1. You might be asking yourself why do even people need stock
exchange. Or why do they even exist?
2. Answer To This Question Lies In The Following Four Key Points
Price Transparency
Anonymity
Guarantee + Settlement
Regulations
3. Price transparency
Price transparency is the ability to know all of the
bid prices, ask prices, and trading quantities for a
given stock, good, or service at any point in time.
4. Anonymity
The Stock Exchange provide its client the anonymity
means the ability to trade without letting other know who
you are.
5. Guarantee + Settlement
The Guarantee means if you by shares through Stock
Exchange then the deal will be honored by both Seller and
Buyer.
Settlement means that the Shares are legally registered with
the exchange.
6. Regulations
Since the trade moved out of the coffee houses or restaurants
to stock Exchanges which were informal and very risky, then
certain rules and regulation also came in. The purpose of
which was to carry fair trades and in the fastest way possible.
7. Stock Market Indices
Stock Market Indices provides a useful way to
get broad information on how the overall
market is doing. Increase in them represents
increase in the overall market.
8. There Are Various Market Indexes But As We Live In Pakistan So We
Will Specifically Study Only Them.
Karachi Stock Exchange
Lahore Stock Exchange
Islamabad Stock Exchange
9. So The Stock Market Indices Used In Karachi Stock Exchange Are
As Under…
KSE-100
KSE-30
KSE- ALL SHARE
KMI-30
BK TI
OG TI
10. KSE-100
Comprises the top company from each of the 34 sectors on the KSE
It represents over 85% of the market capitalization of the
Exchange
Calculation is done by taking equity’s price and
multiplying it by all the shares of company
11. KSE-30
Introduced in 2006
Includes only the top 30 most liquid companies
Based on “Free Float Methodology
In Free Float Methodology we multiply equity price with
only the numbers of share readily available in the market
12. KSE-ALL SHARES
The Karachi Stock Exchange All-Share index is a market
capitalization weighted index comprising all listed stocks on
the Karachi Stock Exchange.
