Abstract:
This study examines the behavior of the stock returns in
Karachi Stock
monthly stock
from July 1st
Exchange
prices of
1999 to
(KSE-100) The data
16 companies covering
March 31st 2 004. The
consists of
the period
results of
Descriptive Statistics (Skewness and Kurtosis for
normality) and non parametric (run and Kolmogrov- Smirnov
tests) provide evidence that all of the companies except
one are weak form efficient . So the null hypothesis of weak
form efficiency was accepted at 5% level of significance.
The result of this study might be very surprising as
Karachi Stock Exchange is not a new market but it is a thin
trading market i . e . majority of trading is done only in 30
-40 stocks which are blue ships companies that is why most
of the runs don't have significant difference between them.
These companies react to the information very slowly . Many
essential steps have already been taken by authorities to
improve the operating and pricing efficiency of Karachi
Stock Market. The KSE needs to be studied further with
longer stock prices and other tests to test the efficiency
of the market to see the affects of different policies,
reforms ; IPO's and stable government on the stocks
