Measuring the Performance of KSE100: The Impact of Demutualization

Abstract

The purpose of this study is to assess how the demutualization process has affected the performance of the KSE100 Benchmark Index. The study utilized Descriptive Statistics and a Paired sample t-test, as well as daily data from KSE-100 spanning 2009 to 2019. This data was analysed in terms of market capitalization, traded value, daily stock returns, and trading volume. Our results show that, overall, market capitalization increased significantly during the period, except in the second phase. Daily stock returns for the KSE100 Index did not improve over the entire period, though the decrease was not statistically significant. Trading volume did not improve and decreased significantly in both the first and second phases, but increased after the listing of the Pakistan Stock Exchange on its own exchange. The overall conclusion is that the performance of the Index improved, which is a crucial finding for foreign investors looking to invest in the Pakistani stock market. The study is also significant for institutional investors, local investors, potential investors, and portfolio managers who are interested in the growth and development of the stock market. This study is a valuable addition to existing literature, as a significant portion of the existing literature on the demutualization of the Pakistan Stock Exchange is qualitative.