Learn the fundamentals of investing in the Pakistan Stock Exchange (PSX) in this informative presentation. Discover strategies, risks, and potential rewards.

1. Unlock the potential of
Pakistan Stock Exchange
By : Najeeb Warsi

2. Things to understand before Investment
• Risk Tolerance: Determine your willingness and ability to withstand fluctuations in
the value of your investments. Assess your risk tolerance based on your financial
goals, time horizon, and comfort level with market volatility.
• Investment Goals: Clearly define your investment objectives. Are you looking for
long-term growth, income, or capital preservation? Your goals will influence the types
of investments you choose.
• Diversification: Understand the importance of spreading your investments across
various asset classes (stocks, bonds, real estate, etc.) to reduce risk. Diversification
can help mitigate losses in any one investment.
• Time Horizon: Consider your investment time horizon, which is the length of time
you plan to hold your investments before needing to access the funds. Longer time
horizons often allow for more aggressive investment strategies.
• Research and Education: Invest time in learning about different investment options,
such as stocks, bonds, mutual funds, and real estate. Stay informed about market
trends and economic factors that can impact your investments.

3. • Trading Hub: The stock market is where people buy and sell ownership of
shares in companies.
• Funding Source: Companies use it to get money from the public to grow
their businesses.
• Investment Chance: People can invest in stocks for profit or bonds for
regular interest.
• Economic Signal: It tells us about the economy's health and what investors
think about it.
Introduction of Stock Exchange

4. . Pakistan Stock Exchange was established on September 18, 1947 and was
formally incorporated on March 10, 1949 under the name of ‘Karachi Stock Exchange’.
. Three Separate Exchanges Karachi, Lahore & Islamabad integrating their
operations effective January 11, 2016 under the new name ‘Pakistan Stock Exchange
Limited’ (PSX)
. PSX constitutes of 40% shareholding by a consortium of Chinese investors
(Shanghai Stock Exchange, Shenzhen Stock Exchange, & China Financial Futures
Exchange), and 60% by general public, which includes initial shareholders, local and
foreign investors.
. There are 523 companies listed in the bourse with a market capitalization of Rs.
6.885* Tn.(30th Sep, 2023) The listed companies are distributed amongst 37 sectors/
groups of industries.​
Introduction of Pakistan Stock Exchange

5. Steps to Start Investment in PSX
Opening an investment account in the Pakistan Stock Exchange (PSX) involves several steps to ensure
that you can start trading securities. Here are six steps to guide you through the process:
• Choose a Brokerage Firm:
• Select a reputable brokerage firm like “Foundation Securities“ registered with the PSX. You can
research different brokerage firms to find one that suits your needs, considering factors like trading
fees, services offered, and customer reviews.
• Gather Required Documents:
• Collect the necessary documents, which typically include your CNIC (Computerized National
Identity Card), Registered mobile number and proof of income and residence. Some brokerage
firms may have additional document requirements.
• Performing Biometric or OTP:
• Perform biometric verification or digitally filling out the OTP form on the broker website, you can
complete the initial KYC process.

6. Steps to Start Investment in PSX
• Digital Account Opening Forms:
• Complete the Digital account opening form. These form will require your personal information,
financial details, and investment preferences. Be sure to read and understand the terms and
conditions before signing.
• Verification and KYC Process:
• The brokerage firm will verify your documents and conduct a Know Your Customer (KYC) process
to comply with regulatory requirements. This may involve providing biometric verification or
additional information if requested.
• Fund Your Account:
• Once your account is approved and activated, you'll need to deposit funds into your investment
account. This can typically be done through a bank transfer or check. The brokerage firm will guide
you on the minimum initial deposit required.

7. Steps to Start Investment in PSX
• Trading App:
• Visit the official app store on your smartphone, such as the Apple App Store or Google Play Store, Use
the search function to look for stock trading App.
• Explore App Features:
• Real-time market data and live stock prices.
• Trading capabilities to buy and sell stocks, ETFs, and other securities.
• Portfolio tracking tools to monitor your investments.
• Research resources like news feeds, technical charts, and company profiles.
• Order placement options (market orders, limit orders, stop-loss orders, etc.)
• Research Portal:
Access live charts, market rates, historical data, reports, and economic news for informed investing.

8. Basics of Stock Investment
• Dividend & Dividend Yield:
• Dividend is a portion of a company's profits paid to shareholders.
• Can be cash or bonus dividend.
• Dividend Yield measures cash flow relative to share price, calculated as a percentage.
• Earnings Per Share (EPS):
• Ratio of a company's net profit after tax to outstanding shares.
• Indicates a company's per-share earning capability.
• Price-Earnings Ratio (P/E):
• Ratio of share price to EPS.
• Measures share price valuation relative to earnings.
• Reinvesting cash dividends in stock investments.

9. Basics of Stock Investment
• Book Value or Break-Up Value:
• Book Value per share is total equity divided by outstanding shares.
• Reflects asset coverage per equity share.
• Capital Gain:
• Earning profit by selling shares at a higher price than purchase.
• Multiple trades can result in multiple capital gains.
• Dividend Reinvestment:
• Reinvesting cash dividends in stock investments.
• Compounding:
• Reinvesting earnings to generate additional earnings over time.
• Generates earnings from initial principal and prior earnings.

10. Why to invest in PSX
• ​Superior return verses fixed income i.e, Naya Pakistan Certificates
• KSE-100 provided average return of 16.5% in twenty five years
• which is more than the return offered by Naya Pakistan Certificates
• Equities verses Real Estate
• Ease of entry and exit verses complex real estate
• Ownership security in equities verses ownership risk in real estate
• Equites are more transparency verses informal market real estate

11. Why invest in PSX
11%
7.00% 6.50% 5.75%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
CY19
CY20
CY21
TD
NPC*
PKR
NPC*
USD
NPC*
GBP
NPC*
Euro
Capital Gain Dividend
*Naya Pakistan Certificates

12. Pakistan vs Emerging Markets: Ten Year Performance
0
50
100
150
200
250
300
350
400
450
8/31/2011 8/31/2012 8/31/2013 8/31/2014 8/31/2015 8/31/2016 8/31/2017 8/31/2018 8/31/2019 8/31/2020 8/31/2021
KSE 100 vs MSCI Emerging Index (10 Year Return)
KSE 100 MSCI MXEF

13. Foundation Securities - Introduction
• Established Reputation: A leading stockbroker in Pakistan with over 16 years of experience.
• Affiliation with Fauji Foundation: A subsidiary of the esteemed Fauji Foundation group, a prominent
and substantial industrial conglomerate in Pakistan, boasting assets of approximately US$4 billion.
• Digital Account Opening: Offers digital account opening services for both local and overseas investors
through the RDA (Remote Digital Account) mechanism, making it convenient for a wide range of clients.
• Comprehensive Online Platform: Provides a cutting-edge online trading platform called "FS EDGE"
available in mobile, web, and desktop versions, ensuring accessibility and convenience for traders.
• Research Department: Equipped with a dedicated research department that offers valuable
investment insights and analysis, empowering clients with superior information for making informed
investment decisions.

14. Foundation Securities - Introduction
• Accessibility and Convenience: Ensures accessibility to a wide range of investors through its digital
account opening process, making it easier for clients to begin their investment journey.
• Institutional Backing: Benefits from its affiliation with Fauji Foundation, leveraging the strength and
resources of one of Pakistan's largest industrial conglomerates.
• Holistic Investment Services: Offers a full suite of services, including account management, research,
and a state-of-the-art trading platform, creating a comprehensive investment ecosystem for clients.

15. Thank You
www.fs.com.pk
www.fsedge.com
email: info@fs.com.pk
WhatsApp : 0301-850 5251
Call Toll Free: 0800-87233