The Karachi Stock Exchange (Guarantee) Limited’s notice for all members kse 100 index based on free-float methodology
Karachi, June 15, 2012 (PPI-OT): Member are hereby informed that the Governing Board of Directors of the Exchange in its meeting held on April 24, 2012 reviewed the subject matter and as recommended by the KSE Index Committee, decided to approve the introduction of a new 100-index based on a free float capitalization method. This methodology is a variation of the market capitalization method used for our current (KSE-100) Index. This methodology instead of using selected companies’ total outstanding shares, shall calculate the index using their free-float, or shares that are readily available for trading. Details of this methodology and migration plan to free-float Index are available on our website www.kse.com.pk . The free-float market capitalization method is regarded as the industry best practice.
It has been decided that both indices i-e the current full capitalization KSE-100 index and the Free-float based new Index, will run in parallel for next 90 days for comparison purposes and for any adjustments/ rebalancing that might be required by Investors / Funds in their portfolios, due to this modification. Thereafter at the time of next scheduled re-composition (October 01, 2012) of the Index, the KSE-100 (Free Float) shall replace the KSE full-capitalization 100 index.
It is further informed that the Rules for composition and re-composition of the new Index shall remain unchanged. The only difference of the new Index is the selection and computation of the index on the basis of free-float market capitalization instead of the total market capitalization of the existing Index.
For more information, contact:
Karachi Stock Exchange
Tel: (92-21) 111-001122
Fax: (92-21) 3241 0825, (92-21) 3241 5136