Karachi Stock Exchange (KSE) has adopted Industry Classification Benchmark (ICB), a jointly developed classification system launched by FTSE Group and Dow Jones Indexes. Reportedly, it aims to classify and analyse specific sectors of the Pakistan stock market using internationally accepted standards.
It has been reported that the ICB provides a system with four levels of granularity- industry (10), super sectors (19), sectors (41) and sub-sectors (114) and facilitates cross-border company comparison. ICB will replace KSE’s own classification system after a transition period in which KSE will run both classification systems parallel to allow a smooth adoption process.
James Cemprola, managing director of ICB, said: “By adopting well-established global standards like ICB, upcoming financial markets can strengthen their transparency, comparability and hence draw the attention of international market participants. The ICB is a relevant, clear, strictly rules-based and accurate system which is designed to meet the needs of sophisticated investors. We are pleased that financial institutions in emerging Asia such as the Karachi Stock Exchange are choosing ICB to assist them in bringing their services in line with practices of the global investment community.”
ICB is the standard used by major stock exchanges, data distributors, index providers, buy side and sell side institutions, custodians and media organizations globally. KSE joins other exchanges and global financial institutions which have integrated ICB into their research, trading and investment workflows. These include NASDAQ, NYSE/Euronext, the London Stock Exchange, the Swiss Exchange, Aegon, the International Monetary Fund and the World Economic Forum.
