You might be asking yourself why do even people need stock exchange. Or why do they even exist?

Answer To This Question Lies In The Following Four Key Points

Price Transparency Anonymity Guarantee + Settlement Regulations

Price transparency

Price transparency is the ability to know all of thebid prices, ask prices, and trading quantities for a given stock, good, or service at any point in time.

Anonymity

The Stock Exchange provide its client the anonymity means the ability to trade without letting other know who you are.

Guarantee + Settlement

The Guarantee means if you by shares through Stock Exchange then the deal will be honored by both Seller and Buyer.

Settlement means that the Shares are legally registered with the exchange.

Regulations

Since the trade moved out of the coffee houses or restaurants to stock Exchanges which were informal and very risky, then certain rules and regulation also came in. The purpose of which was to carry fair trades and in the fastest way possible.

Stock Market Indices

Stock Market Indices provides a useful way to get broad information on how the overall market is doing. Increase in them represents increase in the overall market.

There Are Various Market Indexes But As We Live In Pakistan So We Will Specifically Study Only Them.

Karachi Stock Exchange

Lahore Stock Exchange

Islamabad Stock Exchange

So The Stock Market Indices Used In Karachi Stock Exchange Are As Under…

KSE-100 KSE-30 KSE- ALL SHARE KMI-30 BK TI OG TI

KSE-100

Comprises the top company from each of the 34 sectors on the KSE

It represents over 85% of the market capitalization of the Exchange

Calculation is done by taking equity’s price and multiplying it by all the shares of company

KSE-30

Introduced in 2006

Includes only the top 30 most liquid companies

Based on “Free Float Methodology

In Free Float Methodology we multiply equity price with only the numbers of share readily available in the market

KSE-ALL SHARES

The Karachi Stock Exchange All-Share index is a market capitalization weighted index comprising all listed stocks on the Karachi Stock Exchange.