Major Indices

  • Karachi Stock Exchange KSE100 index comprises of 100 companies representing approximately 88% of market capitalization
  • KSE30 Index comprises of 30 companies. Index is free float based with review  every quarter

Market Hours

Monday – Thursday:

  • Orders CANNOT be altered or modified once entered till continuous trading begins
  • Continuous Trading (9:30AM to 3:30PM): The market trades continuously on a price/time priority basis

Friday:

  • First Session Pre-Opening (9:00AM to 9:15AM): Orders CANNOT be altered or modified once entered till continuous trading
  • First Session Continuous Trading (9:15AM to 12Noon): The market trades continuously on a price/time priority basis
  • Second Session Pre-Opening (2:15PM to 2:30PM): Orders CANNOT be altered or modified once entered till continuous trading
  • Second Session Continuous Trading (2:30PM to 4:30PM): The market trades continuously on a price/time priority basis

Circuit Breakers

  • Stock wise price movement limit of 5% both ways

Round Lot sizes

  • Minimum tradable LOT size is ONE share

Settlement & Transfer

  • Settlements happen through the stock exchange clearing house Delivery versus payment DVP and are onward settled with the respective custodian bank
  • T+2 settlement cycle
  • SPOT i.e. T+1 (in case of corporate action). ALL trades are settled DVP through the Karachi Stock Exchange Clearing House

Buy in Rules

  • In case of non-delivery the exchange calls for buy-in and costs are borne by the respective client. For liquid stocks, broker can arrange shares for the market to avoid FAILED trade. In case of illiquid shares, Failed trades are sent by the exchange to Square Up Market. Price difference and other charges are borne by the client

Foreign Currency Access

  • Foreign investors are allowed to trade in Pakistan Equity market by routing their funds through a Special Convertible Rupee Account (SCRA) with State Bank of Pakistan which allows full convertibility and one can buy/sell and route dividends through this account via custodian bank

Tax

  • Federal Excise Duty @ 16% on Brokerage charges
  • With-holding tax: 1bps of Value traded on SELL trades only
  • Capital Gains Tax CGT will be charged effective July 1st 2010

Rate of tax on gains:

  • 10% of gains on holdings less than Six months
  • 7.5% of gains on holdings of Six months to 12 months
  • All holdings above 12 months will be exempt of any gains tax

Corporates including FII’s will be required to file quarterly tax statement along with advance tax within seven days of quarter end. Advance tax will charged as:

  • 2% of gains on holdings less than Six months
  • 1.5% of gains on holdings of six months to 12 months

Capital losses to be adjusted on same tax year and cannot be carried forward.
FIFO method to be used for price calculation on multiple holding periods in the same name.

Futures & other Products

  • Contract size is min. 500 shares marketable lot
  • No SWAPS
  • Exchange currently working on introducing SWAPS and Index Futures
  • Single stock futures contract for 7 Day and 30 Day settlements

Trading & Execution

  • FIX/DMA via Mixit Inc. USA
  • Bloomberg access
  • Program trading orders executable
  • Automated trading systems called KATS where orders are placed and executed by brokers

Restrictions

  • Short Sell: Conditional Short selling in regular market is allowed using a special window (F8) and client has to inform the broker before trades. Conditions include pre-existing interest and prior written agreement. Blank selling is allowed only in Deliverable Futures Market
  • Crossing: Crossing will be done through Negotiated Deal Market (NDM) which is available on KATS and can be done during trading times and goes on until 5:00 pm.
  • Block Trading: Trades can be split and amalgamated on trade date before 17:00 Pakistan time. Splits and amalgamations can be done at your request on trade date before 17:00hrs
  • Foreign Ownership Restrictions: There are no foreign ownership limits. Only reporting requirement for ALL investors once holding exceeds 10% of free float

 

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