FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
KARACHI STOCK EXCHANGE
CAPITAL MARKET DEVELOPMENT AND ECONOMIC OUTLOOK
The macroeconomic landscape of the country
was badly affected by devastating floods
in July 2010, which directly affected about
20 million people, mostly by destruction of
property, livelihood and infrastructure; thereby
inflicted significant damage to the fragile
economy. ADB approved a US$ 650 million
loan to Pakistan which was used to rebuild the
damaged infrastructure. Shortage of power and
gas, escalating utilities costs, high borrowing
cost exacerbated the situation for Large Scale
Manufacturing as well as Service sectors. The
fiscal position remained weak with poor revenue
generation whilst expenditure escalated. Real
GDP growth in the outgoing year was recorded
at 2.4% as compared to 3.8% in the previous
Fiscal Year. Nevertheless, our economy has
shown strong capacity to overcome challenges
originated from both internal and external
economic environment while struggling towards
achieving long term sustainable growth.
PERFORMANCE OF THE MARKET
The market started in the FY 2010-11 with
some positive note as LSE-25 Index starting
from 3092.70 points. The market and the Index
reached the lowest level of 2970.86 points of
the period under review and closed at 3051.12
points at the close of the financial year. Local
investors remained jittery while seeking clarity
on the modalities of Capital Gain Tax (CGT).
Investment in capital market during the period
July-March 2010-11 by the foreign investors
depicted a net inflow of US$ 301.5 million.
Corporate profitability increased in year 2011
but profitability concentrated in few large
companies in the Energy, Telecom and Banking
sectors.
During the period under review, seven Open
end Funds were listed. Further, two companies,
one TFC and one Participation Term Certificate
were in the pipeline of listings. Two Closed end
Funds were converted into Open End Funds.
Twelve securities were delisted out of which
three companies merged with other companies,
seven companies went into Winding Up by
Key Information Contacts
Government of Pakistan www.pak.gov.pk
Ministry of Finance www.finance.gov.pk
Privatization Commission www.privatisation.gov.pk
State Bank of Pakistan www.sbp.org.pk
Security and Exchange Commission of Pakistan www.secp.gov.pk
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Court Orders, one Open end Fund matured and
fully redeemed and one Company was de-listed
after the buy-back the shares by the sponsors.
Total companies listed at LSE were 496 as
compared to 510 companies in the previous
year. The total listed capital increased from Rs.
842.596 billion (US$ 9.362 billion) to Rs. 888.190
billion (US$ 9.868 billion) as on June 30, 2011.
Similarly, the aggregate market capitalization
increased from Rs. 2,622.928 billion (US$
29.143 billion) to Rs. 3,166.044 billion (US$
35.178 billion) as on June 30, 2011. The
volumes of the Exchange shrunk considerably
i.e. by 66%. During the period under review,
total share volume of regular market reduced
to 1,124.762 million shares as compared to
previous FY figure of 3,362.668 million shares.
Complementing the efforts of members and
listed companies in seeking to find better
levels of optimum operational efficiency, LSE
continued to identify areas of improvement
as part of the Exchange’s present and future
development.