PAKISTAN STOCK

EXCHANGE
Muneeb Ali Ayesha Malik
Kainat Sehar
Ahmad Javed
Adeel Hameed
Stock Exchange
■ Organized and regulated financial market
where securities (bonds, notes, shares) are
bought and sold at prices governed by the
forces of demand and supply.

■ The Pakistan Stock Exchange is a stock

exchange in Pakistan with trading floors in
Karachi, Islamabad and Lahore where the
buying, selling, and issuance of shares of
publicly held companies take place.
History of stock exchange in Pakistan:
Karachi stock exchange:
■ KSE was established on September 18, 1947. It was incorporated on March 10, 1949
■ Only five companies were initially listed with a total paid-up capital of 37 million rupees.
■ The first index introduced in KSE was based on fifty companies and was called KSE 50 index.
■ Computerized trading system called Karachi Automated Trading System (KATS) was introduced in 2002
Lahore stock exchange:
■ In 1970, Established under the Exchange Ordinance of 1969 by the Government of Pakistan.
■ In response to the needs of the provincial metropolis of the province of Punjab.
■ It initially had 83 members and was housed in a rented building in the crowded Bank Square area of Lahore
■ The LSE was the first stock exchange in Pakistan to use the internet.
Islamabad stock exchange:
■ Established in Islamabad, the capital city of Pakistan on October 25, 1989.
■ To cater to the needs of less developed areas of the northern part of Pakistan.
■ It was licensed as a stock exchange on January 7, 1992.
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Pakistan stock exchange:
■ All these three exchanges had separate management, trading interfaces, indexes, listing
criteria etc.
■ This structure inherently created conflict of interest and perceived to jeopardize the
investors' interest.
■ Therefore, the Stock Exchanges Act, 2012 (known as "Demutualization Act") was
promulgated by the Government. As a result, three exchanges were merged together to
form a new combined exchange called Pakistan.
■ As on October 7th, 2016 there are 576 companies listed in PSX and the total market
capitalization is Rs. 8,384.864 billion.
Types of Securities at Stock Exchange
■ Ordinary shares of listed Companies

■ Unit trust Schemes

■ Mutual funds certifications

■ Bonds

■ Government securities
Types of Bonds
■ Treasury bonds.
■ Investment-grade corporate bonds.
■ Foreign bonds.
■ Mortgage-backed bonds.
■ Municipal bonds.
Types Of Bonds In PSX
■ PIBs (Pakistan Investment Bonds)
■ Treasury Bills
■ National Savings Bonds
■ Islamic Ijarah Sukuks
What Is An Index
■ An index is a group or basket of securities, derivatives, or other financial instruments
that represents and measures the performance of a specific market, asset class, market
■ A stock market index shows how investors feel an economy is faring. An index collects
data from a variety of companies across industries. Together, that data forms a picture
that helps investors compare current price levels with past prices to calculate market
performance. Sector, or investment strategy.
Indexes in Pakistan stock exchange
■ KSE 100 Index
■ KSE All Share Index
■ KSE 30 Index
■ PSX-KMI All Shares Index
■ KMI 30 Index
■ BKTI (Banking Sector Tradable Index)
■ OGTI (Oil and Gas Tradable Sector Index )
■ NITPG Index (NIT Pakistan gateway index)
■ UPP9 Index (UBL Pakistan enterprise index)
■ MZNPI Index (Meezan Pakistan index )
■ NBPPGI Index (NBP Pakistan growth index )
Types of Market
Primary Market
■ The Primary market for Common Stock
■ Initial Public Offering
■ Underwriter
Secondary Market
■ Directly with other investors,
■ Indirectly through a broker who arranges transactions for others, or
■ Directly with a dealer who buys and sells securities from inventory
Stockbroker
■ Link to the market

■ Help us to get the best price available for the stock

■ Middlemen

■ Member of stock exchange

Types Of Broker
■ Discount broker
■ Full service broker
■ Forex broker
■ Dealer
Broker And Online Trading

Opening an Account
■ Different terms and conditions
■ Wide range of minimum deposits
■ Preferred the investor gives instructions to transact in the account
Commission and fee
■ Different prices charged by different brokers
■ Price is indicative of service
■ Full service brokers charges more
What are shares

■ Small stake in equity

■ Price can rise or fall
■ Two types of shares
1. Preferred share
2. Common shares
Preferred Shares
■ Preference as to dividends
■ Accumulation of dividends
■ Participation in excess of stated dividend rate
■ Convertibility into common stock
■ Call ability by the corporation
■ Redemption at future maturity date (see the previous discussion of redeemable preferred
stock)
■ Preference in liquidation
Common Stock
■ Voting Rights
■ Capital Gains and Dividends
■ Limited Liability
■ Liquidity
■ Easily purchasable from any trading platform
Products Of PSX
■ Equity
■ Fixed Income
■ Derivatives
■ Exchange Traded Funds (ETFs)
■ Margin Trading System (MTSs)
Why does company issue shares
■ New finance
■ An exit for founding investors who want to realize their investment
■ A mechanism for investors to trade shares
■ A market valuation for the company
■ An incentive for staff using shares or share options
■ An acquisition currency in the form of shares
■ A way to raise your business' profile
Why do investors buy shares
■ Capital Growth
■ Dividends
■ Liquidity
■ Shareholder Benefits
Different Values Of Shares
■ Face or Par Value
■ Book Value
■ Market Value
■ Fair Value
■ Net Asset Value
■ Break up Value
Types Of Trading At Stock Exchange

■ Day trading (short-term Investment)

■ Active Trading (Medium-term Investment)
■ Long Term Investment
PSX Trading Services

■ KATS (Karachi Automated Trading System)

■ KITS (Karachi Internet Trading System)
■ BATS (Bonds Automated Trading System)
Central Depository Company

■ The main function of CDC is to operate and maintain the Central Depository System
(CDS)
■ Electronic book-entry system used to record and maintain securities and to register the
transfer of securities.
■ The system changes the ownership of securities without any physical movement or
endorsement of certificates and execution of transfer instruments.
■ CDC is the sole entity handling the electronic (paperless) settlement of transactions
carried out at the Pakistan Stock Exchange.
■ CDS facilitates equity, debt and other financial instruments in the Pakistani Capital
Market.
■ It manages Ordinary & Preference shares, TFCs, WAPDA Bonds, Sukuk, Open-End &
Closed-End funds and Modaraba Certificates