Stock Futures And Options
The futures and options markets are not technically a part of the stock exchange markets, but they provide the best way of making money with stocks in Pakistan.
In stock options, investors obtain the opportunity to sell or buy a stock for a state price at a future expiration date. If the market price of a stock is low or high, then the options state strike price at its expiry date.
The holder of the options can use their selling or buying right and make a profit from the differences between the two prices. Before the expiration date, options can be sold or bought in the secondary market. Comparably, futures contracts are sold for some individual stocks and some major stock indices.
Futures stocks are sold at an approximate future price for the stock or index. In a year, contracts are expired four times at the end of each quarter. At the time of expiration of futures price, the index or stock value is high then the buyer takes a profit. If the value of stock or index is lower, the buyer faces the situation of loss.
Online Mobile Trading Apps In Pakistan:
Mobile trading apps have made things easier for an investor or trader because you can execute any transaction in the stock market through your smartphone.
You can trade from anywhere anytime through the mobile trading app.
Online Trading platforms provide all the necessary help and support by providing secure real-time access to trading, research reports, price analysis of stocks, market news, and more. If you have a trading account and an internet connection , you can buy or sell shares.
Not only this, you can trade in currency, commodity, etc. through the same trading platform.o
Online trading is also the best way to earn money online from home. There are many others ways to work at home without investment but require some deep knowledge to overcome failure risk.
Online trading platforms help you to trade without difficulty as these platforms enable high-speed trading. These platforms have revolutionized the way of doing business.
Why & How Are Shares Of Companies Listed:
PRIMARY AND SECONDARY MARKET:
The main purpose of the stock market is raising of capital through investment in shares of listed companies. Listed companies are those which issue shares in the stock market to raise capital. This is done either through an Initial Public Offering or Rights issue.
An IPO or Initial Public Offering is the issuance of shares by a company in the stock market in order that its shares are purchased by the general public. Once the IPO has taken place, the shares continue to be traded in the stock market , changing hands between buyers and sellers.
Another way a company raises its capital is by issuing right shares at a certain price to existing shareholders. A shareholder interested in purchasing the right shares may do so if he deems it fit.
PSX & ITS LISTED COMPANIES:
Pakistan Stock Exchange consists of a list of more than 500 companies in more than 35 different sectors or industries. The total Market Capitalisation was Rs 8.24 trillion as of July 30th, 2021
WHAT IS AN INDEX & WHAT IS ITS PURPOSE:
Index is a grouping of selected companies stocks according to certain financial parameters in order to measure the performance of a section of the stock market.
INDICES LISTED ON PSX:
There are eleven Indices listed on PSX which are:
SHARIAH COMPLIANT INVESTMENTS:
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Largest Pakistan Stocks Share Companies
The PSX consists of 375 companies that are working in Pakistan. Furthermore, the most significant shares are of the below organisations representing 35 business sectors. These companies include the energy sector, building and developing industry, oil and gas, consumer products, fertilisers, and cement, holding the largest capitalisation in the market.
- Oil & Gas Development Company Limited , a fuel company.
- Pakistan Petroleum Limited, , a fuel company.
- Lucky Cement Limited , a construction material company.
- Pakistan Tobacco Company Limited , a tobacco company.
- Nestle Pakistan Limited , FMCG company.
- Engro Corporation Limited , a conglomerate.
- Fauji Fertilizer Company , a chemical fertiliser company.
Stock Investment Basic Concepts:
Primary market/ IPO Donts:
Secondary Market Dos:
Secondary Market Donts:
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How To Enter The Stock Market Electronically
In line with the Pakistan Stock Exchanges commitment to make investing in the stock market a convenient process, the online account opening facility has been introduced for an account with security brokers.
With the process of digitisation of market functions, the online trading facility was on-boarded for investors almost two decades ago. It has been facilitated by the PSX through its KiTS platform which is the basis of the online trading applications and software provided by brokerage houses to their clients.
The system enables investors to view their cash position, trade summaries, trade confirmations and custody position at the click of a button. The missing link was that the opening of an account was not online which was introduced in January 2021.
With the advancement in technology, the Covid-19 outbreak, and the Roshan Digital Account platform being launched which facilitated fulfilling know-your-customer requirements online, online account opening was the next step on the path of innovation and progress.
The PSX is making efforts with the SECP to make the KYC requirement into a unified system whereby there will be a singular database that can be shared
This will make redundant the process of initiating KYC formalities every time an individual wants to open an account with any of the market entities.
The author is the head of Marketing & Business Development, Pakistan Stock Exchange Ltd.
Importance Of Stock Broker
Stock Brokers are extensively trained to understand securities and must pass rigorous licensing exams, including licenses.
There are many types of brokers, and other licenses are required to trade specific securities . Share brokers advise their clients to buy, sell or hold securities.
Good stockbrokers will thoroughly study any securities for which they make recommendations. They will take the time to understand their customers and make appropriate recommendations.
It is up to individual investors to decide whether the fees and commissions they pay to stockbrokers will affect their returns and whether it is appropriate to provide the services provided.
How To Buy Shares In Kse
It’s better to buy in NIT ‘NIT Unit’ because it belongs to the govt. KSE is at very high these days.. So it would not be a smart decision to buy any share from any company. Let KSE drop 3000-4000 points which is very unlikely because Noora must have invested big amount in KSE.. If it drops, then you could have a chance to earn good amount of money.
I would like to know how anyone can buy shares of any company listed in KSE?Also can anyone buy shares of KSE too?
Gufi said:I think if he knew that he would not have asked always ask people to Google and make some effort. I was interested when I passed by your mutual fund advice. Most mutual funds should have taken a hit because of oil prices and international market fluctuations I guess? or is it not the case? where do you invest btw, the States or India
Make Your First Trade
If youve decided on a top broker to open an account, you can start by filling out the required paperwork and providing identity documentation.
In the meantime, you can download the trading platform and get it set up on your computer, tablet and/or mobile device.
Once your account is open and you have identified a good stock or another asset to take a position in, just enter an order on your stock brokers platform to get started.
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Pakistan Stock Exchange History
The Pakistan stock exchange is a combination of Karachi, Lahore, and the Islamabad Stock Exchange. The PSX headquarters is located in Karachi and was inaugurated on 11 January 2016. However, all the trading of stocks takes place in Karachi. With todays date, the Pakistan stock market has a capitalisation of approx. PKR 7,756 billion , with the 375 listed companies.
Moreover, the Karachi stock exchange was registered in 1947, and it was located on the stock exchange road in Karachi business hub, I. I Chundrigar Road. Additionally, by 2015 the KSE was standing among the top best stock markets in the world. Besides the transformation of the Karachi stock exchange into the Pakistan stock exchange, the major index tracking is still known as the KSE 100.
The merging of Stock exchanges was to reduce the market segmentation and to create value by providing necessary technical expertise and assistance. However, the stock balance is owned by the general public, which includes local investors and foreign investors. Also, read about the cost of living in Pakistan.
Types Of Investments In The Stock Market
Typically, you can make two types of investments in the Pakistan Stock Exchange:
Short Term Investment:
In a short-term investment, the investors buy and sell shares on a daily basis depending upon the market value. Such traders are referred to as day traders. They do so by their exceptionally good skills of analyzing financial aspects behind every trade.
Long Term Investment:
In a long-term investment, the traders keep their shares for a long time until the prices reach their peak so that they can gain maximum profit. In such an investment, they also get dividends every 3 months.
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How To Start Online Stock Trading In Pakistan
Pakistans stock market is now viable for international and domestic investment. As of May of 2017, MSCI Global reclassified the major Pakistani stock indexes from Frontier Markets to Emerging Markets during the companys May 2017 Semi-Annual Index Review. In addition, the countrys three major exchanges in the cities of Lahore, Karachi and Islamabad merged their operations in January of 2016 to become the Pakistan Stock Exchange Limited .
In order to invest and trade in stocks in Pakistan, you must first open an account with a reputable Pakistani broker. Keep in mind that not all brokerages are created equal, so make sure to carefully consider your needs before opening an account.
Feb How To Purchase Shares Of A Company In Pakistan
An initial public offering or initial public offering is the issuance of shares by a company on the stock exchange so that its shares are purchased by the public. After the IPO, the shares continue to be traded on the stock exchange and change hands between buyers and sellers. To understand how the exchange works, you need to think of it as an auction. Investors who assume a company will do well will raise prices and vice versa. Many people who keep a close eye on the PSX market have avoided riskier stocks and bought low-risk stocks, but have given them high returns. It is essential to focus on risky assets, profitable stocks and non-profit stocks. So that you can make serious decisions when investing. Therefore, understanding the risks and potential returns associated with each stock will help you make a high profit and avoid losses. The Pakistani stock market is now suitable for international and domestic investment. In May 2017, MSCI Global upgraded Pakistan`s major stock indexes to emerging markets as part of the company`s May 2017 semi-annual index review. In addition, the country`s three major stock exchanges in the cities of Lahore, Karachi and Islamabad merged in January 2016 to form Pakistan Stock Exchange Limited . A balanced portfolio with different levels of equity market risk and their returns is usually a good combination for building an equity portfolio.
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Invest In Pakistan Stock Exchange
eBanc Roshan Digital Account holders can now invest in the stock market with ease! Choose your brokerage firm and open the account in three steps
Overseas/ non-resident Pakistanis can now invest in Pakistan Stock Exchange through ebanc Roshan Digital Account and earn competitive returns while contributing to their homelands economy. Choose from a list of companies across different sectors, build investment portfolio and reap the benefits of Pakistans capital market.
For more information,Please visit PSX website
How to Open Your Roshan Equity Investment Account
Step 1: Select your brokerage firm
Select from the given list of brokerage firms
Step 2: Application
You are requested to provide your consent authorizing HBL to share your application and information with your selected brokerage house and capital market entities to open your brokerage account & CDC depository account
Step 3: Fund your RDA brokerage account
Transfer funds from your RDA Bank Account into your RDA Stock Market Account and invest i.e. buy and sell stocks
Brokerage House List
This list is subject to change, completion or amendment without notice.
A. offers current account services to eligible non-resident Pakistanis to enable them to digitally open and operate bank accounts in Pakistan.
D. Placing deposits in a currencies other than in the currency of the country of residence of the accountholder may also expose the accountholder to exchange rate risks.
Security Measures To Be Taken In Case Of Online Trading:
- Trade orders should not be placed from shared PCs or cybercafes.
- Always log out after trading to avoid any misuse of your account.
- Personal computers have to protect against viruses by applying anti-virus solutions.
- Do not click on the Remember Me option when you log into your trading account from a different location.
- Many brokers offer investments in financial assets. You can choose who suits your needs and demands after comparing brokers based on services, brokerage fees, etc. Online trading helps you trade or invest in the safest way. To do business online is simple, easy, and fast.
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Benefits Of Investing In Pakistan Stock Exchange
A significant increase in stock prices can get you a maximized potential gain than your capital. As stock prices vary every day, this is a very opportune long-term investment plan.
Various companies in the shareholder offer discounts and free services to their shareholders. If you own a substantial number of shares of a company, you will be offered exceptional discounts while purchasing goods.
At the end of each financial year, a part of the companys profit called the dividend is paid to its shareholders in the form of cash. The more shares you own, the more profit you will earn at the end of each financial year.
The best thing about shares is their liquidity. They can be easily bought and sold without having to buy the entire product so its a win-win situation for brokers if they sell their shares at the right profitable time.
Before investing in a share, it is very important to go through their listings and offers as every company has different offerings.
How Do Beginners Buy Stocks
The easiest way to buy stocks is through an online stockbroker. After opening and funding your account, you can buy stocks through the broker’s website in a matter of minutes. Other options include using a full-service stockbroker, or buying stock directly from the company…. see more
- Real Estate. As low as Rs. 10 lac. …
- Peer to Peer Lending. As low as Rs. 10,000. …
- Investment in Stocks. As low as Rs. The average return is 10%. …
- Invest in Banks and Investment Companies. As low as Rs. 10,000. …
- Gold. Rs. 93,400 for one tola. …
- Forex. As low as Rs. 1000. …
- Bonds. As low as Rs. …
- 3D Printing. As low as Rs.
Top Online Trading Apps in Pakistan in 2022
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Basic Guidelines For Stock Investment
DEFINE YOUR INVESTMENT OBJECTIVES
A basic guideline is to understand what you really want from your stock investment
- Do you want to invest for the short term , medium term or for the long term ?
- Do you want to invest for dividends or for capital gain or for both?
- How much risk can you take in terms of market downturns?
These are the basic questions you must address before investing
Optimally, you may want to invest in stocks for the long term, in order to earn dividends and for capital growth over a number of years
YOU SHOULD DIVERSIFY YOUR INVESTMENT
As mentioned earlier, it is important to have a diversified portfolio of investments. You can have a diversified portfolio of stocks in order to cushion the effects of market downturns & volatility and to keep your total investment relatively secure.
You can diversify your portfolio by
- investing in different products listed on the Stock Exchange such as stocks of listed companies, T-bills and mutual funds
- Investing in stocks on the basis of different industrial sectors or their market capitalisation
- Investing in stocks based on shares that give dividends or shares that provide for sufficient capital gain or both
- Investing in stocks with different risk/ return levels. Some providing greater returns while others providing less returns. At the same time, the risk level of former will be greater than that of the latter
EVALUATE YOUR RISK TOLERANCE AND CAPACITY LEVEL
WHEN TO ENTER OR EXIT THE STOCK MARKET