25.00%
51 Shifa International Hospitals Limited 50,513,800.00 12,628,450 25.00%
52 Pakistan Cables Limtied 28,462,376.00 7,115,594 25.00%
53 Lotte Pakistan PTA Limited 1,514,207,200.00 378,551,802 25.00%
54 Pak Suzuki Motor Company Limited 82,299,851.00 21,597,504 26.24%
55 Thal Limited 73,663,561.00 22,099,066 30.00%
56 Dawood Hercules Corporation Limited 481,287,124.00 144,386,135 30.00%
57 Fauji Cement Company Limited 1,331,115,839.00 399,334,751 30.00%
58 Tri-Pack Films Limited 30,000,000.00 9,000,000 30.00%
59 National Refinery Limited 79,966,560.00 25,389,649 31.75%
60 Siemens (Pak) Enginnering Co. Ltd. 8,247,037.00 2,677,781 32.47%
 Free-Float KSE-100 (Actual & % of Full Cap)
Number of Outstanding
Free float shares Free Float
Serial Symbol Name Shares as on July 31st
July 31 Weightage
2012

61 ICI Pakistan Limited 92,359,050.00 30,993,540 33.56%

62 IGI Insurance Limited 111,535,937.00 37,959,186 34.03%
63 Packages Limited 84,379,504.00 29,532,826 35.00%
64 Faysal Bank Limited 824,311,825.00 288,509,138 35.00%
65 Fauji Fertilizer Bin Qasim Limited 934,110,000.00 326,938,500 35.00%
66 Attock Refinery Limited 85,293,000.00 29,852,550 35.00%
67 Bata Pakistan Limited 7,560,000.00 2,646,000 35.00%
68 Ghani Glass Limited 106,683,122.00 37,339,093 35.00%
69 Security Papers Limited 41,149,992.00 16,459,996 40.00%
70 NetSol Technologies Limited 77,910,203.00 31,164,081 40.00%
71 MCB Bank Limited 919,860,126.00 367,944,049 40.00%
72 Lucky Cement Limited 323,375,000.00 129,350,000 40.00%
73 Habib Metropolitan Bank Limited 1,047,831,480.00 419,132,592 40.00%
74 Millat Tractors Limited 36,605,406.00 14,642,163 40.00%
75 Nishat Power Limited 354,088,500.00 142,674,723 40.29%
76 Nishat Chunian Power Limited 367,346,939.00 149,341,919 40.65%
77 Askari Bank Limited 813,071,084.00 353,509,167 43.48%
78 Murree Brewery Company Limited 19,052,087.00 8,408,367 44.13%
79 Feroze1888 Mills Limited 117,587,676.00 52,914,434 45.00%
80 Media Times Limited 178,851,010.00 80,482,955 45.00%
 Free-Float KSE-100 (Actual & % of Full Cap)
Number of Outstanding
Free float shares Free Float
Serial Symbol Name Shares as on July 31st
July 31 Weightage
2012

81 Engro Corporation Limited 511,269,370.00 230,071,246 45.00%

82 Pakistan State Oil Company Limited 171,519,600.00 78,168,486 45.57%
83 Pakistan Oilfields Limited 236,545,920.00 108,009,298 45.66%
84 Pakistan Reinsurance Compnay Limited 300,000,000.00 140,932,080 46.98%
85 Bank Alfalah Limited 1,349,156,250.00 674,578,125 50.00%
86 Nishat Mills Limited 351,599,848.00 175,799,924 50.00%
87 JDW Sugar Mills Limited 59,776,661.00 29,888,331 50.00%
88 The Karachi Electric Supply Company Ltd. 2,266,215,300.00 1,141,695,184 50.38%
89 Bank AL Habib Limited 1,010,386,745.00 555,712,708 55.00%
90 EFU General Insurance Company Ltd. 125,000,000.00 68,750,000 55.00%
91 Jahangir Siddiqui & Company Limited 763,285,323.00 419,806,928 55.00%
92 D. G. Khan Cement Co. Ltd. 438,119,097.00 240,965,515 55.00%
93 Fauji Fertilizer Company Limited 1,272,238,147.00 699,731,036 55.00%
94 Pakistan Services Limited 32,524,250.00 21,140,711 65.00%
95 Adamjee Insurance Company Limited 123,704,543.00 80,407,953 65.00%
96 Pace (Pakistan) Limited 278,876,604.00 181,269,793 65.00%
97 Soneri Bank Limited 902,918,513.00 722,334,796 80.00%
98 Hub Power Company Limited 1,157,154,400.00 925,723,510 80.00%
99 PICIC Growth Fund 283,500,000.00 226,800,000 80.00%
100 TRG Pakistan Limited 385,390,665.00 327,582,065 85.00%
 12,500.00
13,000.00
13,500.00
14,000.00
14,500.00
15,000.00
29-May-12
31-May-12
2-Jun-12
4-Jun-12
6-Jun-12
8-Jun-12
10-Jun-12
12-Jun-12
14-Jun-12
16-Jun-12
18-Jun-12
20-Jun-12
22-Jun-12
24-Jun-12
26-Jun-12
28-Jun-12
30-Jun-12
2-Jul-12
Free Float index
Full M. Cap Index

4-Jul-12
6-Jul-12
8-Jul-12
10-Jul-12
12-Jul-12
14-Jul-12
16-Jul-12
18-Jul-12
KSE-100 & FF KSE-100 Parallel Run

20-Jul-12
22-Jul-12
24-Jul-12
26-Jul-12
28-Jul-12
30-Jul-12
 Comparative of Existing KSE-100 & FF KSE-100
Full Cap Free Float
Serial Company Code Symbol Name
Weightage Weightage

1 OGDC Oil & Gas Development Company Limited 21.11% 12.86%

2 PPL Pakistan Petroleum Limited 7.55% 6.50%
3 NESTLE Nestle Pakistan Limited 5.45% 1.13%
4 MCB MCB Bank Limited 5.07% 8.41%
5 FFC Fauji Fertilizer Company Limited 4.40% 10.04%
6 HBL Habib Bank Limited 4.05% 1.68%
7 UBL United Bank Limited 3.18% 3.29%
8 ULEVER UniLever Pakistan Limited 3.02% 2.64%
9 POL Pakistan Oilfields Limited 2.72% 5.16%
10 NBP National Bank of Pakistan Limited 2.53% 2.48%
11 ABL Allied Bank Limited 1.96% 0.81%
12 EFOODS Engro Foods Limited 1.57% 0.68%
13 PTC Pakistan Telecommunication Co. Ltd. 1.55% 1.00%
14 FATIMA Fatima Fertilizer Company Limited 1.52% 0.90%
15 HUBC Hub Power Company Limited 1.47% 4.88%
16 ENGRO Engro Corporation Limited 1.41% 2.62%
17 SCBPL Standard Chartered Bank (Pakistan) Limited 1.35% 0.28%
18 COLG Colgate Palmolive (Pak) Limited 1.27% 0.26%
 Comparative of Existing KSE-100 & FF KSE-100
Full Cap Free Float
Serial Company Code Symbol Name
Weightage Weightage

19 PSO Pakistan State Oil Company Limited 1.24% 2.34%

20 LUCK Lucky Cement Limited 1.18% 1.96%
21 KAPCO Kot Addu Power Company Limited 1.16% 0.96%
22 FFBL Fauji Fertilizer Bin Qasim Limited 1.04% 1.51%
23 APL Attock Petroleum Limited 0.98% 0.81%
24 RMPL Rafhan Maize Products Ltd. 0.95% 0.17%
25 BAHL Bank AL Habib Limited 0.89% 2.03%
26 MEBL Meezan Bank Limited 0.82% 0.34%
27 BAFL Bank Alfalah Limited 0.74% 1.54%
28 NIB NIB Bank Limited 0.70% 0.43%
29 GLAXO GlaxoSmithKline Pakistan Limited 0.60% 0.35%
30 DGKC D. G. Khan Cement Co. Ltd. 0.59% 1.35%
31 INDU Indus Motor Company Limited 0.59% 0.61%
32 MTL Millat Tractors Limited 0.55% 0.92%
33 HMB Habib Metropolitan Bank Limited 0.55% 0.91%
34 NRL National Refinery Limited 0.55% 0.72%
35 NML Nishat Mills Limited 0.55% 1.13%
36 UPFL Unilever Pakistan Foods Limited 0.54% 0.03%
 Comparative of Existing KSE-100 & FF KSE-100
Full Cap Free Float
Serial Company Code Symbol Name
Weightage Weightage

37 SSGC Sui Southern Gas Company Ltd. 0.52% 0.43%

38 PICT Pakistan International Container Terminal 0.49% 0.41%
39 ABOT Abbott Laboratories (Pakistan) Limited 0.48% 0.39%
40 ICI ICI Pakistan Limited 0.47% 0.66%
41 IBFL Ibrahim Fibres Limited 0.47% 0.10%
42 BWCL Bestway Cement Limited 0.44% 0.13%
43 DREL Dreamworld Limited 0.41% 0.00%
44 DAWH Dawood Hercules Corporation Limited 0.41% 0.51%
45 AHCL Arif Habib Corporation Limited 0.40% 0.41%
46 PAKT Pakistan Tobacco Company Limited 0.39% 0.08%
47 AKBL Askari Bank Limited 0.37% 0.67%
48 JSCL Jahangir Siddiqui & Company Limited 0.34% 0.78%
49 LOTPTA Lotte Pakistan PTA Limited 0.33% 0.34%
50 SNGP Sui Northern Gas Pipelines Limited 0.32% 0.33%
51 ATRL Attock Refinery Limited 0.31% 0.45%
52 SHEL Shell Pakistan Limited 0.31% 0.20%
53 ATLH Atlas Honda Limited 0.29% 0.11%
 Comparative of Existing KSE-100 & FF KSE-100
Full Cap Free Float
Serial Company Code Symbol Name
Weightage Weightage

54 EFUG EFU General Insurance Company Ltd. 0.28% 0.64%

55 AGTL Al-Ghazi Tractors Limited 0.27% 0.07%
56 THALL Thal Limited 0.26% 0.33%
57 TSML Tandlianwala Sugar Mills Limited 0.26% 0.05%
58 FABL Faysal Bank Limited 0.26% 0.38%
59 PMPK Philip Morris (Pakistan) Limited 0.26% 0.05%
60 KESC The Karachi Electric Supply Company Ltd. 0.26% 0.54%
61 MARI Mari Gas Company Ltd. 0.25% 0.21%
62 PKGS Packages Limited 0.25% 0.37%
63 BYCO Byco Petroleum Pakistan Limited 0.24% 0.15%
64 FCCL Fauji Cement Company Limited 0.24% 0.30%
65 PSMC Pak Suzuki Motor Company Limited 0.24% 0.26%
66 ACPL Attock Cement Pakistan Limited 0.24% 0.20%
67 AICL Adamjee Insurance Company Limited 0.23% 0.62%
68 SNBL Soneri Bank Limited 0.22% 0.74%
69 IDYM Indus Dyeing & Manufacturing Co. Limited 0.21% 0.09%
70 IGIIL IGI Insurance Limited 0.21% 0.30%
71 CPL Clariant Pakistan Limited 0.20% 0.18%
 Comparative of Existing KSE-100 & FF KSE-100
Full Cap Free Float
Serial Company Code Symbol Name
Weightage Weightage

72 JGICL Jubilee General Insurance Co. Limited 0.20% 0.17%

73 EWIC East West Insurance Company Limited 0.20% 0.08%
74 PIAA Pakistan International Airline Corporation 0.19% 0.05%
75 EFUL EFU Life Assurance Limited 0.18% 0.19%
76 EPCL Engro Polymer & Chemicals Limited 0.18% 0.13%
77 JDWS JDW Sugar Mills Limited 0.18% 0.37%
78 TRIPF Tri-Pack Films Limited 0.18% 0.22%
79 SIEM Siemens (Pak) Enginnering Co. Ltd. 0.17% 0.24%
80 NCPL Nishat Chunian Power Limited 0.17% 0.28%
81 SILK Silkbank Limited 0.17% 0.14%
82 PAKRI Pakistan Reinsurance Compnay Limited 0.17% 0.32%
83 GHGL Ghani Glass Limited 0.16% 0.23%
84 NPL Nishat Power Limited 0.16% 0.26%
85 BATA Bata Pakistan Limited 0.15% 0.22%
86 AGL Agritech Limited 0.15% 0.12%
87 ISL International Steels Limited 0.15% 0.15%
88 PSEL Pakistan Services Limited 0.14% 0.39%
89 FML Feroze1888 Mills Limited 0.12% 0.23%
 Comparative of Existing KSE-100 & FF KSE-100
Full Cap Free Float
Serial Company Code Symbol Name
Weightage Weightage

90 PGF PICIC Growth Fund 0.11% 0.37%

91 MUREB Murree Brewery Company Limited 0.07% 0.13%

92 SEPL Security Papers Limited 0.06% 0.10%

93 SHFA Shifa International Hospitals Limited 0.05% 0.05%

94 TRG TRG Pakistan Limited 0.04% 0.14%

95 PCAL Pakistan Cables Limtied 0.04% 0.04%

96 NETSOL NetSol Technologies Limited 0.04% 0.06%

97 MDTL Media Times Limited 0.02% 0.04%

98 PACE Pace (Pakistan) Limited 0.02% 0.04%

99 GRAYS Grays of Cambridge Pakistan Limited 0.01% 0.00%

100 PTEC Pakistan Telephone Cables Limited 0.00% 0.00%

Thank you!