How many Industries in Pakistan Economy? How many Companies in Pakistan Stock Exchange? How many Indexes are in Pakistan Stock Exchange? How are Index Calculated?

1. JINNAH UNIVERSITY FOR WOMEN
DEPARTMENT OF COMMERCE
TOPICS
• How many Industries in Pakistan Economy?
• How many Companies in Pakistan Stock Exchange?
• How many Indexes are in Pakistan Stock Exchange?
• How are Index Calculated?
GROUP MEMBERS
Mahnoor Nadeem (BS-Com)
Iqra Afshan (M. Com)
Wajiha Muhammad Ismail (BS-Com)
SEMESTER/YEAR
7th
Semester/ 4th
Year
SUBJECT
Investment and Portfolio Management
(FIN 4051 – MCOM 637)
SUBMISSION DATE
SUBMITTED TO
SIR. SAJID

2. Contents
Pakistan Industries........................................................................................................................................5
Textile Industry .........................................................................................................................................5
Agriculture Industry ..................................................................................................................................6
Automotive Industry.................................................................................................................................6
Chemical Industry .....................................................................................................................................7
Mining Industry.........................................................................................................................................7
Leather Industry........................................................................................................................................8
Services Industry.......................................................................................................................................8
Pharmaceutical Industry...........................................................................................................................9
PSX ..............................................................................................................................................................11
Objective.................................................................................................................................................11
Pattern of Shareholding..........................................................................................................................11
Index............................................................................................................................................................13
KSE 100....................................................................................................................................................14
KSE 30......................................................................................................................................................15
All Share Index ........................................................................................................................................15
NITPG Index.............................................................................................................................................15
UPP9 Index..............................................................................................................................................15
MZNPI Index............................................................................................................................................15
NBPPGI Index ..........................................................................................................................................15
JSMF Index ..............................................................................................................................................15
ACIETF Index ...........................................................................................................................................16
KMI 30 Index ...........................................................................................................................................16
PSX-KMI All Share Index..........................................................................................................................16
Three Main Indexes Operated in Pakistan Stock Exchange........................................................................18
How to Calculate Index? ............................................................................................................................18
Free Float Capitalization .........................................................................................................................18
What is Free Float Market Capitalization?..............................................................................................18
Market Capitalization of a Company ......................................................................................................18
Difference between Market Capitalization and Free Float?...................................................................19

3. How does free float methodology help in Index calculation?................................................................19
KSE 100....................................................................................................................................................19
KSE 30......................................................................................................................................................19
KMI 30.....................................................................................................................................................19
REFERENCES................................................................................................................................................21

4. Number of
Industries in
Pakistan Economy

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Pakistan Industries
At the time of independence, Pakistan inherited only 34 industrial units out of 921 industrial
units in the subcontinent. They were cotton textile, cigarettes, sugar, rice husking, cotton ginning
and flour milling industries; and together they contributed only 7% of GDP and employed a little
over 26,000 employees.
Today’s the economy of Pakistan is 22nd largest economy in terms of Purchasing Power Parity.
Over the years Pakistan’s Industries flourished. From producing only 7% of GDP, are now
contributing to 64% of GDP. Major industries include Cotton textile industry, agriculture,
automotive, cement, steel, tobacco, chemicals, machinery, and food processing.
Textile Industry
Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting
for about 65% of the merchandise exports and almost 45% of the employed labor force. Cotton
and cotton-based products account for 61% of export earnings of Pakistan. By 2010 the spinning
capacity increased to 15 million spindles and textile exports hit $15.5 billion.
Pakistan is the 8th largest exporter of textile commodities in Asia. Textile sector contributes
8.5% to the GDP of Pakistan. Pakistan is the 4th largest producer of cotton with the third largest
spinning capacity in Asia after China and India and contributes 5% to the global spinning
capacity. At present, there are 1,221 ginning units, 442 spinning units, 124 large spinning units
and 425 small units which produce textile.
Exports of Textiles during Jul-Nov 19-20 totaled $6,044,536 (Provisional) as against US
$5,763,117 during the corresponding period of last year showing an Increase of 4.88 %, rating
the textile industry as the top exporter industry for the year 2020.
Cotton is the largest segment of textile production. Other fibers produced include synthetic fiber,
filament yarn, art silk, wool, and jute. Cotton spinning is the most important segment in the
Pakistan textile industry with more than 521 units installed and operational.
A huge focus of the textile industry is on skill development and training programs. Institutes
such as TIP, PRGTII, SMARTI, PHMA Institute of knitwear and technology, PIFD , PHMA

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Institute of knitwear and technology, PIFD and many more play a vital role in promoting such
skills and as well as providing skill labor to the Textile Industry.
Agriculture Industry
Agriculture constitutes the largest sector of our economy. Majority of the population, directly or
indirectly, dependent on this sector. It contributes about 19.3% of Gross Domestic Product
(GDP), with a growth rate of 2.67% from last year, and accounts for half of employed labor force
and is the largest source of foreign exchange earnings. It feeds whole rural and urban population.
Realizing its importance, planners and policy makers are always keen to have reliable area and
production statistics of agricultural crops well in time.
Major crops are wheat, cotton, rice, sugarcane, maize etc. However, in recent years, due to
persistent hikes in the prices of essential commodities like pulses, onions, potatoes, chilies and
tomatoes these crops have also gained in economic importance. This sector is also the largest raw
material provider to many industries. The most populated province of Punjab provides the largest
share in national agricultural production.
The export of rice in 2020 totaled $2.1 billion, making it the second largest exporter industry in
2020.
Automotive Industry
The automotive industry in Pakistan is the one of the fastest-growing industries of the country,
accounting for 4% of Pakistan's GDP and employing a workforce of over 1.8 million people.
Currently, there are more than 3,200 automotive manufacturing plants in the country, with an
investment of US$570 million producing more than 1.8 million motorcycles and 200,000
vehicles annually. Its contribution to the national exchequer is US $310 million. The sector
provides employment to more than 3.5 million people and plays a pivotal role in promoting the
growth of the vendor industry. Pakistan's auto market considered one of the fastest-growing
automotive industry in Asia. Over 180,000 cars sold in the fiscal year 2014–15, rising to 206,777
units fiscal year 2015–16.
At present, Honda, Toyota, Suzuki, and KIA dominate the auto market. As a result of "Auto
Policy 2016-21", which offers tax incentives to new automakers to establish manufacturing

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plants in the country, Renault, Nissan, Proton Holdings, Kia, SsangYong, Volkswagen, FAW
and Hyundai have expressed interest in entering the Pakistani market. MG JW Automobile
Pakistan signed Memorandum of Understanding with Morris Garages (MG) Motor UK Limited,
owned by SAIC Motor to bring electric vehicles in Pakistan. NLC signed an agreement with
Mercedes Benz for the manufacturing of Mercedes Actros trucks in Pakistan. Pakistan has not
enforced any automotive safety standards or model upgrade policies. A few old models of
vehicles including the Bolan and Ravi continue to be sold by Suzuki.
Chemical Industry
The global chemical industry forms the fabric of the modern world. It converts basic raw
materials into more than 70,000 distinct products, not only for industry, but also for all the
consumer goods that people rely on in their daily life. Apart from this the chemical sector
contributes to several other fields like agriculture, pharmaceuticals, textile, power, environment,
communications, transport, infrastructure, housing, as well as covers thousands of commercial
products like paper, paint, plastic products, soap/detergents, perfumes/fragrances, varnishes,
pharmaceutical, dyes etc.
Pakistan is blessed with a diverse and vibrant chemical industry having the potential to become a
regional/global player.
Pakistan Chemical industry provide for many other industries including Textiles industry,
Agriculture industry, Food & Beverages, Leather industry, Paper industry, pharmaceutical
industry, Plastics, Printing, Sugar, and many others.
Mining Industry
Mining is an important industry in Pakistan. Pakistan has deposits of several minerals including
coal, copper, gold, chromite, mineral salt, bauxite, and several other minerals. There are also a
variety of precious and semi-precious minerals that are also mined. These include peridot,
aquamarine, topaz, ruby, emerald, rare-earth minerals bastnaesite and xenotime, sphene,
tourmaline, and many varieties and types of quartz.
The Pakistan Mineral Development Corporation is the responsible authority for the support and
development of the mining industry. The Gemstones Corporation of Pakistan looks after the

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interests of stake holders in gemstone mining and polishing as an official entity. Balochistan has
the most mineral deposits among the provinces of Pakistan, with Sindh rich in coal deposit and
Khyber Pakhtunkhwa rich in gems. Oil, gas, and minerals used in nuclear energy purposes are
mined by the federal government. The mining of other minerals is a provincial concern.
Currently around 52 minerals are mined and processed in Pakistan.
Leather Industry
Pakistan have been the hub of producing high quality Leather and Leather Products, and there
are more than 800 Tanneries in the country actively engaged in producing best quality finished
leather of Cow, Buffalo, Sheep and Goat skins.
Pakistan is rich in agricultural products and has a large livestock population which plays a
significant role in the economy of Pakistan by producing around 13.0 million Hides and 47.4
million Skins per annum (2015-16). The quality of goat skins, cow, buffalo hides in Pakistan is
satisfactory. The type of sheep skins we have in Pakistan is better in respect of grain, substance,
and compactness of fibers. Leather manufacturers & exporters are determined to increase export
of quality finished leather and leather products.
Pakistan exported leather worth $190.856 million during July-October (2020) against the exports
of $181.338 million during July-October (2019-20), showing the growth of 5.25 per cent,
according to the Pakistan Bureau of Statistics (PBS).
The industry is playing their positive role in activating WTO with quality consciousness and full
sense of responsibilities to uphold the perfect image of Leather Industry of Pakistan. As being
the most significant contributor or the country’s GDP and foreign exchange earnings. The
Leather Industry of Pakistan is employing more than 500,000 peoples directly and indirectly.
(2009-2010)
Services Industry
The services sector has provided steady support to Pakistan’s economic growth. It shares in GDP
now stands a more than 50 percent. The growth rate of services sector is higher than the growth
rate of agriculture and industrial sector. Services sector accounts for over one-third of total

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employment. Services sector has strong linkages with other sectors of economy; it provides
essential inputs to agriculture sector and manufacturing sector.
The main sectors are construction, computer and software development, engineering services,
professional services (marketing, audit/accounts, taxation and legal etc.), banking, insurance,
communication, tourism, and business services.
Pharmaceutical Industry
There are approximately 759 companies operating in the Pakistani Pharmaceutical market, out of
which less than 30 are multinational companies. The Pharmaceutical industry contributes
approximately 1% to the GDP of Pakistan annually.
Currently Pharmaceutical industry in fulfilling more than 95% of the domestic pharmaceutical
requirements. Pakistan exports of pharmaceutical products was US$235.75 Million during 2020,
according to the United Nations COMTRADE database on international trade.
Pakistan’s pharmaceutical exports rose around 23% year-on-year to $68.1 million during the first
quarter of the current fiscal year of 2020/21.

10. Number of
Companies in
Pakistan Stock
Exchange

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PSX
PSX has made significant strides in its history, having a small presence of 5 listed companies
initially with a total paid-up capital of Rs 37 Mn. In 1960 there were 81 companies with a market
capitalization of Rs 1.8 Bn whereas now there are 531* (+2 GEM Board) companies listed on the
bourse with a market capitalization of Rs 7.68 trillion*. The listed companies are distributed
amongst 36 sectors/ groups of industries.
*As of Dec 31, 2021
Vision
A world class exchange for Pakistan.
Mission
PSX contributes to the economic development of Pakistan by providing a fair, transparent, and
efficient marketplace to facilitate capital formation for the benefit of investors, issuers, and all
stakeholders.
Objective
The objective of PSX is to provide a safe, reliable, efficient, and consistent marketplace where
investors can buy and sell common stock of listed companies and other securities. For over 60
years, the Exchange has facilitated capital formation, serving a wide spectrum of participants,
including individual and institutional investors, the trading community, and listed companies.
Pattern of Shareholding
PSX constitutes of 40% shareholding by a consortium of Chinese investors (Shanghai Stock
Exchange, Shenzhen Stock Exchange, & China Financial Futures Exchange), and 60% by public,
which includes initial shareholders, local and foreign investors.

12. Number of Indexes
in Pakistan Stock
Exchange

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Index
An index is an indicator or measure of something. In finance, it typically refers to a statistical
measure of change in a securities market. In the case of financial markets, stock and bond market
indexes consist of a hypothetical portfolio of securities representing a particular market or a
segment of it.
PSX aims to reclaim that status and has plans in place to make it a robust and efficient Stock
Exchange at par or above par with other Stock Exchanges in the world. It is at the forefront of
Pakistan’s economy, being the only major institution helping capital formation in the country.
Pakistan Stock Exchange has in place functional and operational capabilities at par with any
global Stock Exchange with robust trading systems (e.g.: KATS-Karachi Automated Trading
System, KITS-Internet based order routing system, BATS-Bonds Automated Trading System),
IT security systems, and a progressive regulatory framework. Currently, 11 indices are listed on
PSX as follows:

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KSE 100
This is the most recognized index of PSX which includes the largest companies based on market
capitalization. KSE 100 Index stocks has a representation of all the market sectors of PSX. The
Index represents 85% of all the market capitalization of the Exchange. It is calculated using Free
Float Market Capitalization methodology.
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. In particular, the KSE 100 is designed to provide
investors with a sense of how the Pakistan equity market is performing. Thus, the KSE 100 is
like other indicators that track various sectors of the Pakistan economic activity such as the gross
national product, consumer price index, etc.
List of prominent sectors of Pakistan economy are as follows:

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KSE 30
KSE 30 Index includes the top 30 most liquid companies listed on PSX based on Free Float
methodology.
The primary objective of the KSE-30 Index is to have a benchmark by which the stock price
performance can be compared to over a period. In particular, the KSE-30 Index is designed to
provide investors with a sense of how large company’s scrips of the Pakistan’s equity market are
performing. Thus, the KSE-30 Index will be like other indicators that track various sectors of
country’s economic activity such as the gross national product, consumer price index, etc.
All Share Index
Consists of all listed companies on PSX based on Full Cap methodology.
NITPG Index
The index aims to track the performance of stocks that represent top 50% free float market
capitalization of KSE-100 index.
UPP9 Index
The Index aims to track the performance of top 9 companies with highest free float market
capitalization of KSE-100 index (excluding Oil and Gas sector companies)
MZNPI Index
The Islamic Index aims to track the performance of top 12 companies with highest average
traded value and free float market capitalization of KMI30 Index.
NBPPGI Index
The Index aims to track the performance of top 15 companies with highest free float market
capitalization of KSE-100 Index
JSMF Index
The JSMF Index aims to track the performance of stocks which define positive momentum based
upon total return performance and value traded over a 30-day time.

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ACIETF Index
Alfalah Consumer Index Exchange Traded Fund (ACIETF) is an open-end Exchange Traded
Fund which aims to track the authorized benchmark index, the Alfalah Consumer Index which
would be consumer focused comprise of a maximum 20 stocks. Top companies among pre-
defined 7 sectors that have the highest free float-based market capitalization and with a 1 year
daily average trading volume of 100,000 shares or above on index rebalancing and/or
Addition/deletion dates i.e., 30th June and 31st December of each year. Maximum weight of a
single stock in the index will be up to 10%.
KMI 30 Index
KMI 30 Index tracks the 30 most liquid Shariah compliant companies listed at PSX. The
companies are weighted by float adjusted market capitalization with a 12% cap on weights of
individual companies.
PSX-KMI All Share Index
PSX-KMI All Share Index comprises of all Shariah compliant companies listed on the Pakistan
Stock Exchange Limited. The Index was developed by Pakistan Stock Exchange Limited and
Meezan Bank Limited.

17. Main Indexes in
Pakistan Stock
Exchange and How
are Index
Calculated?

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Three Main Indexes Operated in Pakistan Stock Exchange
1. KSE 100
2. KSE 30
3. KMI 30
How to Calculate Index?
Free Float Capitalization
The free float is a measure of actual availability of stocks of a company in the market for public
investment. Free float factor is used for calculating free float market capitalization of a company.
Current share price x free float shares = market capitalization
What is Free Float Market Capitalization?
In free float market capitalization, the value of the company is calculated by excluding shares
held by the promoters. These excluded shares are the free float shares. For example, if a
company has issued 10 lakh shares of face value Rs 10, but of these, four lakh shares is owned
by the promoter, then the free float market capitalization is Rs 60 lakh.
Issued Share (1,000,000@10) 10,000,000
Less: Shares owned by promoters (400,000@10) (4,000,000)
Free Float Market Capitalization (600,000@10) 6,000,000
Market Capitalization of a Company
Market capitalization is an important parameter which many investors consider while putting
money in a company. Some investors watch free float market capitalization as it gives better
insight into the quality of the holding.
It is an outstanding number of shares of a company multiplied by its current market price. For
example, if a company has 1 lakh outstanding shares and the stock price is Rs 20, then the
market capitalization of the company is Rs 20 lakh.

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Difference between Market Capitalization and Free Float?
Market cap is based on the total value of all a company's shares of stock. Float is the number of
outstanding shares for trading by the public. The free-float method of calculating market cap
excludes locked-in shares, such as those held by company executives and governments.
How does free float methodology help in Index calculation?
PSX use the free float market capitalization method to calculate their benchmark indices
respectively and assigning weight to stocks in the index. So, a company with a higher free float
has a higher weightage on the indices. A free float index reflects market trends better as it takes
into consideration only those shares which are available for trading. It also makes the index more
broad-based as it helps to reduce the concentration of top few companies.
KSE 100
The calculation of KSE 100 Index involves dividing the free-float market capitalization of 100
companies in the Index by a number called the Index Divisor. The Divisor is the only link to the
original base period value of the KSE 100 Index.
The KSE-100 Index is a stock index acting as a benchmark to compare prices on the Pakistan
Stock Exchange (PSX) over a period. In determining representative companies to compute the
index on, companies with the highest market capitalization are selected.
KSE 30
The index is calculated by adding the stock prices of the 30 companies and then dividing by the
divisor. The divisor changes when there are stock splits or dividends or when a company added
or removed from the index.
KMI 30
The value of Islamic Index shall be arrived at by dividing the free-float market capitalization of
all eligible Islamic Securities in the Index by a number called the Index Divisor. The Divisor is
the only link to the original base period value of the KMI Index.
KSE Meezan Index (KMI–30) is a stock market index on the Pakistan Stock Exchange in
Pakistan of thirty companies that have been screened for Islamic Shariah criteria. The index was
introduced in 2009[1] and the base period for this Islamic index is 30 June 2008. It was created

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as a joint effort by the Karachi Stock Exchange (now known as Pakistan Stock Exchange)
and Al-Meezan Investment Bank (now known as Meezan Bank Limited).
The index is calculated using free float market capitalization. At any point in time, the level of
the index reflects the free float market value of selected Shariah-compliant shares in comparison
with the base period. KMI-30 recomposed semi-annually.

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REFERENCES
https://www.prgmea.org/pakistan-industry
https://www.psx.com.pk/psx/exchange/profile/about-us
https://www.psx.com.pk/psx/exchange/profile/vision-and-mission
https://www.psx.com.pk/psx/themes/psx/uploads/KSE_100_Index_New_Brochure.pdf
https://www.psx.com.pk/psx/themes/psx/uploads/KSE-30_Index_updated_version.pdf
https://www.psx.com.pk/psx/product-and-services/indices#acietf-index
https://economictimes.indiatimes.com/markets/stocks/news/free-float-market-capitalisation-
determines-index-weightage/articleshow/58178327.cms
https://en.wikipedia.org/wiki/KSE_100_Index
https://crescentwealth.com.au/islamic-finance/6-tips-on-how-to-check-a-stock-is-halal-or-haram/