02-15-2005, 05:26 AM
Hi,
hmm its interesting to see a bit of buzz about the stock market here. The stock marktet Index (7300 points for example) you are talking about, basically tells u how the stock "market" is generally performing at any given time relative to a base "year" or time. So for example, lets say we start a stock market today (14th Feb), we will start it at 100 index points. Now tommorow if all the stocks in my stock exchange went up by 5% my index will go up to 105. If all stocks go down, it will go to 95. Thus basically, this index tells u how the market is performing RIGHT NOW relative to a certain base "time". Thus, an index number of 7300 shows that there is a lot of buzzing going around in the stock market. BUT BEWARE this is a VERY VERY simplified version of all this.
What u gotta understand is that this INDEX is quite MISLEADING in the case of KSE. Firstly, the weightage system of this INDEX has became outdated. So for example, if PTCL, OGDC etc went up & ALL OTHER STOCKS went down, the INDEX will still show a positive gain becoz of their higher weightage.
Secondly, the current stock drive is pure SPECULATION driven by utter madness !!!!! Your economy doesnt improve JUST OVERNIGHT & the increases in the stock market are completely ubsurd. To put it simply, the media creates a lot of hype, the rulers enjoy some publicity, the commom man comes under the impression that its the perfect time to invest. So he invests. In the end, the stock market CRASHES one day (when all the old boys have made their money). So, I will advise u to be cautious when entering the current stock market because its all driven by speculation & SATTA.
hmm its interesting to see a bit of buzz about the stock market here. The stock marktet Index (7300 points for example) you are talking about, basically tells u how the stock "market" is generally performing at any given time relative to a base "year" or time. So for example, lets say we start a stock market today (14th Feb), we will start it at 100 index points. Now tommorow if all the stocks in my stock exchange went up by 5% my index will go up to 105. If all stocks go down, it will go to 95. Thus basically, this index tells u how the market is performing RIGHT NOW relative to a certain base "time". Thus, an index number of 7300 shows that there is a lot of buzzing going around in the stock market. BUT BEWARE this is a VERY VERY simplified version of all this.
What u gotta understand is that this INDEX is quite MISLEADING in the case of KSE. Firstly, the weightage system of this INDEX has became outdated. So for example, if PTCL, OGDC etc went up & ALL OTHER STOCKS went down, the INDEX will still show a positive gain becoz of their higher weightage.
Secondly, the current stock drive is pure SPECULATION driven by utter madness !!!!! Your economy doesnt improve JUST OVERNIGHT & the increases in the stock market are completely ubsurd. To put it simply, the media creates a lot of hype, the rulers enjoy some publicity, the commom man comes under the impression that its the perfect time to invest. So he invests. In the end, the stock market CRASHES one day (when all the old boys have made their money). So, I will advise u to be cautious when entering the current stock market because its all driven by speculation & SATTA.
