What the KSE-100 actually measures
The KSE-100 is quoted everywhere, but how are its companies chosen and weighted, and what does that mean for your portfolio?
PakStockLab Team
2 Oct 2026 · 1 min read
When the news says 'the market rose today', it almost always means the KSE-100 index. Understanding how it's built tells you what that headline does and doesn't say.
A brief history
The KSE-100 was launched by the Karachi Stock Exchange in November 1991 with a base value of 1,000 points. When the Karachi, Lahore and Islamabad exchanges merged into the Pakistan Stock Exchange in January 2016, it remained the national benchmark.
How companies are selected
The index is designed to represent the whole economy, not just the largest firms. It includes the largest company by market capitalisation from each sector, and the remaining places go to the largest companies regardless of sector, subject to free-float and liquidity requirements. The composition is reviewed periodically.
How companies are weighted
The KSE-100 is weighted by free-float market capitalisation: only shares available for trading count, not those locked up with sponsors, directors or the government. Bigger, more widely held companies therefore move the index more.
Free-float market cap
Share price × Free-float shares
Why it matters
Because a handful of heavyweights in banking, energy, fertiliser and similar sectors carry large weights, the index can rise while most shares fall, or the other way round. Check market breadth (advancers vs decliners) for the full picture.
Other indices worth knowing
- KSE-30: the 30 largest and most liquid companies.
- KMI-30: 30 Shariah-compliant companies.
- KSE All Share and KMI All Share: broad indices covering all listed and all Shariah-compliant companies respectively.
Using the index as a benchmark
Comparing your portfolio's total return with the KSE-100 over the same period tells you whether your stock picking is adding value. PakStockLab's portfolio performance chart shows that comparison automatically.
This article is for general education only and is not investment advice. See our Terms of Service.