KSE-100 INDEX

Azam Ahmad Abbasi Khalid Mansoor

Table of content: History of KSE100 index. Selection rules for KSE100 index. Objectives of KSE100 index. Recomposition of the KSE-100 index . Calculation methodology of KSE100 index.

000 points. 34 companies are selected i.History KSE100 index Introduced at 1st November 1999 with base value of 1. Out of the following 35 Sectors. Captures over 80% of the total market capitalization. 100 companies selected on the basis of sector representation and highest market capitalization. one company from each sector (excluding Open-End Mutual Fund Sector) .e.

LIST OF SECTORS 1. Jute 14. Sugar & Allied Industries 15. Woollen 12. Tobacco 17. Cable & Electrical Goods 25. 8. Refinery 18. Synthetic & Rayon 13. Leather & Tanneries 33. Oil & Gas Exploration Companies 21. Textile Composite 11. Glass & Ceramics 35. Paper & Board 31. Oil & Gas Marketing Companies 20. 6. Transport 26. Open-end Mutual Funds Close-end Mutual Funds Modarabas 19. Engineering 4. 9. Miscellaneous ./Securities Cos. Food & Personal Care Products Commercial Banks Insurance Textile Spinning Textile Weaving 10. Leasing Companies Investment Banks/Investment Cos. Fertilizer 28. 3. Automobile Assembler 23. Cement 16. 22. 5. Vanaspati & Allied Industries 32. Power Generation & Distribution 34. Automobile Parts & Accessories 24. Chemical 30. 7. 2. Pharmaceuticals 29. Technology & Communication 27.

Rule # 3 • Company which is on the Defaulters’ Counter and/or its trading is suspended. declare Non-Tradable (i.STOCK SELECTION RULES Rule # 1 • Largest market capitalization in each of the 34 Karachi Stock Exchange sectors excluding Open-end Mutual Fund Sector.e. NT) in preceding 6 months from the date of decomposition shall not be considered in the decomposition of KSE-100 Index. Rule # 2 • The remaining index places (in this case 66) are taken up by the largest market capitalization companies in descending order. .

consumer price index. the KSE 100 is designed to provide investors with a sense of how the Pakistan equity market is performing. the KSE100 is similar to other indicators that track various sectors of the Pakistan economic activity such as the gross national product. In particular. Thus. etc. .Objective KSE100 index 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.

CALCULATION METHODOLOGY .

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RECOMPOSITION OF THE KSE-100 INDEX Semi-annual recomposition process. Sector Rules Market Capitalization Rules • Time-based rule • Value-based rule • Time-based rule Rules for new issues .

.AN EXAMPLE OF THE RECOMPOSTION OF THE KSE100 All divisor adjustment are made after the close of trading.

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REPLACEMENT OF STOCK IN THE INDEX .