FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2008
KARACHI STOCK EXCHANGE
During the year 2007, the KSE witnessed its
sixth consecutive year of a bullish run.
Adnan Afridi
Managing Director
During the year 2007, the Karachi Stock
Exchange (KSE) witnessed its sixth
consecutive year of a bullish run. The KSE 100
Index increased from 10040.5 points in
January 2007 to reach an all time high record
of 14,814 points on 26 December 2007, to
finally close at 14,075 points on 31 December
2007, showing a remarkable increase of 40%
during the year. The KSE market capitalization
also increased to US$ 70.2 billion from US$
45.7 billion. During the period January-
December 2007, 14 new companies listed
their shares on the Exchange–adding over
US$ 927 million to the listed capital. The KSE
also listed 3 debt instruments of US$ 105
million. The average daily turnover of shares
also increased from US$ 261 million to US$
268 million.
The KSE has a fully automated trading system
with a sound risk management system. To
strengthen the market environment and boost
investor confidence, a T+2 settlement system
was introduced in place of T+3 settlement
system whereby all trades must be settled on
the second day after the trade.
FUTURE OUTLOOK
The KSE is determined to remain one of the
growing investment institutions not only within
the country but globally as well. The future
projects include:
• Corporatization and demutualization of the
Exchange.
• Strengthen the management capacity of the
Exchange
A VaR based margining system was
introduced in place of a slab based Risk
Management System. The new RMS included,
amongst others, a new netting regime; a
margining system based on Value at Risk
(VaR) and Capital Adequacy. The
implementation of these new risk management
measures have reduced the market’s Beta and
helped protect investors in the event of
another members inability to pay off his debts.
Unique Identification Number was introduced
to provide a traceable link between every order
entered at the trading system of the Exchange.
The UIN systems allocates each individual
client and trade a separate number such that
a record of each clients trade is stored and
can be accessed at any time. The UIN system
has significantly enhanced the risk
management at client levels and considerably
improved the Exchange’s ability to monitor the
market.
the core KSE business requirement of
exposures, profits, losses and margins to be
calculated client-wide, scrip-wide and market-
wide on the outstanding buy and sell
positions.
The KSE’s growth and improvement is
attributed to the impressive rate of growth of
the Pakistani economy, but particularly in the
banking, cement, oil & gas, fertilizer and
automobile sectors. Pakistan successfully
entered into the international capital market
through the issuance of the sovereign Euro-
Bond and floatation of GDR’s of OGDC, MCB
and UBL indicating growing foreign investor’s
confidence in the long term economic
prospects of the country.
In the coming year, the KSE plans to introduce
derivative products, develop the corporate
debt market and improve regulatory
compliance. Our efforts are also directed
towards the demutualization of the Exchange
The KSE also introduced Client Level Netting
system, this system was developed based on
• Upgrade the IT infrastructure
• Construction of new KSE Tower
• Introduction of new products and new
measures
• Cross-border listing possibilities.
CONTACT INFORMATION
Contact Name Mr. Mohammed Yacoob Memon
E-mail [email protected]
Website www.kse.com.pk
PAGE 32