finance slides

8/8/2019 Finance Slides

1/26


2/26


3/26


4/26

Group Members


5/26

The Karachi Stock

Exchange

Empowering The

Companies of Tomorrow


6/26

What is Stock Exchange?

A stock exchange, share market is acorporation or mutual organization

which provides facilities for stockbrokers and traders, to trade companystocks and other security.


7/26

History

In 11th century France the courtiers de change wereconcerned with managingand regulatingthe debts ofagricultural communities on behalf ofthe banks. As

these menalso traded in debts, they could be called thefirst brokers.

Inthe late 13th century commoditytraders in Brugesgathered inside the house ofa man called Van der

Burse, and in 1309 they institutionalized this untilnowinformal meetingand became the "Bruges Bourse".


8/26

On May 17, 1792, twenty-four supply brokers signed theButtonwood Agreement outside 68 Wall Street in NewYork underneatha buttonwood tree.

On March 8, 1817, properties got renamed to New YorkStock & Exchange Board.Inthe 19th century,exchanges (generally famous as futures exchanges) gotsubstantiated to trade futures contracts and then

choices contracts.


9/26

Some Major Stock ExchangesTwenty Major Stock Exchanges In The World: Market

Capitalization & Year-to-date Turnover atthe end of January2009

Region Stock ExchangeMarket Value

(millions USD)

Total ShareTurnover

(millions USD)

Africa Johannesburg Securities Exchange 432,422.1 17,999.7

Americas NASDAQ 2,203,759.6 2,325,238.3

Americas So Paulo Stock Exchange 611,695.0 30,748.5

Americas Toronto Stock Exchange 997,997.4 84,323.0

Americas New York Stock Exchange 9,363,074.0 1,517,615.7

Asia-Pacific Australian Securities Exchange 587,602.7 37,400.1

Asia-Pacific Bombay Stock Exchange 613,187.6 14,425.0

Asia-Pacific Hong Kong Stock Exchange 1,237,999.5 80,696.8

Asia-Pacific Korea Exchange 470,417.3 81,755.0


10/26

Region Stock ExchangeMarket Value

(millions USD)

Total Share

Turnover(millions USD)

Asia-Pacific National Stock Exchange of India 572,566.8 39,057.1

Asia-Pacific Shanghai Stock Exchange 1,557,161.3 142,144.2

Asia-Pacific Shenzhen Stock Exchange 389,248.3 75,365.5

Asia-Pacific Tokyo Stock Exchange 2,922,616.3 301,781.5

Europe Euronext 1,862,930.9 146,173.3

EuropeFrankfurt Stock Exchange (Deutsche

Brse)937,452.9 264,970.3

Europe London Stock Exchange 1,758,157.7 241,151.1

EuropeMadrid Stock Exchange (Bolsas y

Mercados Espaoles)871,061.4 114,994.0

Europe Milan Stock Exchange (Borsa Italiana) 456,206.7 48,094.8

Europe Nordic Stock Exchange Group OMX 503,725.8 55,299.9

Europe Swiss Exchange 761,896.1 63,435.6


11/26

KSE Yesterday, Today and

TomorrowAn Overview


12/26

KSE Yesterday

Incorporated on March 10, 1949

Premier Stock exchange of the country

Started with 5 companies that had a paid up capital of Rs. 37 million

Trading was done through an open-out-cry system

The first index was the KSE 50 Index


13/26

KSE Today

Exchange owned by 200members

652 companies listed

4 indices

Electronic Trading through CATS

Market capitalization*:US $ 54.28 billion


14/26

Publicly Listed Company with

strategic investor

Broad based investorparticipation

Cross border listings ofcompanies

Opening up of branches inother cities and in the region

KSE Tomorrow


15/26

Karachi Stock Exchange

Founded in 1947, it is Pakistan's largestand oldest stockexchange, with many Pakistani as wellas overseaslistings.

Its current premises are situated on Stock ExchangeRoad, inthe heart ofKarachi's Business District.

Karachi Stock Exchange is the biggestand mostliquidexchange and has been declared as the Best PerformingStock Market ofthe World for the year 2002.

KSE has been well into the 4thyear of being one oftheBest Performing Markets ofthe world as declared bytheinternational magazine Business Week.


16/26

Growth As of December 20, 2007, 671 companies were listed withthe

market capitalization of Rs. 4364.312 billion (US$ 73 Billion)havinglisted capital of Rs. 717.3 billion (US$ 12 billion).OnDecember 26, 2007, the KSE 100 Index reached its ever highestvalue and closed at 14,814.85 points.

Foreign buying interesthad been veryactive onthe KSE in 2006and continued in 2007. Accordingto estimates from the StateBank of Pakistan, foreign investment in capital markets totalabout US$523 Million.

Accordingto a researchanalyst in Pakistan, around 20pc ofthetotal free float inKSE-30 Index is held by foreign participants.


17/26

Karachi stock exchange Board of Directors has recently(2007) announced plans to constructa 40 storyhigh rise KSEbuilding, as anew direction for future investment

KSE began witha 50 shares index. As the marketgrew arepresentative index was needed.On November 1st, 91 theKSE-100 was introduced and remains to this daythe mostgenerallyaccepted measure ofthe Exchange.

Karachi Stock Exchange 100 Index (KSE-100 Index) is abenchmark used to compare prices overtime, companies withthe highest market capitalizationare selected.


18/26

KARACH

IST

OCK

EXCHANGE

Vision

Mission1. To strive

2. To provide

3. To protect

4. To reflect


19/26

Role and Functions of

a Stock Exchange


20/26

KARACHI STOCK EXCHANGE

Evolution of the Karachi StockExchange

Arbitration Settlement

Nature of the Karachi Stock

Exchange BOARD OF DIRECTORS


21/26

KSE has 4 Indices

KSE 100 MOST WIDELY REPORTED INDEX

REPRESENTATION OF ALL SECTORS OFTHE EXCHANGE

CONSISTS OF 100 COMPANIESREPRESENTING 85% OF TOTAL MARKETCAPITALIZATION OF THE EXCHANGE

OBJECTIVE

BRIEF ABOUT KSE-100 INDEX STOCK SELECTION RULES

CALCULATION METHODOLOGY


22/26

KMI - 30

Introduced in September 2008

KMI comprises of 30 Companies that qualitythe KMI Shariah screening criteriaand areweighted by floatadjusted marketcapitalization.

Rebalancing ofthe Index will be done bi-annually.

Shariah Supervisory Board of Meezan Bankchaired by eminent Shariah scholar Justice(Retd.) Mufti Muhammad Taqi Usmani.

Eligibility Criteria Selection Criteria


23/26

MARKET TERMS

Agent

Jobbers

Bulls Bears

Holding

Margin


24/26

MARKET TERMS

Week Holder

Odd Lot

Short Selling OVERTHE COUNTER

LOCK SYSTEM


25/26

Simple Admissionand Listing Fee

Application made along with prescribed Documents and Fees toKSE;

For Fees

Initial Listing Fee:

1/10 of 1% ofthe paid-up capital (subjectto a maximum of Rs.1.5 million.

Annual Listing Fee (companies having paid-up capital of):

Upto Rs.50 mill.and above.Rs.15,000

Upto Rs.200 mill............Rs.30,000

Above Rs.200mill........Rs.60,000

Inaddition, Service Charges of Rs. 25,000 are also applicable


26/26