The Numbers (1 to 9): Their Hidden Meaning, Their Influence on Men and Women’s Character The Single Numbers and Natural Addition: The Single Number: The numbers 1 to 9 are called the single numbers. They are the basis for all of our calculations. Any number higher than 9 can be reduced to a single number using a process called natural addition. The Natural Addition: In natural addition, you add the digits of a number together until you get a single number. For example, the number 11 would be reduced to 2 because 1 + 1 = 2. The number 14 would be reduced to 5 because 1 + 4 = 5. The Soul/Spirit Number: The single number that is left after natural addition is called the soul number or spirit number. It is believed that this number can reveal important insights into a person's personality and character. The Planets and the Numbers: The nine single numbers are associated with the nine planets in our solar system. This is why it is believed that mastering the meaning
KSE100 Index
KSE100 Index measures the performance of 100 companies with the largest market capitalization in their respective sectors.
1. Introduction
Introduced in November 1991 with a base value of 1,000 points, the KSE-100 Index comprises 100 companies selected based on sector representation and the highest Free-Float Capitalization. These companies capture around 70-80% of the total Free-Float Capitalization of companies listed on the Exchange. Out of 36 sectors, one company is selected from each of the 35 sectors (excluding Open-End Mutual Fund Sector) based on the largest Free-Float Capitalization. The remaining 65 companies are selected based on the largest Free-Float Capitalization in descending order. This is a total return index, meaning that dividends, bonuses, and rights are adjusted.
In early 2012, the Index Expert Committee (IEC) of PSX recommended to the governing board of directors of Pakistan Stock Exchange Limited (PSX) to implement the KSE100 Index based on free-float market capitalization. The governing PSX Board approved this recommendation in a meeting held on April 24th, 2012. The Free-float based KSE 100 was calculated parallel to the full-cap KSE-100 Index since June 11th, 2012, and the recomposed KSE100 Index based on free-float methodology became effective from October 15th, 2012. In this transition, the rules for composition and re-composition of the Index based on free-float methodology remained unchanged other than selecting companies based on free-float market capitalization instead of total market capitalization.
2. Objective
The primary objective of the KSE100 index is to serve as a benchmark for comparing stock price performance over time. Specifically, the KSE 100 is designed to provide investors with an indication of how the Pakistan equity market is performing. As such, it is similar to other indicators that track various sectors of Pakistan's economic activity, such as gross national product and consumer price index.
3. Free - Float Methodology
Free-Float refers to the proportion of a company's total issued shares that are readily available for trading at the Stock Exchange. It generally excludes shares held by controlling directors/sponsors/promoters, government, and other locked-in shares not available for trading in normal course.
3.1 Objective and Description
Free-Float calculation can be used to construct stock indices that better represent the market than those constructed based on total market capitalization of companies. It assigns weight to constituent companies according to their actual liquidity in the market and is not unduly influenced by tightly held large-cap companies. Free-Float can also be used by the Exchange for regulatory purposes such as risk management and market surveillance.
Under no circumstances shall free-float of a scrip exceed its book entry shares available in Central Depository System.
"Sponsor" has the same meaning as defined in The Companies (Issue of Capital) Rules, 1996.
"Senior Management Officer" and "Associate" have the same meaning as defined in Securities Act, 2015.
4. Selection Criteria of Stocks
The selection criteria for stocks include having the largest Free-Float Capitalization in each of the 35 Pakistan Stock Exchange sectors, excluding the Open-end Mutual Fund Sector including ETF Funds. The remaining index places (in this case, 65) are taken up by the largest Free-Float Capitalization companies in descending order.
List Of Sectors of Pakistan Economy as follows:
A company that is on the Defaulters' Counter and/or has had its trading suspended or declared Non-Tradable in the preceding 6 months from the date of re-composition shall not be considered in the re-composition of the KSE-100 Index. A newly listed company qualifies for inclusion in the existing index (after one re-composition period) if its Free-Float Capitalization is at least 2% of the total Free-Float Capitalization.
5. Re-composition/Review Period
The KSE-100 Index is recomposed on a semi-annual basis as follows:
6. Addition/Deletion of Stocks during Re-composition Process
Maintenance of the index over time requires an ongoing semi-annual re-composition process. Internal and external buffer files of shares that exceed (shares outside the index) or fall below (shares inside the index) the above criteria will be maintained under the jurisdiction of the Board of Directors/Management of the Exchange.
Maintaining adequate representation of the underlying stock market through all future development and changes depends on establishing an appropriate re-composition process. Re-composition rules fall into two general categories: Sector Rules and Free-Float Capitalization Rules.
6.1 Sector Rules
Sector rules govern the selection (or deletion) of companies based on being the top Free-Float Capitalization stock in each of the 35 PSX sectors (excluding Open-end Mutual Fund sector). Two rules are recommended for selection in this area: a time-based rule and a value-based rule. Stocks are triggered by compliance with either rule.
Time-based rule: A stock (not in the index) that becomes the largest in its sector (by any amount of value) shall enter the index after maintaining its position as largest in the sector for two consecutive re-composition periods.
Value-based rule: A stock (not in the index) that becomes the largest in its sector by a minimum of 10% greater in capitalization value than the present largest in the sector (in the index) will enter the index at the time of re-composition.
6.2 Capitalization Rule
Capitalization rules govern the selection (or deletion) of companies based on being among the largest free-float capitalization companies in the stock market. Only one rule applies here: a time-based rule.
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Time-based Rule
A stock (not in the index) may qualify for entry if it exceeds the market cap value consecutively in two re-composition periods of the last stock in the index selected based on market cap. A qualifying company automatically pushes out the lowest cap selected stock in the index.
7. Base Period
The base period of the KSE100 Index is November 1991, and the base value is 1,000 index points. The calculation of the KSE100 Index involves dividing the free-float market capitalization of 100 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the KSE 100 Index and keeps the Index comparable over time. It also serves as the adjustment point for all future corporate actions, replacement of scrips, etc.
8. Maintenance of KSE100 Index
The day-to-day maintenance of the Index is carried out within the Broad Index Policy Framework set by the Exchange. The Management ensures that the KSE100 Index and all other PSX indices maintain their benchmark properties by balancing frequent replacements in indices with maintaining their historical continuity.
9. Online Computation of the Index
During market hours, prices of Index scrips at which trades are executed are automatically used by the trading computer to calculate the KSE100 Index and continuously update all trading workstations connected to PSX trading computers on a real-time basis.
10. Adjustment in KSE100 Index for Corporate Actions
The KSE100 Index is calculated on a total return basis, and corporate actions (Cash dividend, Bonus, and Right issue) adjustments are made to maintain index continuity. If no adjustments were made, a discontinuity would arise between the current value of the index and its previous value despite no economic activity of substance occurring. At the Exchange, the base value is adjusted, which is used to alter market capitalization of component stocks to arrive at the KSE100 Index value.
The determination of Ex price of a security is mentioned in Rule 10.6 of PSX Rule Book: "If Books of a Security are closed for determining any entitlement for its shareholders by Company, Exchange shall determine ex-price based on mechanism prescribed by Exchange as opening price for Trading Day falling on two Settlement Day before its Books Closure starting date."
New Divisor shall be calculated due to corporate action at end of T-3 days of its Book Closure starting date (e.g., if starting day of Book Closure = Friday, new divisor shall be calculated at day-end of Tuesday).
The adjustment for corporate actions will be made as follows:
10.1 Adjustment for Cash Dividend
The KSE100 Index is a total return index; therefore, adjustment for cash dividend shall be made.
Example: If a company declares a 10% cash dividend:
KSE100 Index = 1,120 points
KSE100 Index market capitalization = Rs. 13,950,000,000
Divisor = 12,455,357
| Constituents | Share Price | Free Float Shares | Free Float Market Capitalization (RS) |
| --- | --- | --- | --- |
| Stock A | 22.50 | 50,000,000 | 1,125,000,000 |
| Stock B | 41.00 | 150,000,000 | 6,150,000,000 |
| Stock C | 44.50 | 150,000,000 | 6,675,000,000 |
| **Total Free Float Market Capitalization** | | | **13,950,000,000** |
Step-1: Determine ex-dividend price of Stock A to calculate revised market capitalization and new divisor for next day.
Stock A:
Par value: Rs.10 per share
Closing Price: Rs.22.50 per share
Cash Dividend: 10% of par value
i) Cash dividend amount per share = par value x dividend% = Rs.10 x 10% = Rs.1
ii) Ex-dividend price = closing price - cash dividend amount = Rs.22.50 - Rs.1 = Rs.21.50
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**Step-2: Illustration, Revision in Market Capitalization and Divisor**
After the close of day, the share price and free-float shares of Stock A are adjusted to calculate the New Divisor for the next day.
| Constituents | Share Price | Free Float Shares | Free Float Market Capitalization |
| --- | --- | --- | --- |
| Stock A | 20.45 | 55,000,000 | 1,124,750,000 |
| Stock B | 41.00 | 150,000,000 | 6,150,000,000 |
| Stock C | 44.50 | 150,000,000 | 6,675,000,000 |
| **Revised Free Float Market Capitalization** | | | **13,949,750,000** |
New Divisor = Revised Market Cap. / Index points = 13,949,750,000 / 1,120 = 12,455,134
*Divisor changed as stock prices are reported in two decimal places.
10.2 Adjustment for Bonus Shares
The declaration of Bonus requires adjustment in free-float capitalization and within the Index Divisor itself. The following process illustrates the process for a situation where Stock A has declared a 10% bonus in terms of shares. The following steps are recommended to determine the Ex-Bonus price of Stock A to calculate revised free-float market capitalizations and new divisor for the next day.
Step-1: KSE100 Index = 1,120 points; KSE100 Index Free-float market capitalization = Rs.13,950,000,000; Divisor = 12,455,357; Closing Price of Stock A: Rs.22.50; Bonus: 10%
Given below is an example that calculates the Ex-bonus price based on a stock lot size of 100 shares:
- Total free-float shares after Bonus issue: 100 + (100 x 10%) = 110 shares
- Cost of stock-lot size: 100 shares x closing price of Stock A = 100 x Rs.22.50 = Rs.2,250
- Ex-Bonus Price: Rs.2,250 / 110 = Rs.20.45
10.3 Adjustment for Right Shares
The Right issues of companies that constitute the KSE100 Index are adjusted in two stages. At the first stage, the Ex-Right price is adjusted and at the second stage capital (free-float shares) is adjusted.
A company that declares Right shares must close its books (shareholders register) to determine entitlement within 30 days of its declaration. At the date of book closure, the Ex-Right price is ascertained and if the company belongs to KSE100 Index then Divisor is adjusted due to Ex-Right price of company.
When company informs Exchange that it has dispatched Letter of Rights Offer to shareholders, trading in Letter of Rights Offer (Un-paid) commences. A separate block of capital (Un-Paid-Right) is formed equal to amount of right issue and trading continues till next 30 days or till last date of payment.
After last date of payment trading in Un-Paid-Right (Letter of Rights Offer) is discontinued. By end of 30th day of last date of payment or earlier company informs that share certificates are ready for exchange with Right Allotment Letter (RAL) or credited in CDS capital of RAL is merged with company. At this stage Divisor of KSE100 Index is adjusted for increase in number of shares of company.
A) Right issue without premium: If Company A has issued 10% right shares; KSE100 Index = 1,120; KSE100 Index Free Float Market Capitalization = Rs.13,950,
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First Stage
Step 1: Determine the Ex-Right price of Stock A to calculate revised free-float market capitalization and new divisor for next day.
Stock A price: Rs.22.50
Right: 10%
For simplicity in working, we will calculate the Ex-Right price based on a lot of 100 shares.
i. Total free-float shares after Right issue: 100 shares + (100 shares x 10% Right) = 110 shares
ii. Cost of a lot (100 shares): 100 shares x market price of A + 10 right shares x par value = 100 x Rs.22.50 + 10 x Rs.10 = Rs.2,350
iii. Ex-Right price per share: Rs.2,350 / 110 = Rs.21.36
Step 2: Share price of A is adjusted after close of day to calculate New Divisor for next day.
| Stock | Shares Price (Rs) | No of Free Float Shares | Market Value (Rs) |
| --- | --- | --- | --- |
| A | 21.36 | 50,000,000 | 1,068,000,000 |
| B | 41 | 150,000,000 | 6,150,000,000 |
| C | 44.5 | 150,000,000 | 6,675,000,000 |
| **Revised Free Float Market Capitalization** | | | **13,893,000,000** |
New Divisor = Revised Free Float Market Capitalization / Index points = 13,893,000,000 / 1,120 = 12,404,464
Second Stage
After 15 days of last date of payment company confirms subscription amount and capital of RAL is merged with company and Divisor is adjusted for increase in number of free-float shares.
Step 1: Free-float shares of Stock A are adjusted after close of Day to calculate New Divisor for next day.
Stock A:
Free Float shares: Right Issue; Total Free Float shares: 50,000,000; 10%; 55,000,000
| Stock | Shares Price (Rs) | No of Free Float Shares | Market Value (Rs) |
| --- | --- | --- | --- |
| A | 22 | 55,000,000 | 1,210,000,000 |
| B | 41 | 150,000,000 | 6,150,000,000 |
| C | 44.5 | 150,000,000 | 6,675,000
New Divisor = Revised Free Float Market Capitalization / Index points = 13,948,100,000 / 1,120 = 12,453,661
11. Updation of Free Float
Listed companies submit quarterly free float to the Exchange. In line with the PSX trading system, the free float of scrips in the Index is also updated.
FAQs:
- What is KSE100 Index?
The Benchmark KSE100 Index is the most popular and most sought-after index to check the performance of the Pakistan Stock Exchange. KSE100 Index is designed to measure the performance of 100 companies which comprises the sector's largest market capitalization companies and highest market capitalization companies.
- How to calculate KSE 100 index points?
- Who owns Pakistan Stock Exchange?
- How many stocks are in Pakistan?
As on June 2023, there are 544 companies listed in PSX and the total market capitalization is Rs. 6,226.621 billion.
- What is the annual return of KSE 100?
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