Pakistan is one of the most populous countries in the world. Hence, it has the potential to become a superpower in the future. For those interested in investing in Pakistan, we will analyze its most important stock market indices.
Pakistan is a country with almost 250 million people and very young demographics. Consequently, its population will continue to grow over the coming decades. And it will become one of the most populous countries in the world.
If it can grow its economy at the same time, Pakistan may well become one of the global superpowers of the second half of the 21st century. This could happen at the same time that its neighbor India becomes the world’s largest economy. The Indian subcontinent will be an increasingly important region.
Although Pakistan is still a fairly poor country, its economy grows every year, leading to improvements in the standard of living of the population. As Pakistan becomes more industrialized, its exports to the rest of the world will increase.
The currency of Pakistan is the Pakistani rupee, which can be found under the code PKR in international financial markets. It is a relatively unstable currency, as inflation rates in the country tend to be high.
The country’s main stock exchange is located in its capital, Karachi. It is known as both Karachi Stock Exchange and Pakistan Stock Exchange. And it also calculates several stock market indexes.
For those interested in investing in Pakistan passively through an ETF, we analyze its most important stock market indices.
The KSE 100 is the main stock market index of the Karachi Stock Exchange. It is composed of the 100 largest companies listed in the country. As a result, it is a very diverse and broad index, and a great indicator of how well large and medium-sized corporations are performing.
These 100 companies are weighted based on their free-float-adjusted market capitalization, with the largest tending to dominate the index’s movements. It should be noted that there are no caps on the weight that a stock can have within the index.
Together, these 100 companies account for approximately 85% of the market capitalization of all listed companies in Pakistan.
Additional information about the KSE 100 can be found on the official website of the Pakistan Stock Exchange.
The KSE 30 is another stock market index calculated and published by the Pakistan Stock Exchange. It is very similar to the KSE 100. In fact, the only difference between these two indices is the number of companies that we can find in them.
Thus, the KSE 30 is composed of only the 30 largest companies in Pakistan, so it is a very good alternative if we want to focus exclusively on the main corporations in the country.
Additional details can be found on the Karachi Stock Exchange website.
Finally, the MSCI Pakistan is a stock market index calculated by the US company MSCI. The number of stocks within the index is not constant, but fluctuates over time.
Thus, the MSCI Pakistan includes all Pakistani companies that are part of the global MSCI Emerging Markets index.
This index weights stocks based on their free-float-adjusted market capitalization. And updates are carried out regularly throughout the year with the aim of keeping it representative of emerging stock markets in general, and Pakistan in particular.
However, due to the relatively small market capitalization of Pakistani corporations compared to corporations in other emerging countries such as China, India, Taiwan, South Korea or Brazil, the MSCI Pakistan has a very small number of companies in it. Hence, it may not be the best alternative to invest passively in the country.
Additional details on the MSCI Pakistan can be found on the MSCI website.
I hope you found this information about Pakistan´s stock market indices useful. To learn about stock indices in other promising countries, visit the following section:
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