Daily Times

KARACHI: The Pakistani Stock Exchange (PSX) has re-composed its benchmark KSE-100 Index, replacing five companies on the basis of their market capitalisation and sector value, according to a notification on Wednesday.

According to the notice, the benchmark index has been recomposed as per the free-float methodology based on the March-August 2018 review period and will be effective with effect from October 1, 2018.

As a result of the latest reshuffling in the KSE 100-Share Index, five new companies have joined the index on the basis of their market capitalisation, including Gatron Industries Limited, Shakarganj Limited, Byco Petroleum Limited, Glaxo Smith Kline Consumer Health Care Limited and Aisha Steels Mills Limited.

On the sector-based rule, Ibrahim Fibres Limited and JDW Sugar Limited were excluded from the KSE-100 Shares Index.

On market capitalisation-based rule, three companies, including Crescent Steel & Allied Products Limited, were excluded.

Traditionally, the largest company in terms of market capitalisation from each of the 33 sectors, except open-ended mutual funds sector, was included in the KSE 100-Share Index, while the remaining 68 companies were selected on the basis of overall market capitalisation in descending order.

But post-October 15, 2012, the KSE-100 Index is calculated on the basis of free-float market capitalisation of companies instead of full market capitalisation.

This has made the benchmark index more representative of the actual performance of the stock market, as the free-float methodology takes into account only that proportion of total shares issued by a company that are readily available for trading on the exchange.

Published in Daily Times, September 20^th 2018.