KARACHI STOCK EXCHANGE

Features, Functions and Operations

KARACHI STOCK EXCHANGE

GROUP MEMBERS:
SAAD KHALID
KUMAIL SAIF
UDDIN
GHULAM ABBAS
QAMBER ABBAS
BHARAT KUMAR

STOCK EXCHANGE

Stock exchange is a highly organized

market where securities are purchased
and sold.

Provides facilities for stock brokers and

traders to trade company stocks and
other securities.

KARACHI STOCK EXCHANGE

The biggest and most liquid exchange in

Pakistan

HISTORY

Incorporated on March 10, 1949.

The first index was the KSE 50 Index.

Declared as the Best Performing Stock

Market of the World for the year 2002.

KARACHI STOCK EXCHANGE

VISION

To be a leading financial institution offering efficient,

fair and transparent securities market in the region
and enjoying full confidence of the investors.

NATURE OF KSE

Although initially the Karachi Stock Exchange was

aphysical exchangewhere trading took place by
anopen outcry system, now the Karachi Stock
Exchange isfully automated.

FUNCTIONS OF KSE

Established for the purpose of assisting, regulating and

controlling business of buying, selling and dealing in
securities.

Provides a market for the trading of securities to individuals

and organizations seeking to invest their saving or excess
funds through the purchase of securities.

Provides a physical location for buying and selling securities

that have been listed for trading on that exchange.

Establishes rules for fair trading practices and regulates the

trading activities of its members according to those rules.

The exchange itself does not buy or sell the securities, nor
does it set prices for them.

PRODUCTS OF KSE
KSE TRADING PRODUCTS

READY MARKET (EQUITIES)

where buyers and sellers come together to trade shares.

CASH SETTLED FUTURES

A standardized contract, to buy or sell a certain underlying
instrument at a certain date in the future at specified price.

STOCK INDEX FUTURES

Stock Index Futures are traded in a number of contracts.

DELIVERABLE FUTURES
Forward contracts to buy or sell a certain underlying
Instrument with actual delivery of the underlying instrument
occurring

PRODUCTS OF KSE
KSE new Products in the year 20092010

Trading based on Sector indices

Exchange Traded Funds
Bond Trading
Options

ALSO OFFERS

Technology services by KSE I.T. help desk.

Customer Services & Investor Relations
Services to help resolve investor complaints
and queries.
Investor Education Programs.

HOW TO BECOME A
MEMBER?
Criteria for individual membership

No person shall be eligible to be admitted as

Member, if..

The applicant should be an income tax or wealth

tax assesses or borne as an assesses on the
register of income tax/wealth tax.

The minimum qualification for an applicant for the

Membership shall be "Graduation".

The applicant should have sufficient knowledge of

stock market business.

Reference from a scheduled bank in addition to

other references as disclosed in the Membership
form.

HOW TO BECOME A
MEMBER?
Criteria for corporate membership

must be a company or a statuary corporation or a body corporate

Have a minimum issued and paid-up capital of Rs. 20 million.

NO objection from the Federal or Provincial Government.

The Nominee Director representing Corporate Membership must

be a citizen of Pakistan.

The membership application shall be accompanied by an auditors

certificate.

At least 3 years stock market experience.

No Objection Certificates from State Bank of Pakistan and

Ministry of Finance; is to be furnished

SETTLEMENT OF
TRANSACTION
The settlement in the Karachi Stock Exchange takes
place through the centralized clearing house.

TRADING
The exchange has

Pre-market sessions from 09:15am to 09:30am.

Normal trading sessions from 09:30am to

03:30pm.

ROLE OF KSE IN ECONOMY

The KSE is one of Pakistans largest tax

payer and in the fiscal year 2006- 2007
contributed over Rs. 4 billion towards
the national exchequer.

Listed Companies contribute over 10%

of total revenue collected by the
Government of Pakistan.

KSE brokers on average pay more than

50% of their profit before tax as
presumptive tax.

KSE investors pay 10% tax on

KSE PLANS FOR FUTURE

The following are in process

Demutualization of the Exchange

publically listed with strategic investor

Promotion of Derivative Products

New Services

Debt Market Trading Platform

Investors education programs

HOW DOES AN INVESTOR

TRADE AT KSE?
Requirements
Individuals

A copy of the civil identification card.

fill out the account opening form, sign it, and then get it certified
by your bank.
A fee
Choose one of the registered Brokerage Firms in KSE.

Corporate

Clients

A copy of the civil identification card.

fill out the account opening form, sign it, and then get it certified
by your bank.
A fee
Copy of Commercial Registration record
Copy of Company's license
A List of authorized signatory certified by the bank.
Choose one of the registered Brokerage Firms in KSE.

HOW TO START TRADING?

When issuing a selling order, share certificates should

be presented the following day after the transaction.

When issuing a buying order, payment should be

submitted to the broker the following day before 11:00
am .

Commission is calculated for transaction of 50 Thousand

KD and above.

A cheque will be issued by KSE in favor of the client .

KSE account is accredited 500 fils for each executed

transaction.

Share prices can fluctuate 5 pricing units daily according

to its category.

NCCPL AND CDC

NCCPL

National Clearing Company of Pakistan Limited

(NCCPL) is a significant institution of Pakistan's
Capital Market providing clearing and settelment
services to all three stock exchanges in the
country.

CDC

Incorporated as a public limited (Unlisted)

companyin 1993, CentralDepositoryCompany of
Pakistan Limited (CDC) is the onlydepositoryin
Pakistan. The Company started operations in
September 1997.

LEGAL AUTHORITY

Legal Framework

The securities market and the corporate

sector are regulated by the provisions
of the Companies Ordinance 1984.

The Securities and Exchange Ordinance

1969 and Rules framed there under in
1971.

There are also Federal legislations

relating to specific areas like

SECURITY AND EXCHANGE

COMMISSION OF PAKISTAN

Established in 1997
The Role of SECP in Pakistan

Regulating the issue of Securities

Regulating the business in Stock Exchange
and Other securities markets
Monitoring the Capital Markets
Registering
Prohibiting Fraudulent and Unfair Trade
Practices
Promoting Investors Education and Training
Calling for Information and Undertaking
Inspection
Suggesting Reforms of Law
Encouraging the Development
Regulating the Insurance Business
Maintaining the Investors confidence
Disclosure of Information to the Public
Settlement of Disputes

KSE INDICES

50 Shares Index

KSE-100

The KSE-100 is a benchmark used to compare prices over a

period of time. The KSE-100 is a capital weighted index
comprised of 100 companies.

KSE-30

This index was used initially but as the market grew there
was a need for a new index

This index was introduced at the end of 2006

KMI-30

KMI comprises of 30 Companies that quality the KMI Shariah

screening criteria and are weighted by float adjusted market
capitalization.