PAKISTAN STOCK

EXCHANGE
To B e c o m e A n O w n e r O f E v e r y
C o m p a n y I n T h e Wo r l d
PAKISTAN STOCK EXCHANGE

Pakistan Stock Exchange Limited is a company which offers

share of those companies which are listed on PSX for the
sake of investment for their companies. This process is
called IPO (Initial Public Offering). Those shares ensure us
that are partially partner in that company.

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CENTRAL DEPOSITORY
COMPANY
Central Depository Company is a depository company
which keeps shares of companies and also keep record of
who is selling or buying shares. It keep all trading records
happening in PSX. Because PSX or broker can’t save shares
to themselves as it is conflict of interest and public will also
not trust on both of them. It is approved from SECP(Security
and Exchange Commission of Pakistan) and GOVT Of
Pakistan.

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 NATIONAL CLEARING COMPANY
OF PAKISTAN (NCCPL)

National Clearing Company Of Pakistan is a company

which look after the safe and secure transaction between
seller and buyer.

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 TYPES OF ACCOUNTS
1. Trading Account : We open this account to our broker to get direct
access to PSX. We can buy or sell shares from this account.

2. CDC Sub Account : We open this account for daily trading. In this
type of account, we don’t have full control to sell our buy share. Our
broker can also sell and buy share on our behalf.

3. CDC Investor Account : We open this account to trade on long term

base. And we have full control of this account.

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 TYPES OF INVESTMENT IN
STOCK MARKET
1. Intraday Trading:

A type of investment in which investor buy and sell share with in the same
day. Such that the all the share sold before market closed.

2. Delivery Trading:

A type of investment in which we hold shares on long-term and all the

trade will be done in 3 working days.

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 BENEFITS OF BUYING
SHARES

1. Capital Gains :

The profit generated after selling a share on higher price as compare to the
price when we bought it.

2. Dividends :

A percentage of profit given by a company to its shareholders on regular

basis.

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 USEFUL TERMS IN PSX
 Promoter:

Promoter’s is the founder of a business. It could be one or more.

 Face value:
Suppose, Five persons started a business with the contribution 100000Rs by each
promoter. For the proof, they will receive shares of that company. Than they decide a
face value of company i.e 10Rs is the price of a share. Now the total shares will be
50000 and each promoter will have 10000 shares of the company. Company always
announce dividends on their face value.
 Book Value:
Formula = Total assets – Total Liabilities
 Market Value:
Formula = Current market value * Total outstanding shares

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 WITHHOLDING TAX ON CAPITAL
TAX ON INTEREST GAIN & DIVIDEND
 10% - 20% for the filler Capital Gain Tax
 15% - 30% for the non-filler
 15% Tax for filler

 30% Tax for non filler

• If our profit is under 500000 then
Tax for filler will be 10% and for non  But there is no Tax if we hold our
filler it will be 20%. shares for 4 years after purchasing.

• If our profit exceeds from 500000

then Tax for the filler will be 15% Withholding Tax on Dividends
and for non filler it will be 30%.
 15% Tax for filler

 30% Tax for non filler

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 INTERIM ANNUAL DIVIDEND
DIVIDEND
Interim dividend is announced after Annual dividend announced in the
every 3 months of an year. They may or annual report of company. If company
may not announce it according to announce annual dividend, they are
company situation. Companies may not strickted to pay it to the shareholders.
give interim dividend after its
announcement due to any reason. They
are not strick to give this if they
announce it.

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 SPECIAL DATES FOR
DIVIDEND
• Declaration Date:

Date on which dividend is announced.

• Ex-dividend Date:

The date on which you will unable to get dividend on buying share. This date
is a day before record date.

• Record Date:

The date on which you have to be company’s shareholder to get dividend.

Record date could be a day before book closure day.

• Book Closing Date:

It’s a period of 7 – 10 days in which company freeze their share book. No one
able to sell or share of that company in the period of time.

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 TYPES OF SHARES
• Split Share:

If share price of a company is too high to buy by the public, company spilt a
share by any ratio like 2:1 or 4:1 etc. i.e. 2:1 of 1000 will be 500. In this case
company face value also split by that.
• Bonus Share:

If company announce 100% bonus share its means we will get 1 bonus share
on each share. And company value will also not change. i.e. your share price
will be half but your face value will be same.
• Right Share:

Company announce new right shares for the sake of investment. Companies
are strickted to offer these share to its existing share holders by any ratio or
percentage. These shares are transferable. Company also provide a discounted
price on each share.

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 TYPES OF MARKET
• Primary Market:

In primary market, investor and company connect directly for a deal without
any involvement of PSX or any stock broker. In this market, we can only
purchase shares of a company but we can’t sell them to the company again.
• Secondary Market:

In Secondary market, investor will be dealing with the investor with the
involvement of PSX and stock broker.

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 VALUES IN STOCK MARKET
• Bid Price

The price offered by a buyer called bid price.

• Ask Price

The price demanded by a seller called asked price.

• LTP (Last traded price)

The price on which last trade executed successfully.

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 TYPES OF ORDER AT STOCK
MARKET
• Limit Order:

A type of order in which we set a specific price to buy or sell shares. We have
to wait to execute our order until the market price came at our bid or ask price.
• Market Order:
In market order, we don’t set a specific price to buy a share. It just execute in
seconds on best available price.
• Stop Loss Order:

In stop loss order, we set a specific amount to stop a loss of the price of a
share.
• Stop Limit Order:

In stop limit order we set a stop limit order just after stop loss order to stop
selling of a share.

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