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Working of stock exchange

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  • 1. Presenters: Iqra Azam (10-arid-300) Ayesha Saeed (10-arid-282) Maria Barket (10-arid-308)
  • 2. Stock Exchange  Stocks are basically 'shares' of a company.  Stock exchange is an institute in which we sell and buy stocks with the help of brokers on the behalf of Investors.
  • 3. Stock Exchange In Pakistan There are three stock exchange in Pakistan: 1.  Karachi Stock Exchange(KSE)-August 14, 1947 2. Lahore Stock Exchange(LSE)-October 1970 3. Islamabad Stock Exchange(ISE)-25 October 1989
  • 4. Karachi Stock Exchange  It is Pakistan's largest and one of the oldest stock  exchange.  There are 652 companies is  enlisted in KSE.  the KSE has two market indices (KSE-30, KSE-100).  The market capitalization stood at  US$ 53.3 billion - (28 May, 2013)
  • 5. Lahore Stock Exchange  It is Pakistan's  second largest stock exchange in the  country.  There are 671 companies is  enlisted in LSE.   The LSE has just one market indices LSE 25 Index.  The market capitalization stood at $ 36.44 billion on Jan  30, 2012.
  • 6. Islamabad Stock Exchange  ISE is the youngest of the three stock exchanges of Pakistan  There are 261 companies is enlisted in ISE.  At present, the ISE has one market indices (ISE 10 Index).  The market capitalization stood at Rs. 2,275.00 billion as on 04-04-2007 .
  • 7. How To Invest ?  If an investor want to purchase a share of particular company he has a open a account with broker.  It is required by the broker to that registered with them you have submit minimum deposit of Rs 50000 with the broker. which will be your capital and you buy shares from that money which you have deposit with your broker
  • 8. Registration Process Of New Investor
  • 9. How To Trade
  • 10. Trading Procedure In Stock Exchange In order to purchase or sell Shares on the stock exchange. The following steps has been taken: 1. Selection Of Brokers:  A broker is a member of Stock exchange and stocks can only be sold and purchase through him. After selecting broker the investor has to buy or sell the stocks on his behalf.  Ensured that your Broker is registered with the SECP.
  • 11. Example  ABC is an investor he wants to purchase 100 shares of company ”pace” he will ask his broker to purchase the shares.  If the shares is under loss his broker will warn him to not to invest the company ”pace” but the ultimate decision power is with investor .  If ABC want to sell his shares once again his broker will sell his shares in the stock market on his behalf.
  • 12. 2. Placing An Order There are three parties involve in the dealing of shares:  The stock broker  The client  Jobber
  • 13. Cont…  The stock broker simply acts as agent and contacts the particular jobber in the stock exchange on behalf of the client. He does not disclose to the jobber whether he is a buyer or seller of shares.  He therefore, asks him to quote two prices: I . The upper prices at which he is ready to sell the shares. II . The lower prices at which he is ready to buy the shares.
  • 14. Example  Mr. Ali wants to sell one thousand shares of a Company. He contacts a broker dealing on the stock exchange.  The broker asks a jobber to give quotations. He does not disclose the jobber whether he wants buy or sell the shares of a company.  The jobber gives two prices, one at which he is willing to sell and the other at which he is ready to buy.
  • 15. Cont…  If the broker is not satisfied, he can go to another jobber or ask the first one to make it closer (i.e. to reduce the margin between buying and selling).  If the broker is satisfied with the new quotation, he then contacts with his client informs him the bid of the share.  If the client agrees to the bid price, then bargain is struck.
  • 16. 3.Preparing the contract note: The stock broker prepares a contact note, one copy of which is given to the client; second one to the jobber and the third remains with the broker. The contact note generally contains the following information:      Name and the address of the stockbroker. The name and address of the jobber. The type and price of the share. The commission of the broker. The date of transaction
  • 17. 4.Settlement:  In case of ready delivery contract, the buyer pays the money and the seller delivers the securities one same day.  In the case of forward delivery contracts settlements are done in a week or once in a month .