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History of Karachi stock exchange 100 index

History has shown that if the stock market of any economy is on the rise then it is considered as a booming economy in the world. Stock market is considered as the essential indicator of the country’s economic strength and development.

In Pakistan, there are three major stock exchanges are working. Firstly, the Karachi Stock Exchange, secondly, the Lahore Stock Exchange and thirdly, the Islamabad Stock Exchange. Another stock exchange named Pakistan Stock Exchange was formed in Jan, 2016 with the merger of KSE, LSE and ISE. Karachi stock exchange-100 index is considered as the exemplary stock exchange among all other stock exchanges working in Pakistan.

Karachi stock exchange-100 index was launched with a base of 1000 points in Nov, 1991. It is the major stock market index followed by the performance of companies with the highest market capitalization from each sector of Pakistani economy.  Later on, based on its performance was generally accepted as the benchmark in the world of stock market.

Constitutional instability in the country imposes negative impacts on the stock markets of the country as well. Karachi stock exchange-100 index also went through many ups and downs due to the political instability in Pakistan.

In 2002, Karachi stock exchange-100 index was declared as the world best performing stock exchange. A clear raising trend in Karachi stock exchange-100 index can be observed over the last 10 years. It crossed the barrier of approximately 12000 points for the first time in the history of capital market and touched an all time high in April, 2006.

Later on, Karachi stock exchange-100 index reached at its peak in 2007 with approximately 14800 points, before the assassination of Benazir Bhutto. But right after her assassination it started declining but regained quickly and achieved the highest ever benchmark of 15000 points in 2008. This immense increase made it the best performer among emerging markets. It faced a sharp fall in May, 2008 due to the unexpected increase in the interest rates imposed by State Bank of Pakistan.

Resignation of Pervaiz Musharaff in Aug, 2008 resulted in an incredible boost of almost 4% for the Karachi stock exchange 100 index. In 2011-2012, Karachi stock exchange-100 index becomes the best emerging stock market in Asia with the returns of up to 40%-50%.This year showed that it has the potential to perform well even in worse economic conditions.

With this gradual increase, Karachi stock exchange-100 index reached at the value of approximately 28000 points in 2012-2013.

Till date, Karachi stock exchange-100 index achieved all time high of 38000 points. However went down after the exit Britain from EU.

Since Oct, 2012, Karachi stock exchange 100 index is a free-float index. After its launching in 2002 it was declared as best market performer stock exchange. To this day, it has kept its international reputation as the best performer.  Currently Karachi stock exchange-100 index has crossed 40000 points. It is a highly diversified index of 100 largest capitalization companies from all the sectors of Pakistan.

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About Emaad Qureshi