The KSE-100 is the Pakistan Stock Exchange benchmark. It tracks 100 listed companies, weighted by free-float market capitalisation, and it started in November 1991 at a base value of 1,000 points. A rise in the index does not mean every PSX share rose, or that shares rose by the same percentage.
This guide covers what the index measures, how PSX calculates it, when its membership changes, and how to read a daily move without over-reading it. For the current level and constituent movers, open the KSE-100 index dashboard. For the wider session routine around it, see the complete KseAlert guide to tracking Pakistan Stock Exchange markets.
What the index represents
PSX selects the 100 constituents by sector representation and free-float market capitalisation. The top company in each listed sector qualifies first, measured by largest free-float capitalisation, with Open-End Mutual Funds and Exchange Traded Funds excluded. PSX then fills the remaining places with the largest free-float companies in descending order, regardless of sector. Together those 100 companies cover roughly 70% to 80% of the total free-float capitalisation of all companies listed on the Exchange.
Free float is the part of a company's shares available for trading, so it excludes locked-in and strategic holdings. PSX moved the index from full market capitalisation to free-float capitalisation in 2012, calculating both in parallel from 11 June 2012 before the free-float version took effect on 15 October 2012. The practical consequence for investors is that a company's influence on the index depends on its tradable shares, not its total issued capital.
Larger-weight companies therefore move the index more than smaller ones. Composition also changes over time through periodic reviews, corporate actions, and eligibility rules.
How the KSE-100 is calculated
PSX divides the combined free-float market capitalisation of the 100 constituents by a figure called the Index Divisor. The divisor is the only link back to the November 1991 base period, and it keeps the series comparable across decades of listings, delistings, and corporate actions.
When a constituent goes ex-dividend, issues bonus shares, or completes a rights issue, PSX recalculates the divisor so the corporate action itself does not create a phantom index move. The brochure works an example: with free-float capitalisation of Rs 13,950,000,000 and the index at 1,120 points, the divisor is 12,455,357. After a constituent's price adjusts for a cash dividend, the revised capitalisation of Rs 13,900,000,000 produces a new divisor of 12,410,714, and the index level holds at 1,120 rather than dropping on a payout. Divisor changes for corporate actions are calculated at the end of the third working day before the book-closure start date.
The divisor absorbs corporate actions on the index side, while your portfolio records the cash dividend as income and the ex-date price drop as a mark-down. Those two treatments are why a dividend-heavy month can look flat on the benchmark and uneven in your own statement.
KSE-100 versus KSE-100 PR
PSX publishes two variants of the same 100 companies, and mixing them up distorts any long-run comparison.
- KSE-100 is a total return index. Dividends, bonuses, rights, and other corporate actions are adjusted in the constituents. Base period November 1991 at 1,000 points.
- KSE-100 PR is the price return index. It reflects capital appreciation only, and gross cash dividends are not adjusted in the constituents. Base period 1 April 2009 at 6,931 points, calculated back-dated from that start.
Because the total return version credits dividends and the price return version does not, the two series drift apart over years rather than days. If you benchmark a dividend-paying PSX portfolio, compare total return against the KSE-100 and price-only performance against the KSE-100 PR. Headlines quoting "the KSE-100" almost always mean the total return index.
Why index points move
When constituent prices change, their weighted contribution changes the index. A strong move in a few influential shares can lift or lower the benchmark even when many other stocks move differently. That is why index direction should be read with market breadth, sector performance, volume, and individual constituent data.
Index points versus percentage change
Points describe the numerical change in the index level. Percentage change places that move relative to the previous reference level, making comparisons across days and periods easier. Always confirm the timestamp, session status, and whether the displayed value is live or delayed.
Why your portfolio can differ
Your portfolio may hold different companies and weights, include cash, receive dividends, and incur transaction costs. It therefore should not be expected to match the KSE-100. Use the benchmark as context, not as a substitute for measuring your actual positions and total return.
Use breadth and sector context
Advancers, decliners, unchanged shares, sector performance, turnover, and top contributors show whether an index move is broad or concentrated. KseAlert's PSX index dashboard and live market page provide this supporting context, including the most active constituents in the latest session.
Compare other PSX indices
Different indices answer different questions because their constituent and weighting rules vary. Three comparisons are worth making regularly:
- KSE-30 tracks 30 liquid large caps, so single-stock moves shift it more than the KSE-100.
- KSE All Share includes every eligible listed company, which makes it the better read on whether a rally is broad or confined to heavyweights.
- KMI-30 and KMI All Share cover Shariah-screened companies, so they can diverge from the KSE-100 when conventional banks lead or lag.
Read the current official methodology before making technical assumptions about any of them.
A hypothetical breadth example
Imagine that a small group of high-weight constituents rises strongly while most smaller shares are unchanged or lower. The KSE-100 can finish positive because the weighted contribution of the large companies exceeds the drag from the rest. An investor holding equal amounts across many smaller companies could still record a negative day.
This is why a useful market summary combines index points and percentage change with advancing and declining shares, sector returns, traded value, volume, and the largest positive and negative contributors. Index direction answers "what happened to the benchmark"; breadth helps answer "how widely was that move shared?"
When constituents change
PSX recomposes the KSE-100 and KSE-100 PR twice a year on a published calendar:
- Data basis is the last working day of February, notice is issued on 15 March, and the change takes effect on the first working day of April.
- Data basis is the last working day of August, notice is issued on 15 September, and the change takes effect on the first working day of October.
If a notice date falls on a holiday, PSX issues it on the next working day. Between reviews, free-float changes, corporate actions, new listings, and eligibility rules can still alter exposure. Historical comparisons should use the methodology and constituent set relevant to each period, and when accuracy matters, consult the latest official PSX index brochure or notice rather than an old list copied by another website.
Use the index as a benchmark
- Choose a comparison period that matches the portfolio measurement period.
- Include dividends consistently when comparing total return, and match the variant: KSE-100 for total return, KSE-100 PR for price only.
- Account for cash, fees, taxes, deposits, and withdrawals in portfolio calculations.
- Consider whether another PSX index better represents the portfolio universe.
- Explain large differences through holdings and weights before calling them skill or failure.
Check the current level and the constituents driving it on the KSE-100 index page, then set an index alert if you want a notification when the benchmark crosses a level that changes your plan.