The profit after tax of Karachi Stock Exchange (KSE) in the financial year 2010 (FY10) declined by a massive 78.3 percent, to Rs 68.094 million, as compared to Rs 314.085 million earned last year. According to KSE annual report, issued here on Monday, the profit after tax of the exchange was Rs 771.728 million a year back, in FY08.
The report shows that KSE total income declined to Rs 730.555 million in FY10 against Rs 913.641 million in FY09, and Rs 1,715.617 million in FY08. The income from listing increased to Rs 137.244 million, against Rs 111.649 million, and income from operations declined to Rs 182.889 million, against Rs 192.550 million. No management fee was earned this year, against Rs 55.622 million earned in this account last year.
Total expenses of the exchange, on the other hand, increased to Rs 692.225 million in FY10 as compared to Rs 534.716 million in FY09 and Rs 715.472 million in FY08. Administrative expenses increased to Rs 614.902 million against Rs 502.759 million, while financial and other charges reduced to Rs 21.701 million against Rs 31.957 million. An amount of Rs 55.622 million was paid as reversal of management fee this year.
The profit before taxation stood at Rs 38.330 million in FY10 as compared to Rs 378.925 million in FY09 and Rs 1,000.145 million in FY08. The annual report shows that the reserves slightly increased to Rs 3.051 billion in FY10 against Rs 2.984 billion in FY09, long-term liabilities reduced to Rs 247.208 million against Rs 261.485 million. However, current liabilities increased to Rs 1,319.723 million against Rs 621.011 million.
Fixed assets increased to Rs 521.825 million against Rs 466.325 million, other long-term assets declined to Rs 852.875 million against Rs 869.815 million while current assets increased to Rs 3.243 billion against Rs 2.530 billion.
The net profit margin of the exchange declined to 9 percent in FY10 against 34 percent in FY09 and 45 percent in FY08 while expenses as a percentage of revenue increased to 95 percent in this year against 59 percent a year back and profit before tax as a percentage of revenue declined to 5 percent against 41 percent.
The benchmark KSE-100 index increased by 35.7 percent this year and closed at the level of 9,721.91 points, 2559.73 points up from previous year's closing of 7,162.18 points. The index hit high level of 10,677.47 points and low level of 7270.72 points during the financial year FY10.
Market capitalisation increased by 28 percent to Rs 2.732 trillion from Rs 2.121 trillion. The number of total listed companies slightly increased to 652 in FY10 against 651 in FY09. The numbers of new listing were not encouraging as only 8 new IPO witnessed in FY10.
During the year, the KSE introduced various new products and services. The report said that the KSE introduced a new pool of liquidity by launching BATS (Bond Automated Trading System), as it helped corporate and retail investors to trade corporate and commercial papers through an online and efficient price discovery mechanism. The BATS was launched in November 2009 and initially the platform is being used to trade debt securities listed on KSE, however the plan is to include all public debt instruments and privately placed debt securities as well. Moreover, National Saving Bond - country's first bond tradable at stock exchanges--was launched by Central Directorate of National Savings. The bond was issued for period of 3, 5 and 10 years, with the main objective to attract small savers of the country.
The report said that the KSE is now ICB-compliant, as it recomposed its sectors on the basis of methodology which is jointly developed by FTSE and Dow Jones. The KSE has now joined over 70 exchanges world-wide which integrate ICB into their research, trading and investment workflows.
The KSE also launched 7 days' cash settled futures during this financial year. The KSE also signed an agreement with Ora-Tech Systems for implementation of Oracle Financials. The report said that successful implementation of the new financial system was achieved to significantly enhance internal financial controls.