Event
NUML YOUTH LEADERS SOCIETY
Seminar
Theme
Awareness of Capital Market and Its Revival From Recession
Topic
EMERGING TRENDS & CHALLENGES IN CAPITAL MARKETS
Presentation by
Prof. Dr. Khawaja Amjad Saeed
Professor Emeritus & Founder Principal, Hailey College of Banking & Finance, University of the
Punjab, Lahore Pakistan (2003----), Member Governing Council, International Federation of
Accountants (IFAC), New York (1997-2000), President, South Asian Federation of Accountants (SAFA)
(1997), President, Institute of Cost and Management Accountants of Pakistan (1997-2000), President,
Association of Management Development Institutions of South Asia (AMDISA) (1993-96), Pro ViceChancellor University of the Punjab, Lahore (1994-1996), Founder Director, Institute of Business
Administration (IBA), University of the Punjab, Lahore (1973-1996), Senior Faculty Member, Hailey
College of Commerce, University of the Punjab, Lahore (1965-73)
1
PRESENTATION FRAME
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Concept of Capital Market
Functions and Role of Capital Market
Code of Corporate Governance: 2012
Stock Markets in Pakistan
Securities Traded on Stock Exchanges in Pakistan
Capital Market (KSE) Time Series Trend: 2005-06 to 2011-2012
KSE: Vital Facts
KSE: Pertinent Data January 2012 to June 2012
KSE Market Capitalization: June 30, 2012
A. KSE: Listed Banking Sector & Financial Services Companies
B. KSE: Listed Insurance Sector
11. KSE: Recommended Summary
12. Economist London: Market, December 08-14, 2012: Snapshot on
Pakistan
2
1. CAPITAL MARKET
CONCEPT
1) It is a market for financial assets which have a long a
indefinite maturity
2) Period over one year
3) Instruments
 Shares
 PTC
 Debenture
 Debt Instruments
 Convertibles
4) Institutions
 For LT
3
2. FUNCTIONS AND ROLE OF CAPITAL MARKET
1. Mobilization of Savings
 For economy
 For investment in productive channels
2. Capital Formation
 Net addition to the existing stock of capital in economy
 Mobilizes savings channeled in:
 Agriculture
 Industry
 Other sectors
3. Investment Awareness
 Resources for long period of time
 Earnings
 Capital appreciation
 Dividends
 Various instruments
4
2. FUNCTIONS AND ROLE OF CAPITAL MARKET
3. Investment Awareness
 Equities
 Mutual funds
 Insurance polices
4. Investment Awareness
 Enhances production and productivity in national economy
 Employment generation
 Infrastructure development
5. Regulatory Framework
 SECP
 New Code of Corporate Governance
 SEs roles
5
2. FUNCTIONS AND ROLE OF CAPITAL MARKET
6. Services
 Underwriting
 Consultancy
 Advisory
 Secretarial
7. Continuous Availability of Funds
 Liquidity
 New inflows (Pre-emptive rights)
8. Transparency
 Financial statements
 Quarterly
 Half yearly
 Annual Audit – External
9. Custodian Extension
 CDC
6
3. CODE OF CORPORATE GOVERNANCE: 2012
UK
 Cadbury Committee
 Hamphel Committee
Pakistan
 First Code 2002
 Second Code 2012
Comparative available on website of SEC
 Independent director
 Criteria for assessment of independence
 Executive directors
 Number of directors
 Board evaluation
 Office of Chairman and CEO
 Training of the board of directors
 Appointment and removal and qualification criteria for CFO and
company secretary.
 The head of internal audit
 Remuneration of directors
 Board committees
 Internal audit
7
4. STOCK MARKETS IN PAKISTAN
KSE
 September 18, 1947
 Performance review
LSE
 Before 1947
 After partition
ISE
 The Youngest
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5. SECURITIES TRADED ON STOCK EXCHANGES
IN PAKISTAN
 Shares:
A. Common, ordinary or equity
B. Preference
 Derivatives
futures and options
 Debt Instruments
Engro Rupiya
 Hybrid Instrument
PTCs (Treet Corp)
9
6. CAPITAL MARKET (KSE)
Time Series Trend: 2005-06 2011-12
Year
Listed Capital
Market Capitalization
Listed Companies on KSE
Rs. b
Rs. b
Number
2005-06
496
2,801
658
2006-07
631
4,019
658
2007-08
706
3,778
652
2008-09
782
2,121
651
2009-010
901
2,732
652
2010-11
944
3,289
639
2001-12
1,058
3,528
591
Source: NBP Economic Bulletin, Karachi September-October 2012, P. 24
10
7. KSE: VITAL FACTS
June 30, 2012
1. Number of Listed Companies
590
2. Listed Capital
Rs. 1,070b
3. Market Capitalization
Rs. 3,518b
4. Indices:
KSE 30
11,922
KSE 100
13,801
All Shares Index
9,708
5. Trading:
Volume
Value
74m
Rs. 3,038m
Source: Extracted From: KSE: Daily Quotations, 30th June, 2012.
11
8. KSE: PERTINENT DATA
January 2012 to June 2012
MONTH AT THE
CLOSE
2012
LISTED CAPITAL MARKET CAPITALIZATION
KSE 100 INDEX
Rs. b
%
Rs. B
%
100 INDEX
%
January
1,048
100
3,083
100
11,875
100
February
1,051
100
3,338
108
12,878
108
March
1,058
101
3,528
114
13,762
116
April
1,059
101
3,574
116
13,990
118
May
June
1,070
102
3,528
114
13,787
116
1,070
102
3,518
114
13,801
116
Average
1,059
101
3,428
111
13,349
112
Source: Extracted From: KSE: Daily Quotations, 30th June, 2012.
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9. KSE: MARKET CAPITALIZATION
June 30, 2012
S. NO.
SEGMENT
RS. BILLION
%
1.
Oil Gas
1,157
33
2.
Banks
753
21
3.
Chemicals
374
2,284
11
65
4.
Food Producers
417
12
5.
Personal Goods
140
04
6.
Electricity
119
676
03
19
7.
Others
558
3,518
$ 37b
16
100
Total
US$(Rs.94.59=$ 1)
30th June 2012
Source: Extracted From: KSE: Daily Quotations, 30th June, 2012.
13
10. A: KSE: LISTED BANKING SECTOR & FINANCIAL
SERVICES COMPANIES (June 30, 2012)
Quantitative Analysis
1. LISTED COMPANIES:
Particulars
KSE: Listed Companies
Listed Banks and Financial Services Companies (24+31 = 55)
2. PAID UP CAPITAL:
Particulars
Total Listed on KSE
Listed Banks and Financial Services Companies (383+29 =
412)
3. YEAR ENDING:
Particulars
1. June (0+26)
2. December (24+5)
4. PAR VALUE ANALYSIS:
Particulars
Par Value
Number
590
55
%
100
9
Rs. B
1,070
412
%
100
39
Number
26
29
55
%
54
46
100
Rs.
10
%
100
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10. A: KSE: LISTED BANKING SECTOR & FINANCIAL
SERVICES COMPANIES (June 30, 2012)
Quantitative Analysis
5. YEAR OF LISTING:
Particulars
Number
%
1978-1990 (0+03)
03
05
1991-1995 (09+12)
21
38
1996-2004 (05+06)
11
20
2005-2010 (10+09)
19
35
2010-2012 (0+01)
01
02
55
100
Rs. b
%
3,518
100
775
22
6. MARKET CAPITALIZATION:
Particulars
All Listed Shares
Listed Banks and Financial Services Companies (753+22 =
775)
15
10. A: KSE: LISTED BANKING SECTOR & FINANCIAL
SERVICES COMPANIES (June 30, 2012)
Quantitative Analysis
7. PAR VALUE ANALYSIS:
Particulars
1. Below Par
2. Par and Above Par
3. Not Traded
8. GDP SHARE:
Particulars
Pakistan GDP
KSE Listed Market Capitalization
Listed Banks and Financial Services Companies Market
Capitalization
Number
32
21
02
55
%
58
38
04
100
$b
202*
%
100
37
08
18
3.96
*www.wikipedia.org
Source: Extracted From: KSE: Daily Quotations, 30th June, 2012
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10. B: KSE: LISTED INSURANCE SECTOR
June 30, 2012
Quantitative Analysis
1. LISTED COMPANIES
Particulars
Number
KSE Listed Companies
590
Listed Insurance Companies
26
(22 Non Life + Life 04=26)
2. Paid up Capital
Particulars
Rs. (Billion)
Total Listed on KSE
1,070
Listed Insurance Companies
16
3. Year Ending (December)
4. Par Value Analysis
Particulars
Rs.
Number
Paid up Value (Par Value)
10
24
05
02
26
%
100
4.41
%
100
1.50
%
95
05
100
17
10. B: KSE: LISTED INSURANCE SECTOR
June 30, 2012
Quantitative Analysis
5. YEAR
OF
LISTING
Year
1949
1952-1969
1980-1989
1990-2011
Total
Number
02
09
05
16
10
26
6. MARKET CAPITALIZATION
Particulars
Rs. (Billion)
All Listed Shares
3,518
Listed Insurance Companies
63
7. PAR VALUE ANALYSIS
Particulars
Number
Par & Above Par
16
Below Par
10
Total
26
%
08
35
19
62
38
100
%
100
1.79
%
62
38
100
18
10. B: KSE: LISTED INSURANCE SECTOR
June 30, 2012
Quantitative Analysis
8. GDP SHARE
Particulars
Pakistan GDP
KSE Listed Market
Capitalization
Listed Insurance Companies
Market Capitalization
$ (Billion)
202*
37
%
100
18
0.67
0.33
* www.wikipedia.org
Source: Extracted From: KSE: Daily Quotations, 30th June 2012.
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11. KSE: RECOMMENDED SUMMARY
Stratified Approach
Sectors Suggested
S. No.
Sector
Number of Companies
1.
E&P
3
2.
Banks
5
3.
Fertilizers
2
4.
Cement
4
5.
Oil Marketing
2
6.
Autos
2
7.
Power
4
8.
Gas, Water and Multi
Utilities
1
9.
Textiles
1
10.
Chemical
2
11.
Fixed Line Telecom
1
Total
27
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12. ECONOMIST LONDON: MARKETS
December 8-14, 2012
Pakistan (KSE)
 Change on December 31st 2011
 In Local currency
% change
+ 47.0
 In $ Terms
+ 36.7
 Index December 05, 2012
 16,675.7
 1.5 Plus on week basis
Source: Economist London, December 8-14, 2012, P. 85.
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