From 1999 to 2005, the Karachi Stock Exhange has been the highest performing in world! Just two years ago, the KSE was at a record high 3,550 points level. Too many 5000 plus seemed surreal back then – now its at 10,000!
The KSE has a ‘$40 billion dollar market capitalization’:http://pakistantimes.net/2005/03/12/business3.htm, and a daily average trading volume of 933 million dollars. It’s increased 33 percent from Jan 1 2005 to Feb 25, 2005.
There are only 662 companies listed in the exchange. PTCL alone is valued at approx. 7.3 billion dollars.
The “KSE website”:http://www.kse.com.pk is very impressive. I think it is updated almost in real time.
All is not sunshine and roses though. The companies privatized through 2001 including NBP, OGDCL, SSGC, PIA & PPL only brought in $289 million dollars, as against their current valuation of *1.1 billion dollars*. Was 289 million a fair price, considering these same companies are now valued 3.8 times that?
bq.. Pakistan Telecom, Pakistan State Oil and Oil & Gas account for 60 percent of the KSE 100’s surge this year, according to Khalid Iqbal Siddiqui, head of research at Investcapital Securities in Karachi.
“The major factor driving the local stock markets now is privatization,” Siddiqui said. ‘source’:http://www.bloomberg.com/apps/news?pid=10000080&sid=a2p8P5bKMyPA&refer=asia
p. *March 18:* The KSE crosses 10,000 going the ‘other way’:http://www.jang-group.com/thenews/mar2005-daily/18-03-2005/business/b1.htm:
bq. The KSE 100-share index scored yet another record falling 441.52 points, or 4.38 percent, to close the day at 9,636.37 points falling from the previous day’s closing at 10,077.89 points, according to the market report issued by KSE.
>> ‘Rs 120 billion evaporates due to largest ever KSE index plunge’:http://www.dailytimes.com.pk/default.asp?page=story_18-3-2005_pg5_13
9600 plus is still very high. Doesn’t seem anything to worry about. There are still a few white elephants awaiting privatization – until those are all done the sun will remain shining on the KSE.
*March 25, 2005:*
bq.. When Pakistani shares broke through the psychologically-important 10,000 level on the Karachi Stock Exchange, it was interpreted as a sign of economic recovery.
But some analysts are now saying the recovery was not justified by economic fundamentals, and that the realisation of this by speculative buyers has caused shares to fall even further.
The KSE has fallen 17.5% over the past six trading days.
>> ‘BBC: Pakistanis riot as shares plunge’:http://news.bbc.co.uk/2/hi/business/4380109.stm
p. The Dailytimes: ‘Small investors riot outside KSE as downturn continues’:http://www.dailytimes.com.pk/default.asp?page=story_25-3-2005_pg5_1
p. The stock exchange seems to have stablized now. What is funny is many peoples view that it is their god given right that the stocks they invested in should continue going up forever. What also could do with some thought is the rule to suspend trading in a share when it drops 5 percent. As a direct consequence, this increased panic amongst small investors as the stock would be suspended before they could trade, and in many cases it was days before they could sell off their shares in which they were losing the most money.
h4. further reading
* “The Pakistan Economist on privatization”:http://www.google.com/search?hl=en&lr=&q=site%3Ahttp%3A%2F%2Fwww.pakistaneconomist.com+privatization++&btnG=Search
* “Google News Search on privatization pakistan”:http://news.google.com/news?hl=en&lr=&tab=wn&ie=UTF-8&scoring=d&q=privatization+pakistan&btnG=Search+News
* ‘IS PRIVATIZATION IN PAKISTAN PURPOSEFUL?’:http://www.pide.org.pk/PSDE/Is%20Privitization%20in%20Pskitan%20Purposeful.pdf
* ‘The scandal behind Pakistans raging bull run’:http://www.atimes.com/atimes/South_Asia/GC30Df03.html