Stock Exchange

DEFINITION “A MARKETPLACE WHERE SECURITIES, COMMODITIES,

DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS ARE TRADED. THE CORE FUNCTION OF STOCK EXCHANGE IS TO ENSURE FAIR AND ORDERLY TRADING, AS WELL AS EFFICIENT DISSEMINATION OF PRICE INFORMATION FOR ANY SECURITIES TRADING ON THAT EXCHANGE”

• INVESTOPEDIA EXPLAINS “EXCHANGES ARE LOCATED ALL AROUND THE GLOBE, WITH SOME OF THE MORE FAMOUS ONES BEING THE NEW YORK STOCK EXCHANGE, NASDAQ AND THE TOKYO STOCK EXCHANGE. MORE AND MORE TRADING IS BEING DONE ON ELECTRONIC EXCHANGES AS MARKETS BECOME MORE ADVANCED AND AS THE EXCHANGES THEMSELVES ARE ABLE TO ENSURE FAIR TRADING WITHOUT REQUIRING ALL MEMBERS TO BE ON THE SAME TRADING FLOOR”

LSE INDEX

• The LSE-25 index calculates the performance of stocks assuming that all rights issues and bonus share issues only increase the listed capital so that the prices of the shares are not adjusted as they are in the case of the LSETRI.

• The LSE25 also assumes that dividends paid out by a component company are not reinvested. In summary, in the LSE25, no price adjustments are made when any component company issues cash dividends

Roles of Stock Exchange

Stock exchange plays some special roles for the development of any country. Following are explained below………

01. The stock exchange admits companies for trading at their securities

02. It provides a market for raising capital by companies.

03. It is the market where shares of listed companies are sold and purchased ,by bringing companies and investors together

04. It monitors the market to ensure that it is working efficiently, fairly and transparently

MEMBERS

• Mubashar Latif (Ex-President),• Azan Mubashar (Ex-Executive Vice-President),• Abubakar Mubashar (Ex-C.E.O), • Monica Labrador securities, Hilary Labrador securities• Members in Lahore Stock Exchange include 128 Securities,

Abbasi & Company, Adeel Zafar Securities, Dr. Arslan Razaque Securities, MTM Securities(PVT)LTd, Fairway Securities (PVT) Ltd, and so many others

PAKISTANI STOCK EXCHANGES

There are three stock exchanges in Pakistan: 

01. Karachi Stock Exchange Ltd.

02. Lahore Stock Exchange Ltd.

03. Islamabad Stock Exchange Ltd.

Out Of these, Karachi Stock Exchange is the biggest exchange in the country.

Products

Following are the main products that are deal in stock exchange for trading purposes• Shares• Debentures• Swaps• Futures• Options• Crude oil• American Dollar• Gold• Silver• Australian Dollar• British pounds• Japanese Dollar

How To Trade?

• Introducing Stock brokers:Stockbrokers are your link to the stock market. Their job is to help you get the best price available when you want to buy or sell your shares. Be careful in selecting your broker.

• The Mechanics of Share Dealing:There are various ways of investing in the stock market: you can deal directly in shares; invest through a unit trust or investment trust or let your investment be handled by an advisor.

• Opening of Account:Once you have decided the broker with whom you intend to deal, you should ensure that an account is opened in your name by filling the account opening form. It is imperative that the terms and conditions prescribed in the account opening form are read very carefully and well understood. It will be in your interest if you give clear instructions as to who can operate the account. It is preferred if the investor gives instructions that business can only be transacted in the account on his instructions

How to Trade?

• Buying/ Selling Directly:When you have decided to buy/sell shares in a particular company, contact your stockbroker. You can ask to buy/sell a fixed number of shares or shares up to a certain value. Get the contract note confirming your order immediately and check for the following information.

01. Name and number of securities.

02. Date on which the order is executed.

03. Nature of transaction (spot, ready or forward and also whether bought or sold).

04. Price at which the transaction is executed.

05. Commission charged by the broker.

Types of Orders

There are two types of ordersLimit Orders:In a limit order, the client specifies the price at

which the order is to be executed.

Market Order Also known as at best order, the order is executed

at the prevailing market rate.

Top 10 stock exchanges

Country and stock market  Rise per share

01. Venezuela – Caracas Stock Exchange  452pc

02. Japan – Jasdaq index  51.1pc

03. Iceland – OMXI All Share  38.5pc

04. Zambia – Lusaka Stock Exchange  37.2pc

05. Ireland – Irish Stock Exchange  35.2pc

06. Nigeria – Nigerian Stock Exchange  34.9pc

07. Greece – Athens Exchange  34.5pc

08. Argentina – Mercado de Valores  33.9pc

09. US – Nasdaq index  33.7pc

10. Pakistan – Karachi Stock Exchange  31.8pc