Stock Exchanges of Pakistan

Stock Exchange of Pakistan
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About Stock Exchage
(A stock exchange, securities exchange or bourse is a corporation or mutual

organization which provides "trading" facilities for stock brokers and traders, to trade
stocks and other securities.)
Stock exchanges also provide facilities for the issue and redemption of securities as
well as other financial instruments and capital events including the payment of
income and dividends. The securities traded on a stock exchange include: shares
issued by companies, unit trusts and other pooled investment products and bonds. To
be able to trade a security on a certain stock exchange, it has to be listed there.
Usually there is a central location at least for recordkeeping, but trade is less and less
linked to such a physical place, as modern markets are electronic networks, which
gives them advantages of speed and cost of transactions. Trade on an exchange is by
members only. The initial offering of stocks and bonds to investors is by definition
done in the primary market and subsequent trading is done in the secondary market. A
stock exchange is often the most important component of a stock market. Supply and
demand in stock markets is driven by various factors which, as in all free markets,
affect the price of stocks (see stock valuation).
There is usually no compulsion to issue stock via the stock exchange itself, nor must
stock be subsequently traded on the exchange. Such trading is said to be off exchange
or over-the-counter. This is the usual way that bonds are traded. Increasingly, stock
exchanges are part of a global market for securities.
The First Stock Exchanges
In 11th century France the courtiers de change were concerned with managing and
regulating the debts of agricultural communities on behalf of the banks. As these men
also traded in debts, they could be called the first brokers.
Some stories suggest that the origins of the term "bourse" come from the Latin bursa
meaning a bag because, in 13th century Bruges, the sign of a purse (or perhaps three
purses), hung on the front of the house where merchants met.
House Ter Beurze in Bruges, Belgium.
However, it is more likely that in the late 13th century commodity traders in Bruges
gathered inside the house of a man called Van der Burse, and in 1309 they
institutionalized this until now informal meeting and became the "Bruges Bourse".
The idea spread quickly around Flanders and neighbouring counties and "Bourses"
soon opened in Ghent and Amsterdam.
In the middle of the 13th century, Venetian bankers began to trade in government
securities. In 1351, the Venetian Government outlawed spreading rumors intended to
The Islamia University Of Bahawalpur Rahim Yar Khan Campus

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lower the price of government funds. There were people in Pisa, Verona, Genoa and
Florence who also began trading in government securities during the 14th century.
This was only possible because these were independent city states ruled by a council
of influential citizens, not by a duke.
The Dutch later started joint stock companies, which let shareholders invest in
business ventures and get a share of their profits—or losses. In 1602, the Dutch East
India Company issued the first shares on the Amsterdam Stock Exchange. It was the
first company to issue stocks and bonds. In 1688, the trading of stocks began on a
stock exchange in London.
The role of stock exchanges
 Raising capital for businesses
 Mobilizing savings for investment
 Facilitating company growth
 Redistribution of wealth
 Corporate governance
 Creating investment opportunities for small investors
 Government capital-raising for development projects
 Barometer of the economy
Major stock exchanges
Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-
date Turnover at the end of October 2007
Total Share
Market Value
Turnover
Region Stock Exchange (trillions of US
(trillions of US
dollars)
dollars)
Africa JSE Securities Exchange $0.940 $0.349
Americas NASDAQ $4.39 $12.4
Americas São Paulo Stock Exchange $1.40 $0.476

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Americas Toronto Stock Exchange $2.29 $1.36

Americas/Europe New York Stock Exchange $20.7 $28.7
Asia-Pacific $1.453 $1.003
Australian Securities Exchange
South Asia Bombay Stock Exchange $1.61 $0.263
Asia-Pacific Hong Kong Stock Exchange $2.97 $1.70
Asia-Pacific Korea Exchange $1.26 $1.66
South Asia National Stock Exchange of $1.46 $0.564

India
Asia-Pacific Shanghai Stock Exchange $3.02 $3.56
Asia-Pacific Shenzhen Stock Exchange $0.741 $1.86
Asia-Pacific Tokyo Stock Exchange $4.63 $5.45
Europe Frankfurt Stock Exchange $2.12 $3.64

(Deutsche Börse)
Europe London Stock Exchange $4.21 $9.14
Madrid Stock Exchange

Europe $1.83 $2.49
(Bolsas y Mercados
Españoles)
Europe Milan Stock Exchange (Borsa $1.13 $1.98

Italiana)
Europe Moscow Interbank Currency $0.9652 $0.4882

Exchange (MICEX)
Europe Nordic Stock Exchange Group $1.38 $1.60

OMX1
Europe Swiss Exchange $1.33 $1.58

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Stock Exchange In Pakistan
In Pakistan there are three Stock Exchanges..
 Karachi Stock Exchange (KSE)

 Lahore Stock Exchange (LSE)
 Islamabad Stock Exchange (ISE)
1) Karachi Stock Exchange
The Karachi Stock Exchange or KSE is a stock exchange located in Karachi, Sindh,
Pakistan. Founded in 1947, it is Pakistan's largest and oldest stock exchange, with
many Pakistani as well as overseas listings. Its current premises are situated on Stock
Exchange Road, in the heart of Karachi's Business District.
Karachi Stock Exchange is the biggest and most liquid exchange and has been
declared as the “Best Performing Stock Market of the World for the year 2002”. As on
December 31, 2008, 653 companies were listed with the market capitalization of Rs.
1,858,698.90 billion (US $ 23,527.83 billion) having listed capital of Rs. 750.48
billion (US $ 9.50 billion). The KSE 100 Index closed at 5865.01 on December 31,
2008.
KSE has been well into the 4th year of being one of the Best Performing Markets of
the world as declared by the international magazine “Business Week”. Similarly the
US newspaper, USA Today, termed Karachi Stock Exchange as one of the best
performing bourses in the world.
History of KSE
The index was launched in late 1991 with a base of 1,000 points. By 2001, it had
grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It then reached a
peak of 12,285 in February 2007. KSE-100 index touched the highest ever benchmark
of 14,814 points on December 26, 2007, a day before the assassination of former
Prime Minister Benazir Bhutto, when the index nosedived.[2] The index recovered
quickly in 2008, reaching new highs near 15,500 in April. However, by November 22,
2008 during the global financial crisis of 2008 it had fallen to 9,187.
GROWTH & PROGRESS * As on December 31, 2008
Today KSE has emerged as the key institution of the capital formation in Pakistan
with:-
 Listed companies 653, securities listed on the exchange 692: ordinary share
653, Preference shares 14 and debt securities (TFC's) 25.
 Listed capital Rs.750,477.55 million (US$ 9,499.72 million).
 Market capitalization Rs.1,858,698.90 million (US$ 23,527.83 million).

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 Average daily turnover 146.55 million shares with average daily trade value
Rs.14,228.35 million (US$ 180.11 million).
 Membership strength at 200.
 Corporate Members are 187 out of which 9 are public listed companies.
 Active Members are 163.
 Fully automated trading system with T+2 settlement cycle.
 Deliveries through central depository company.
 National Clearing and Settlement System in place.
MARKET INDICES
KSE began with a 50 shares index. As the market grew a representative index was
needed. On November 1, 1991 the KSE-100 was introduced and remains to this date
the most generally accepted measure of the Exchange. The KSE-100 is a capital
weighted index and consists of 100 companies representing about 86 percent of
market capitalization of the Exchange.
In 1995 the need was felt for an all share index to reconfirm the KSE-100 and also to
provide the basis of index trading in future. On August 29, 1995 the KSE all share
index was constructed and introduced on September 18, 1995.
KSE has also introduced KSE-30 Index which is calculated using "Free Float Market
Capitalization Methodology". The primary objective of the KSE 30 Index is to have a
bench mark by which the stock price performance can be compared to over a period
of time. In particular, the KSE-30 Index is designed to provide investors with a sense
of how large company's scrip's of the Pakistan's equity market are performing.
BOARD OF DIRECTORS
The KSE is run by a Board of Directors that consists of 10 members including
Managing Director. Out of these, 5 Directors are elected from amongst 200 members
of the Exchange and 4 non-member Directors are nominated and appointed by SECP
from amongst the professionals belonging to various trades and professions. The
Chairman is elected by the Board from amongst the non-member Directors. The
operational and administrative activities of the Exchange are managed by the
Managing Director who is the full time Chief Executive of the Exchange.
Following are the members of the Board.

01 Mr. Kamran Y. Mirza Chairman
02 Mr. Adnan Afridi Managing Director
03 Mr. Asad Iqbal Director
04 Mr. Osman Asghar Khan Director
05 Dr. Farid Khan Director
06 Mr. Muhammad Yasin Lakhani Director
07 Mr. Zafar S. Moti Director
08 Mr. Khalid Ahmed Sherwani Director
09 Haji Ghani Haji Usman Director
10 Mr. Amin Yusuf Director
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INVESTMENT CLIMATE
Equity Market
In 1991, the secondary market was opened for foreign investors on an equal basis
with the local investors. This measure along with the government policy of
privatisation has resulted in rapid growth of the market since 1991. It may also be
mentioned that "privatisation" has bee n adopted as a philosophy and most of the
business & finance activities which were previously reserved for the public sector
have now been opened for the private sector. The change of policy is most visible in
the financial sector where a number of commercial banks, investment banks, discount
houses, leasing companies, modarabas, life insurance companies and mutual funds
have been allowed in the private sector.
Liberalisation policy has led to rapid deregulation of the national economy and the
impediments to private initiative have been speedily removed. Foreign exchange
holdings and transfers have been liberalised, industrial sanctioning has been done
away with except for few sectors where, for strategic reasons, prior permission of the
government is necessary.
Legal Framework
The securities market and the corporate sector are regulated by the provisions of :
1. The Companies Ordinance 1984;

2. The Securities and Exchange Ordinance 1969 and Rules framed thereunder in
1971;
3. The Securities & Exchange Commission Act 1999.
There are also Federal legislations relating to specific areas like:
1. Monopolies and Restrictive Trade Practices (Control and Prevention)

Ordinance, 1970;
2. Investment Companies and Investment Advisors Rules 1971;
3. Modaraba Companies and Modaraba (Flotation and Control) Ordinance, 1980;
4. Companies (Issue of Capital ) Rules 1996;
5. Leasing Companies (establishment and Regulation) Rules 1996;
6. Asset Management Companies Rules 1996;
7. Insurance Companies Ordinance 2000;
8. Guidelines for insiders trading.

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In addition to above, the listed companies are also subject to the Rules and
Regulations of the stock exchanges.
The Regulator
The regulatory authority for the securities market and corporate sector in Pakistan is
the Securities and Exchange Commission of Pakistan. The Commission was
established on January 01,1999 by dissolving the Corporate Law Authority which was
formed in 1981 under a Special Law. The Commission administers the compliance of
the Corporate laws in the country. The Commission is run by the Commissioners
under a Chairman.
The Asian Development Bank's Capital Market Development Programme envisaged

the conversion of CLA into Securities and Exchange Commission of Pakistan, as an
autonomous regulatory authority. The new system provides administrative,
operational and financial autonomy to the Commission and at the same time provides
an accountability mechanism through establishment of a Securities and Exchange
Policy Board. All policy decisions are made by the Board on the recommendations of
the Commission which is also empowered to take suo motto action. The Board is
directly answerable to the Parliament.
Members of the stock exchanges are also subject to the discipline of self-regulation
under various Rules and Regulations of the stock exchanges. Self-Regulation is the
essence of market regulation and for this purpose the legal framework has been
amended to facilitate the attainment of SRO status by the stock exchanges.
INVESTOR SPECIFIC
The following plans and tax incentives are available to both investors and listed
companies.
Foreign Investor - specific:
 The foreign investors are freely allowed to operate in the capital market
without any retention period.
 There are no restrictions on the extent of foreign ownership stake and also no
limit for holding the shares for trading purposes.
 Funds invested in the capital market are freely transferable alongwith dividend
income.
 Foreign investors are treated at par with local investors in tax treatment.
Local Investor specific:
 Capital gains on sale of listed securities are exempt from income tax up to the
year 2010. This exemption is available since 1974.
 The dividend is subject to withholding tax at 10%.

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 Dividend income is taxed as a separate block of income in the hands of

individual shareholders.
 Any income derived from TFCs is subject to income tax with effect from
income year 2001 – 2002.
General:
 Listed companies are toned at 35%.

 Provident funds can now invest in approved listed securities. They are also
allowed to invest in open end mutual funds established under the Asset
Management Companies Rules 1996.
 No turnover tax is payable by companies on their turnover representing
transactions in securities listed on stock exchanges.
MEMBERSHIP
Membership of KSE is limited and fixed at 200 and prospective members have to
purchase a seat from existing members. The price of the membership seat is freely
negotiable between the buyers and sellers which varies according to the interaction of
the forces of demand and supply. The KSE does not interfere with these transactions.
However, the membership is allowed subject to fulfillment of criteria and
qualification laid down by the Board.
Since June 1990, membership has been opened to corporate entities. Corporate
members are required to have a minimum paid up capital of Rs. 20 million and are
also subject to criteria fixed by the Board.
The Membership of KSE is also available to foreign entities provided that the
Nominee Director of the company is a citizen of Pakistan.
Criteria for Individual Membership:
1. No person shall be eligible to be admitted as Member, if:
a. He/she is less than 21 years of age;
b. He/she is not a citizen of Pakistan;
c. He/she has been adjudicated a Bankrupt; or a Receiving Order in

Bankruptcy has been made against him/her, or he/she has proved to be
insolvent even though he/she has obtained his/her final discharge;
d. He/she has compounded with his/her creditors, unless he/she has paid
hundred paisas in the rupee;

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e. He/she has been convicted of an offence involving fraud or cheating or

dishonesty or any other indictable criminal offence;
f. He/she is associated with, or is a member of, or subscriber to, or

shareholder or debenture holder in, or connected through a partner or
employee with any other Organization, Institution, Association in
Karachi where dealings in Securities are carried on;
g. He/she has been at any time expelled or declared a defaulter by any

Stock Exchange or Trade Association in Pakistan;
h. He/she has been previously refused admission to the membership of

any Stock Exchange unless a period of six months has elapsed from the
date of such refusal;
2. The applicant should be an income tax or wealth tax assessee or borne as an

assessee on the register of income tax/wealth tax.
3. The minimum qualification for an applicant for the Membership shall be

"Graduation".
(In the case of a person holding at least 5 years experience of working as an
agent with any of the members of the KSE or a former member of the KSE
who had resigned on voluntary basis without any cause of complaint or claim,
may be allowed waiver of this requirement by the Board).
4. The applicant should have sufficient knowledge of stock market business.
5. Reference from a scheduled bank in addition to other references as disclosed

in the Membership form.
6. In the case of an active member filing his/her/their transfer

application/nomination, such member shall also submit a bank guarantee or a
guarantee by one of the existing members of the Exchange or a guarantee by
the incoming member or any equivalent security in the manner as may be
prescribed by the Exchange to the extent of Rs. 2.5 million valid for a period
of 2 years from the date of transfer of membership in order to indemnify the
Karachi Stock Exchange against all claims of replacement of shares received
after the transfer of membership as per Rule 26(a) of Ready Delivery
Contracts.
Criteria for Corporate Membership:

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1. The Corporate Body applicant for membership must;
a. be a company or a statuary corporation or a body corporate;

b. have a minimum issued and paid-up capital of Rs. 20 million.
2. In case of statuary corporation or a body corporate to which section 183 of the

companies Ordinance 1984 applies; the membership application shall be
accompanied by a "no objection" from the Federal or Provincial Government,
as the case may be;
3. The Nominee Director representing Corporate Membership must be a citizen
of Pakistan. Such nominee shall not be a member of the Exchange, nor shall
be a nominee of any other Corporate Member of the Exchange.
4. At least two Directors of the corporate membership including the Chief
Executive must have a minimum academic qualification of "Graduation".
Provided that in the case of conversion of an individual to Corporate

Membership the requirement of minimum qualification for the Chief
Executive shall not apply, where the same individual member continues as
Chief Executive of the Corporate Membership.
(In case the Chief Executive of the Company is a member of the Exchange and
the Nominee Director has the stock market experience of at least 5 years as an
agent with any of the members of the Exchange may be allowed waiver of the
academic qualification by the Board).
5. In the case of an active member filing his/her/their transfer application/

nomination, such member shall also submit a bank guarantee or a guarantee by
one of the existing members of the Exchange or a guarantee by the incoming
member or any equivalent security in the manner as may be prescribed by the
Exchange to the extent of Rs. 2.5 million valid for a period of 2 years from the
date of transfer of membership in order to indemnify the Karachi Stock
Exchange against all claims of replacement of shares received after the
transfer of membership as per Rule 26(a) of Ready Delivery Contracts.
6. The membership application shall be accompanied by an auditors certificate
confirming that the company maintains a net capital balance/net assets value
of at least Rs. 2,500,000/- (excluding the value of membership card).
7. The qualification of nominee Director shall be his holding of qualification
shares in the company to the extent provided under the Articles of the
nominating corporate membership.
8. 50% of the total number of Directors subject to a minimum of two Directors
of the corporate membership, including the Chief Executive and Nominee,
must have a minimum academic qualification of "Graduation".
Provided that in the case of conversion of an individual to Corporate

Membership the requirement of minimum qualification for the Chief
Executive/Nominee shall not apply, where the same individual member
continues as Chief Executive/Nominee of the Corporate Membership.

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(In case the Chief Executive of the Company is a member of the Exchange and
the Nominee Director has the stock market experience of at least 5 years as an
agent with any of the members of the Exchange may be allowed waiver of the
academic qualification by the Board).
9. The Chief Executive and Nominee Director must have at least 3 years stock
market experience.
10. In case the equity of the company is subscribed by foreign participants; No
Objection Certificates from State Bank of Pakistan and Ministry of Finance; is
to be furnished.
NOTICE PERIOD FOR TRANSFER OF MEMBERSHIP
1. In relation to inactive member, who has applied for transfer of his/her/their

membership; the notice period for the purpose shall be 15 days for inviting
objections/claims after the issue of notice.
Provided that an active member, who has been inactive for a period of at least
2 years from the date of filing the transfer application/nomination and, has
also filed a declaration to this effect, shall be treated as an inactive member for
the purpose of notice period of 15 days.
2. In relation to active member (including those who are members of the

Clearing House), the notice period for inviting objections/claims from the
members shall be 90 days after the issue of notice.
Provided that in the event of an undertaking given by the incoming member

(on the prescribed format) to settle all the objections/claims/liabilities of the
outgoing member, the Board may even before expiry of the 90 days notice
period consider and accept the membership application.
NOC OF THE CENTRAL DEPOSITORY COMPANY OF PAKISTAN LIMITED
In case the outgoing member is a participant of Central Depository Company of

Pakistan Limited, he/she is required under the Regulations of CDC to notify the CDC
about his/her application made to the Exchange for transfer of membership and shall
also submit to the Exchange, NOC of the CDC in this behalf.

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CRITERIA FOR SELECTION OF TOP 25 COMPANIES FOR

THE YEAR 2009
KARACHI: Karachi Stock Exchange (KSE) will select top 25 companies for the year
2009 on the basis of new criteria.
While, the selection of top 25 companies for the year 2008 will be made on the basis
of existing criteria, said a KSE announcement here Tuesday.
Under the new criteria, the rate of return on equity has been reduced from 35 percent
to 30 percent (on the basis of before tax profit) while distribution of profit has been
raised from 30 percent to 40 percent.
The condition of turnover share has been deleted under the new criteria.
KSE 100 Index
Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a
benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period of
time. In determining representative compaines to compute the index on, companies
with the highest market capitalization are selected. However, to ensure full market
representation, the company with the highest market capitalization from each sector is
also included.
History of KSE 100 Index
The index was launched in late 1991 with a base of 1,000 points. By 2001, it had
grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It then reached a
peak of 12,285 in February 2007.KSE-100 index touched the highest ever benchmark
of 14,814 points on December 26, 2007, a day before the assassination of former
Prime Minister Benazir Bhutto, when the index nosedived. The index recovered
quickly in 2008, reaching new highs near 15,500 in April. However, by November 22,
2008 during the global financial crisis of 2008 it had fallen to 9,187.
Monthly Performance
Market monthly performance during the period January 2006 to February 2009 is
given under with high rated index showing in bold text. The highest ever closing for
KSE 100 Index was achieved at 15,676.34 points on 18 April, 2008.
Following a staggering loss of 42 per cent in four months (April 2008 to August
2008), the regulators had put planks under the KSE-100 index at 9,144 points on
August 28, 2008 to prevent a further fall. The floor was finally removed on December
15, 2008 that had brought the bourse to a virtual halt for more than 100 days.

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Number Volume Index Date

1 177,668,000 5,333.95 02/02/2009
2 75,434,000 5,753.18 01/01/2009
3 102,000 9,187.10 01/12/2008
4 457,000 9,183.14 03/11/2008
5 1,560,000 9,178.97 06/10/2008
6 23,691,000 9,210.15 01/09/2008
7 72,835,000 10,171.39 01/08/2008
8 60,751,820 12,221.53 01/07/2008
9 169,125,456 12,281.20 02/06/2008
10 257,965,456 14,956.82 02/05/2008
11 218,399,820 15,210.17 01/04/2008
12 196,083,660 14,816.50 03/03/2008
13 151,358,160 13,974.40 01/02/2008
14 375,074,240 13,666.85 01/01/2008
15 137,879,220 13,925.59 03/12/2007
16 328,071,488 13,932.41 01/11/2007
17 367,242,752 13,737.74 01/10/2007
18 179,963,648 12,233.14 03/09/2007
19 326,983,008 13,689.03 01/08/2007
20 471,708,992 13,929.70 02/07/2007
21 460,166,784 12,933.66 01/06/2007
22 431,508,448 12,433.76 02/05/2007
23 73,447,224 11,277.13 02/04/2007
24 229,188,400 11,207.64 01/03/2007
25 480,905,216 11,349.44 01/02/2007
26 39,200,120 10,066.68 03/01/2007
27 172,052,400 10,388.19 01/12/2006
28 310,985,696 11,011.13 01/11/2006
29 224,694,528 10,616.24 02/10/2006

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30 171,682,624 10,170.97 01/09/2006

31 284,526,880 10,507.09 01/08/2006
32 152,448,096 9,603.71 03/07/2006
32 251,317,072 10,183.77 01/06/2006
34 331,884,928 11,572.94 02/05/2006
35 387,000,896 11,573.94 03/04/2006
36 761,960,000 11,473.99 01/03/2006
37 805,494,080 10,497.07 01/02/2006
38 402,639,040 9,672.47 02/01/2006
KSE-30 Index
The Karachi Stock Exchange has launched the KSE-30 Index with base value of
10,000 points, formally implemented from Friday, September 1, 2006. The main
feature of this index that makes it different from other indices are:
• KSE-30 index is based only on the free-float of shares, rather than on the basis
of paid-up capital.
• The other indices in Karachi Stock Exchange represents total return of the
market. That is, when a company announces a dividend, the other indices at
KSE are not reduced/adjusted for that amount of dividend (whether cash or
bonus).Whereas, KSE-30 Index is adjusted for dividends and right shares.
At the end of 13th July, 2007, KSE-30 Index has reached its highest ever level of
17,162.45.

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TIMINGS
HOLIDAYS

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CONTACT KSE
2) Lahore Stock Exchange
Lahore Stock Exchange (Guarantee) Limited is Pakistan's second largest stock

exchange after the Karachi Stock Exchange. It is located Lahore, Pakistan.
Lahore Stock Exchange was established in October 1970 and is the second largest
stock exchange in the country with a market share of around 12-16% in terms of daily
traded volumes. LSE has 519 companies, spanning 37 sectors of the economy, that are
listed on the Exchange with total listed capital of Rs. 555.67 billion having market
capitalization of around Rs. 3.64 trillion. LSE has 152 members of whom 81 are
corporate and 54 are individual members.

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Activities of Lahore Stock Exchange (LSE) have increased significantly in all

operational areas since its inception. Over the years, LSE has successfully met various
challenges and has now emerged, fully geared and positioned to aggressively compete
with its fellow Exchanges, contributing towards the growth of Capital Markets in
Pakistan.
History Of LSE
Lahore Stock Exchange (Guarantee) Limited came into existence in October 1970,
under the Securities and Exchange Ordinance, 1969, of the Government of Pakistan in
response to the needs of the provincial metropolis of the province of Punjab. It
initially had 83 members and was housed in a rented building in the crowded area of
Bank Square in Lahore. The number listed companies has increased to 519 since its
inceptopn.With 37 sectors of economy and 519 listed companies with total capital of
Rs. 555.67 billion having market capitalization of around Rs. 3.64 trillion . LSE has
152 members of whom 81 are corporate 54 are individual members.LSE was first
stock exchaneg of pakistan which used internet and currently 50% of its transactions
are done on internet.
Lahore Stock Exchange has opened branches in the industrial cities of Faisalabad and
Sialkot for trading. The Sialkot branch is referred to as "Sialkot Trading Floor".
Important Developments over the Past Years
A number of significant initiatives have been taken to improve the regulatory regime
and the trading environment for the benefit of Institutional Investors as well as listed
companies. Although the list of such initiatives is exhaustive, below some of these
incentives are touched upon;
• LSE was the first Exchange in the country to undertake automation of trading
at the exchanges in 1994. LSE has made large investments in technology &
automation to keep pace with globalization of securities trading. The
Exchange is fully committed to providing a transparent, efficient, fair and
investor friendly environment for the benefit of Investors and Issuers. The goal
is to bring LSE up to international standards in operational, technical,
regulatory and quality management areas and to ensure that not only domestic
but also foreign investors are attracted.

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• LSE has made direct investment in Pakistan Credit Rating Agency (Pvt) Ltd.
(PACRA), Central Depository Company Ltd. (CDC), National Clearing
Company of Pakistan Ltd. (NCCPL), and National Commodity Exchange Ltd.
(NCEL), all of which play a central role in developing the infrastructure
around the financial markets of Pakistan. In addition, LSE is an active member
of the Federation of Euro-Asian Stock Exchanges (FEAS) and the South Asian
Federation of Exchanges (SAFE), helping to expand its outreach, presence and
profile beyond the boundaries of Pakistan.
• LSE was the first Exchange in Pakistan to offer Internet based trading to its
members in the year 2001. It enables the brokers to reach out to the untapped
retail markets. Currently, more than 50% of the total trading volume at the
LSE originates from Internet trading terminals. The aim of this measure is to
transform the LSE from a regional to a national player over a period of time.
• LSE has increased its geographical outreach by establishing its branches in

other cities of the Province. Two such branch offices have become operational
in Faisalabad and Sialkot. Similar Offices in other cities are also being
contemplated. LSE’s trading system has already been modified to connect
branch offices in real-time fashion. There is a growing need for remote trading
terminals reflecting the confidence of traders in the use of stable Internet
Trading Systems.
• LSE has improved the quality of operations and upgraded them to modern
international standards. This has included upgrading LSE’s IT infrastructure,
updating regulations and procedures to incorporate existing and expected
technological changes, as well as reorganizing and restructuring the
workforce. As a result, LSE’s capabilities as both a front-line regulatory body
and a service organization have been significantly enhanced.
• LSE has successfully launched Unique Identification Number (UIN) System

with an objective to bring more efficiency and transparency to the stock
business and to improve the surveillance and monitoring capacity of the
Exchange.

Page 19 of 28
• LSE has implemented a regular timetable for the Broker System Audit, in
order to build investors’ confidence. Also, LSE has taken effective risk and
exposure management measures including the implementation of a fully
automated in-house developed Trade Risk Filter (TRF) to efficiently monitor
members’ pre-trading exposures on a real time basis. This has been a quantum
leap for LSE in improving its risk management systems.
LSE’s
MEMBERSHIP
STRUCTURE:
Corporate Members
Public Limited
Private Banks or Individual
Year Companies Total
Limited their Members
Companies Listed Un- Subsidiaries
Listed
2000 22 3 5 3 118 151
2001 28 3 6 3 111 151
2002 34 4 4 4 105 151
2003 37 4 5 4 101 151
2004 44 5 5 5 93 152
2005 46 4 5 6 91 152
2006 78 3 7 7 57 152
2007* 81 4 6 7 54 152
*As of May 31st, 2007
• A visible trend at the LSE has been the increasing number of corporate
members. It is heartening to note that part of this increase has been due to the
entry of investment banks/financial institutions (or their subsidiaries) as
members of the Exchange. An overview of this trend over the past years is as
follows:
• The above trend has led to record trading volumes as well as an improved
product offering. The measures at LSE have attempted to create an
atmosphere, which is more conducive and transparent for investment. The
investing public has received the reforms very positively.
• LSE Training Institute specifically dedicated to the Capital Markets, is the first
of its kind in Pakistan and was established in 2006. Formal courses have been
introduced to provide trained human resources for the capital markets. It has
also launched a series of Education Programs with a view to educate the
brokers, agents and general public about the securities market and its laws. In
an effort to promote the education sector, particularly in relation to financial

Page 20 of 28
markets, LSE is providing scholarships to deserving students of Lahore

University of Management Sciences (LUMS). LSE encourages universities
and colleges to come and visit LSE.
• In another trend-setting example, Lahore Stock Exchange and Islamabad

Stock Exchange have joined hands to establish a Unified Trading Platform
which will help to bring increased liquidity in the market, improve price
discovery, maximize transparency, increase turnover, broaden investor base,
curtail risks and distortions in trade, provide cost effective service to the
investing public and enhance the image of both the Exchanges.
• As part of second generation capital market reforms being pursued by the
Securities & Exchange Commission of Pakistan, demutualization is being
seriously considered by the members of the exchanges and hopefully that
during the year 2007 a decision will be taken in the best interest of the capital
markets of the country. Demutualization is in line with international standards,
which will ensure that the exchange truly and fairly represents the interests of
all stakeholders.
The Organization

Page 21 of 28
Core Values
• Ethical Behavior
• Freedom through responsibility
• Good Governance
• Innovation and Enterprising Spirit
• Perseverance in Pursuit of Commitment

Page 22 of 28
• Professional Integrity
• Strategic vision in Planning
• Team Work
• Transparency
• Valuing People
LSE BOD’s
Mr. Arif Saeed : Chairman Mr. Ibrar A. Mumtaz

Chairman, Service Industries Limited, Service Chairman : Fazal Din Pharma Plus Mall Mansion,
House, 2-Main Gulberg, 20-Shahrah-e-Quaid-e-Azam Lahore.
Lahore
Phone (Off) : 042-7355713, 042-7355458, 042-
Phone : 042-5711003, 042-5751990-96 7320135-6
Fax : 042-5712109, 5711827, 5710593 Fax : 042-7358025
Email : arif@servis.com Email : fazaldins@yahoo.com
Mr. Sikandar Mustafa Khan Mr. Walid Iqbal

Chairman : Millat Tractors Limited 83-A, E/I, Main Advocate : 61-Main Gulberg, Lahore
Boulevard, Gulberg-III Lahore.
Phone (Off) : 042-5874835-36 Direct: 042- Phone : 042-5870961-3

5782453
Fax : 042-5870960
Fax : 042-5782454
Email : walid.iqbal@lexiumlaw.com
Email : smkhan@millat.com.pk
Mr. Naeem Anwar Mr. Chaudhry Muhammad Afzal
Director : MAAN Securities (Pvt.) Ltd. Room No. Nominee : Rahat Securities Ltd. Room No. 617-618,
611, 6th Floor, LSE Building 19-Khayaban-e-Aiwan-e- 6th Floor, LSE Building 19-Khayaban-e-Aiwan-e-Iqbal
Iqbal Lahore Stock Exchange (G) Ltd. Lahore Lahore Stock Exchange (G) Ltd. Lahore
Phone : 042-6308000-2 Phone : 042-6315223
Fax : 042-6315558 Fax : 042-6314253
Email : maansecurities@hotmail.com Email : info@rahatonline.com

Dr. Arslan Razaque Mr. Jahanzeb Mirza
Director : Dr. Arslan Razaque Securities (SMC) Pvt. Nominee : S. D. Mirza Securities (Pvt.) Ltd. Room
Ltd. 1-C, Model Town Lahore No. 401, 4th Floor , LSE Building 19-Khayaban-e-
Aiwan-e-Iqbal Lahore Stock Exchange (G) Ltd.
Lahore
Phone : 042-5884071, 042-5866137
Phone : 042-6368975, 042-6365921, 042-6375310
Fax : 042-5838683, 042-5889315
Fax : 042-6369108
Email : arslanr@yahoo.com
Email :
Mr. Omer Khalil Malik Mian Shakeel Aslam : Managing Director /

Nominee : Networth Securities (Pvt) Limited Suite CEO
No. 211, 2nd Floor, LSE Building 19-Khayaban-e- Lahore Stock Exchange (G) Ltd. 19, Khayaban-e-
Aiwan-e-Iqbal Lahore Stock Exchange (G) Ltd. Aiwan-e-Iqbal
Lahore Lahore
Phone : 042-6307701-4
Phone (Off) : 042-6368000, 042-6316972
Fax : 042-6307705
Fax : 042-6368484-85
Email : info@networth.com.pk
Email : msaslam@lahorestock.com
LSE Index

Page 23 of 28
LSE-25:
The Lahore Stock Exchange Twenty Five company index also calculates the
performance of stocks assuming that all rights issues and bonus share issues only
increase the listed capital. In the case of bonuses or rights the prices of the shares are
not adjusted as they are in the case of the LSETRI. However, the LSE25 assumes that
dividends paid out by a component company are not reinvested. In summary, in the
LSE25, no price adjustments are made when any component company issues cash
dividends.
The Lahore Stock Exchange Total Return Index calculates the performance of stocks
assuming that all payouts are reinvested in the index on the ex-date. The LSETRI
assumes that if a component company issues bonus shares or announces a rights issue
it will increase the listed capital. Additionally, the LSETRI also assumes that all pay-
outs by a component company are 100% reinvested in the index. Therefore, the
LSETRI is adjusted against such payouts announced by any of index constituents on
its ex-date allowing the index value to remain comparable over time.
Contact LSE
Head
Office
Postal Address: 19, Khayaban-e-Aiwan-e-Iqbal, P.O. Box: 1315, Lahore-54000, Pakistan
PABX: (92-42) 6368000
FAX: (92-42) 636 8484-85
E-mail Address: info@LahoreStock.com
Web Site: http://www.LahoreStock.com
Faisalabad Office
Postal Address: Lahore Stock Exchange (G) Ltd. Faisalabad Trading Floor 2- Liaqat Road, 5th Floor
State Life Building Faisalabad
PHONE: (92-41) 2622502
FAX: (92-41) 2604157
E-mail Address: Khalid@LahoreStock.com
Sialkot Office
Postal Address: Lahore Stock Exchange (G) Ltd. Sialkot Trading Floor 2nd floor cantt plaza, Allama
Iqbal Road, Sialkot
PHONE: (92-52) 4566262, 4566363
FAX: (92-52) 4566000
E-mail Address: AwaisButt@LahoreStock.com
3) Islamabad Stock Exchange

Page 24 of 28
About ISE
The Islamabad Stock Exchange (ISE) was incorporated as a

guarantee limited Company on 25th October, 1989 in
Islamabad Capital territory of Pakistan with the main object
of setting up of a trading and settlement infrastructure,
information system, skilled resources, accessibility and a fair
and orderly market place that ranks with the best in the world.
The purpose for establishment of the stock exchange in
Islamabad was to cater to the needs of less developed areas
of the northern part of Pakistan.
The ISE has set the highest standards of operational efficiency and is committed to
support a climate of confidence and optimism that encourages and promotes trading
activity. It also provides for conducive environment to channelize the small
investments of the residents of less developed areas. The ISE offers an easy access to
both domestic as well as foreign investors and actively encourages the listing of
eligible and profitable companies, both large and small to make it an exciting and
diverse Exchange. The Exchange is playing a pivotal role for economic growth of the
area thereby contributing towards the overall economic prosperity and welfare of the
country.
At present there are 118 members out of which 104 are corporate bodies including
commercial and investment banks, DFIs and brokerage houses. The other 18
Members are individual persons who are well educated, enterprising and progressive
minded. The affairs of the Exchange are governed by the Board of Directors. The
Board of Directors consists of ten directors, of which five are elected member
directors and four are non-member directors nominated by the SECP while the
managing director by virtue of his office is the tenth director of the Board . In order to
protect the interest of the investing public, an Investors Protection fund has been
established by the Exchange.
Since the inception of automated trading system (ISECTS), the trade volume has been
multiplying day by day and the average daily turnover has now crossed the figure of
1 million shares. Now all the listed securities are traded through the ISECTS. The
system of physical handling of shares and securities has been phased out and majority
of the scrips are settled through Central Depository Company of Pakistan Limited.
At the moment there are 248 companies/securities listed including 6 Open- End
Mutual Fund and 4 TFCS on the Exchange with an aggregate capital of Rs.
572,057.266 million. The market capitalization stood at Rs. 1,943,646.210 million as
on 16-12-2008 . The pace of listing has remained slow as the economy of the Country
is under consistent pressure due to internal as well as external factors.
In comparison with major financial markets around the World, the functioning of
capital market in Pakistan is still very much in its infancy and lacks advanced
technology. In this context efforts are being made to bring ISE in line with the
International system and methodology.

Page 25 of 28
Board of Directors
 Mr. Rafiud Deen Ahmad Chairman
 Mr. Aftab Ahmad Ch. Managing Director / CEO
 Syed Nooh Adnan Director
 Mr. Zahid Latif Khan Director
 Mr. Rafaqut Ali Ch. Director
 Sheikh Muhammad Shabbir Director
 Sheikh Riaz Ahmad Director
 Mr. Aslam Khaliq Director
 Mr. Tariq Khamisani Director
 Mr. Zouhair Abdul Khaliq Director
Rules and Regulations
ISE, being a self regulatory organization has its own sets of rules and regulations to
regulate its various activities including listing of companies/ securities on its ready
board quotation, supervision of member firms to enforce compliance with financial
and operational requirements, periodic checks on broker’s sales practices, and the
continuous monitoring and surveillance of their trade operations.
Following is the list of Rules and Regulations of Islamabad Stock Exchange:-
Articles of Association.
Brokers & Agent Registration Rules.
Clearing House Procedure Manual.
General Rules & Regulation of ISE.
Internet Trading Guidelines 2005
ISE Computerized Trading Regulations.
ISE Investors Protection Fund Regulations.
Listing Regulations of ISE.
Members Default and Procedure for Recovery of Losses Regulations
Memorandum Of Association.

Page 26 of 28
Regulations for Margin Trading
Regulations for Proprietary Trading
Regulations for Short Selling under Ready Market.
Regulations for Trading in Provisionally Listed Companies.
Regulations Governing Cash-Settled Futures Contracts of ISE
Regulations Governing Deliverable Futures Contract of ISE
Regulations Governing Future Contracts of ISE.
Regulations Governing ISE Members Offices/ Branch Offices
Regulations Governing Over-The-Counter(OTC) Market of ISE
Regulations Governing Risk Management of ISE
Regulations Governing System Audit of Members
Unified Trading System Regulations
Investor Education
Islamabad Stock Exchange is fully aware of the importance of investors’ education

and believes that by educating the public about stock market investments, further
prosperity can be brought in the society. The object of the investor education is to
enable a person with absolutely no knowledge of stock exchange to efficiently trade
securities and ultimately assist in developing a profitable portfolio.
The ISE has taken the following initiatives towards the investors education:
• Launching of website containing comprehensive material and a lot of

information about the capital market.

Page 27 of 28
• Arrangement of presentations/briefings to the general public about the

Islamabad Stock Exchange
working
Stock Exchange and functioning
building of the stock markets.
101-E Fazal-ul-Haq Road
Islamabad-44000
Pakistan
• Opening of Investors Information Centre for dissemination of information

to the general public.
PHONE +92-51-111-600-800
FAX +92-51-2275044
E-MAIL ise@ise.com.pk
• Installation of Investors Hot Line for providing online reply to some basic
questions about the stock market. The people may be connected to this
Hotline and may have reply of some basic queries. The ISE has obtained a
Universal Access Number i.e. 111-600-800
• Publishing the research papers about the capital market.
• Companies financial analysis are regularly updated on the website.
Contact ISE

Page 28 of 28
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Stock Exchanges of Pakistan

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Stock Exchange of Pakistan

About Stock Exchage

(A stock exchange, securities exchange or bourse is a corporation or mutual

The First Stock Exchanges

House Ter Beurze in Bruges, Belgium.

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The role of stock exchanges

 Raising capital for businesses

 Mobilizing savings for investment

 Facilitating company growth

 Creating investment opportunities for small investors

 Government capital-raising for development projects

 Barometer of the economy

Major stock exchanges

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Americas Toronto Stock Exchange $2.29 $1.36

South Asia National Stock Exchange of $1.46 $0.564

Europe Frankfurt Stock Exchange $2.12 $3.64

Madrid Stock Exchange

Europe Milan Stock Exchange (Borsa $1.13 $1.98

Europe Moscow Interbank Currency $0.9652 $0.4882

Europe Nordic Stock Exchange Group $1.38 $1.60

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Stock Exchange In Pakistan

In Pakistan there are three Stock Exchanges..

 Karachi Stock Exchange (KSE)

1) Karachi Stock Exchange

GROWTH & PROGRESS * As on December 31, 2008

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Following are the members of the Board.

1. The Companies Ordinance 1984;

There are also Federal legislations relating to specific areas like:

1. Monopolies and Restrictive Trade Practices (Control and Prevention)

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The Asian Development Bank's Capital Market Development Programme envisaged

Foreign Investor - specific:

Local Investor specific:

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 Dividend income is taxed as a separate block of income in the hands of

 Listed companies are toned at 35%.

Criteria for Individual Membership:

1. No person shall be eligible to be admitted as Member, if:

a. He/she is less than 21 years of age;

b. He/she is not a citizen of Pakistan;

c. He/she has been adjudicated a Bankrupt; or a Receiving Order in

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e. He/she has been convicted of an offence involving fraud or cheating or

f. He/she is associated with, or is a member of, or subscriber to, or

g. He/she has been at any time expelled or declared a defaulter by any

h. He/she has been previously refused admission to the membership of

2. The applicant should be an income tax or wealth tax assessee or borne as an

3. The minimum qualification for an applicant for the Membership shall be

4. The applicant should have sufficient knowledge of stock market business.

5. Reference from a scheduled bank in addition to other references as disclosed

6. In the case of an active member filing his/her/their transfer

Criteria for Corporate Membership:

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1. The Corporate Body applicant for membership must;

a. be a company or a statuary corporation or a body corporate;

2. In case of statuary corporation or a body corporate to which section 183 of the

Provided that in the case of conversion of an individual to Corporate

5. In the case of an active member filing his/her/their transfer application/

Provided that in the case of conversion of an individual to Corporate

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NOTICE PERIOD FOR TRANSFER OF MEMBERSHIP

1. In relation to inactive member, who has applied for transfer of his/her/their

2. In relation to active member (including those who are members of the