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    Analysis of Pkaistani Stock Exchange

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    Rohail Khan Niazi
    The document provides an analysis of the Pakistan Stock Exchange (PSX). It discusses the history and methodology used in the analysis. Some key points: - PSX was founded in 1947 as the Karachi Stock Exchange and was rebranded in 2016 after merging with other exchanges. - PSX has performed very well historically, delivering average annual returns of 26% and being ranked one of the best performing exchanges globally in some years. - The exchange has over 500 listed companies and over 22,000 registered investors. Market capitalization is over $98 billion. - A goal of merging the exchanges was to provide investors with increased liquidity and a unified market.

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    Analysis of Pkaistani Stock Exchange

    Uploaded by

    Rohail Khan Niazi
    43 views26 pages
    The document provides an analysis of the Pakistan Stock Exchange (PSX). It discusses the history and methodology used in the analysis. Some key points: - PSX was founded in 1947 as the Karachi Stock Exchange and was rebranded in 2016 after merging with other exchanges. - PSX has performed very well historically, delivering average annual returns of 26% and being ranked one of the best performing exchanges globally in some years. - The exchange has over 500 listed companies and over 22,000 registered investors. Market capitalization is over $98 billion. - A goal of merging the exchanges was to provide investors with increased liquidity and a unified market.

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    analysis of Pkaistani Stock Exchange

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    The document provides an analysis of the Pakistan Stock Exchange (PSX). It discusses the history and methodology used in the analysis. Some key points: - PSX was founded in 1947 as the Karachi Stock Exchange and was rebranded in 2016 after merging with other exchanges. - PSX has performed very well historically, delivering average annual returns of 26% and being ranked one of the best performing exchanges globally in some years. - The exchange has over 500 listed companies and over 22,000 registered investors. Market capitalization is over $98 billion. - A goal of merging the exchanges was to provide investors with increased liquidity and a unified market.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    43 views26 pages

    Analysis of Pkaistani Stock Exchange

    Uploaded by

    Rohail Khan Niazi
    The document provides an analysis of the Pakistan Stock Exchange (PSX). It discusses the history and methodology used in the analysis. Some key points: - PSX was founded in 1947 as the Karachi Stock Exchange and was rebranded in 2016 after merging with other exchanges. - PSX has performed very well historically, delivering average annual returns of 26% and being ranked one of the best performing exchanges globally in some years. - The exchange has over 500 listed companies and over 22,000 registered investors. Market capitalization is over $98 billion. - A goal of merging the exchanges was to provide investors with increased liquidity and a unified market.

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    You are on page 1of 26

    ANALYSIS OF PAKISTAN

    STOCK EXCHANGE
    METHODOLOGY
    Source of information

    PSX website
    Financial Statements of PSX
    Websites: Investopedia, Bloomberg, The Economist,
    The Dawn News, The Express Tribune
    Secondary Data
    Reports
    Research Articles
    Television News
    Effect of creating Pakistan
    Stock Exchange
    Founded on 18 September 1947 under the name of KSE.
    According to Bloomberg, the Pakistani benchmark stock market
    index is the third-best performer in the world since 2009 till 2014.
    The Pakistan Stock Exchange (PSX) came into inception in
    January 2016.
    Pakistan Stock Exchange is listed as world best stock market in
    terms of performance in year 2009 and 2015
    It delivers 26% average return per year.
    561 companies registered.
    Foreign Investors: 1886, Domestic investors: 883, and Retail
    investors: 22000.
    Market Capital is US$ 98 billion.
    Effect of creating Pakistan Stock Exchange
    Demutualization Act" 2012 was formulated by the Government
    of Pakistan.
    Liquidity
    The idea was discussed from last 15 years.
    Replication of same structure.
    Investor need quick liquidity, quick trade, and quick execution.
    Foreign investor doesnt have to look at different stock
    exchanges.
    Low-cost from merging. (annual listing fee, regulatory
    requirements.)
    Investor base.
    Economy should be represented by stock exchange.
    Taxation
    By the end of year 2016 PSX have provides 46% return.
    Pakistan economy grew by 4.7% in FY16 compared to last three-
    year average growth of 3.9%.
    PSX sold 40% strategic shares to a Chinese consortium for $85
    million.
    PERFORMANCE OF SECTORS
    Outperformed Sectors
    AUTOMOBILE
    PHARMACEUTICALS
    CEMENT
    FERTILIZERS
    Determinants of performance
    Effect of interest rate:
    Rising interest rates affect both consumers and firms

    As a result there will be lower economic growth.


    Capitalization to GDP
    It is a ratio which is used to determine that a stock market is
    over-valued or under-valued

    It measures the % of GDP represented by stock market


    capitalization
    Trade to GDP ratio
    An indicator of the relative importance of international trade in
    the economy of a country.

    It is the sum of exports and imports divided by the gross


    domestic product.
    Technology development in Stock Exchange Market
    2013 2015& 2016

    KITS
    Kaizen Program Merged platform

    BATS
    Homegrown Risk meter
    New Data
    PUCARS
    center
    Internet trading & cloud
    Derivative
    computing
    system

    2014 2017
    WHATS LACKING ?

    Awareness
    13.4 trillion
    3.9 million
    New York
    Stock exchange
    Nasdaq

    Tokyo stock London stock


    exchange
    exchange
    3.8 trillion 3.6 trillion
    DISTRIBUTED
    LEDGER
    TECHNOLOGY
    Inherent Flaws in Index Construction
    Measure of representing the value of a group of stocks

    Price-weighted Index
    Capital-weighted Index
    Equal-weighted Index
    Inherent Flaws in Index construction
    KSE-100 Index

    1991
    Benchmark to compare prices
    Capital-weighted Index
    Cont..
    Concentrated towards few large stocks
    Large companies
    External factors effecting the index
    Major Effects
    Holiday effect

    Average returns higher preceding the holidays

    Globally: Ariel (1990);Kim & Park (1994);Boyle et al.


    PSX: Zafar et al. (2012)
    Cont..
    January Effect
    Higher stock prices in the month of January

    Globally: Gultekin (1983); Tininc & West(1984)

    PSX: Iqbal et al. (2013) Shahid and Mehmood (2015)

    Small firm effect


    THANK YOU
    QUESTIONS?

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