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
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 .
