The LSE-25 index posted an increase of 39 percent in the year 2004, rising from 2,034 at the end of 2002-2003 to the level of 2,828 as on June 30, 2004, with touching the highest level of 3133 on April 19, 2004. This, according to annual report of the LSE for the year 2004, was accompanied by spectacular growth in total number of shares traded on LSE by 47 percent over the previous year. Market capitalisation increased by 87 percent from Rs 751 billion to Rs 1,406 billion at the year-end. Likewise, listed capital increased by 29 percent from Rs 280 billion to Rs 361 billion over the same period.
Moreover, 19 new companies and 3 additional Term Finance Certificates (TFCs) were listed at the exchange during the year under review. Low interest environment and excess liquidity have been key drivers for the market during the year under review, the report added.
The total income of the exchange also rose to 127.124 million in the year 2004 from Rs 109.845 million in 2003 registering an increase of 15.7 percent. The annual listing fee of the exchange was Rs 20.115 million as compared to Rs 18.584 million of the previous year, showing an increment of 8 percent that is reflective of recovery efforts of by the management.
Automated trading rose by 72 percent from Rs 19.381 million to Rs 33.355 million. Moreover, according to the report, exchange's expenditure for the year under reference was Rs 70.110 million as compared to Rs 55.923 million of the last year.
The key initiatives taken during the year 2004 included introduction of system audit regulations by which the system of audit of LSE members was made compulsory.
This, according to the report, would ensure that LSE members comply with the laws regulating the trading in the securities market. Being a frontline regulator, LSE also continued with its efforts to provide a transparent and efficient market.
The LSE also remained in the forefront with regard to meeting the automation and IT requirements of the securities market. Having successfully develop and implemented the trading system, its IT department developed a comprehensive Internet trading software, branded as 'Broker Net', for marketing. In order to maintain its competitive edge, the exchange continued to invest in enhancement of IT infrastructure as well as its human resource requirements for the overall benefit of the members and investors.
Now LSE Internet trading has increased to over 50 percent of the total volume. Ultra trading has been made more robust with introduction of a very high speed and more stable middle-ware, which is optimised for internet trading terminals and is able to support thousands of terminals over the internet.
On January 19, 2004, clearing and settlement operations of LSE were switched over to the National Clearing Company of Pakistan Limited (NCCPL). Now LSE is left with the types of settlements like physical shares, interim settlements of futures contracts and provisionally listed companies.
The report further said that in line with LSE's strategy of increasing its geographical reach using state of the art technology, it also took lead in establishing its presence in other cities of Punjab.
Its first office outside Lahore started operations in Faisalabad. The exchange also plans to establish its trading floors in other big cities of the province like Sialkot and Multan.