Free-float market cap KSE-100 index from October 15

16 companies shown the exit over low market capitalisation.

KARACHI: On the recommendations of Index Expert Committee, the governing board of directors of the Karachi Stock Exchange (KSE) in a meeting held on April 24, 2012 decided to implement the index on the basis of free-float market capitalisation method, said a KSE notice. The index will be implemented from October 15, 2012.

The free-float method is seen as a better way of calculating market capitalisation because it provides a more accurate reflection of market movements. The methodology had been adopted by most of the world’s major indexes, including the Dow Jones Industrial Average and the Standard & Poor’s 500.

It was also decided that the rules for composition and re-composition of the index based on free-float methodology shall remain unchanged other than selection of companies on the basis of free-float market capitalisation as against total market capitalisation.

In line with the above, the exercise of composition of companies in the KSE-100 index on the basis of free-float market capitalisation has been carried out as per the closing prices of shares as on August 31, 2012.

16 companies will be affected due to the migration, as under:

Published in The Express Tribune, October 2^nd, 2012.