Karachi stock exchange Presentation

THE KARACHI

STOCK EXCHANGE

Speaker : Muhammad Owais Khan

KEY POINTS OF PRESENTATION

History Of Stock Exchanges Stock Stock Market World Top Stock Exchanges Stock Exchanges In Pakistan KSE Introduction Investment Ways Trade System

GENERAL HISTORY OF STOCK EXCHANGES

In 11th century people of France were concerned with managing and regulating debts of agriculture communities on behalf of the bankThey could be called the first broker in history

Bourse come from the Latin “bursa” meaning a bag In 13th century Bruges, the sign of a purse hung on front of

the house where merchants meet Latter in 13th century commodity traders gathered inside

the house of a man called Van der Burse And after that they institutionalized that house and became

Bruges Bourse .The idea spread quickly in neighbor countries

The Dutch later started joint stock company, which let share holders invest in business ventures and get a share of their profits - or losses.

In 1602, the Dutch East Indian Company issued the first shares on the Amsterdam Stock Exchange.

It was the first company to issue Stocks and bonds In 1688, the trading of stocks began on a stock exchange in

London. It was the first stock exchange in history

GENERAL HISTORY OF STOCK EXCHANGES

HISTORY OF KARACHI STOCK EXCHANGES

It was established on September 18, 1947 And was incorporated in March 10, 1949 Started with 5 companies With paid up capital of PKR 37 million The first index was the KSE 50 index On November 1, 1991 the KSE index 100 was introduced Computerized trading system, called Karachi Automated

trading system (KAT) was introduced in 2002 August 29,1995 the all shared index was introduced To address the needs of investors two more indexes are

introduced

HISTORY GROWTH OF KSE

Before going on word I have

to discus some points

Stock is a piece of ownership for a company. Source of finance for a company If a company wants to get extra money to grow their

business, they can sell some and all ownership of the company in the form of stock. If a man buys 55% of the company stock, he has decision making power of the company. Buying stock is the very popular form of investors

WHAT IS STOCK

WHAT IS STOCK Classification of Stocks :

I. Stock Sector : group of companies that belong to the same industry and

provide the same product or serviceII. Income Stocks :

Include shares of corporations that give money back to shareholders in the form of dividends

III. Value Stocks : Stocks of profitable companies that are selling at a

reasonable price compared with their value.

WHAT IS STOCK

I. Growth Stocks : Stocks of companies that consistently earn lot of money

and are expected to grow faster than the competition.II. Penny Stocks :

Stocks that usually sell for less than a dollar. Small-cap: Market Cap of 2.5 billion or less. Normally

trades are under $10. Microcap: Markets of 500 million or less. Normally

trades are under $1.

WHAT IS STOCK MARKET It is a market in which securities are brought

and sold and it is an essential component of a developed capital market .

“Stock Market means anybody of individual whether incorporated or not ,constituted for the purpose of assisting ,regulating or controlling the business of buying ,selling or dealing in securities “.

These days stock market is the most important source for companies or people to raise money

THE WORLD TOP STOCK EXCHANGES NEW YORK STOCK EXCHANGE:

Market Capitalization (2011, USD Billions) – 14,242

TOKYO STOCK EXCHANGE: Market Capitalization (2011, USD Billions) – 3,325

LONDON STOCK EXCHANGE: Market Capitalization (2011, USD Billions) – 3,266

THE WORLD TOP STOCK EXCHANGES SHAINGHAI STOCK EXCHANGE:

Market Capitalization (2011, USD Billions) – 2,357

HONGKONG STOCK EXCHANGE: Market Capitalization (2011, USD Billions) – 2,258

KARACHI STOCK EXCHANGE The Karachi Stock Exchange (KSE), Pakistan's

largest and most liquid Stock Exchange. The Karachi Stock Exchange (KSE) is the premier

stock exchange of the country. KSE provides a liquid and efficient digitized

marketplace where investors meet directly to buy and sell listed companies' common stock and other securities.

KARACHI STOCK EXCHANGE For more then 60 years the KSE has facilitated

capital Formation KSE offers companies and investors an efficient

and transparent securities market

INTRODUCTION TO KSE

On September 26, 2013 There are 652 companies Total market capitalization is $53.3 billions 36 sectors are listed in Karachi Stock exchange Exchanged owned by 200 members 3 Indexes (KSE 100, KSE 30, KMI 30 indexes)

INTRODUCTION TO KSE

Customers of KSE: Issuers (Listed company) Brokers / Members Investors

Eligibility To List in: Minimum paid up capital must be RS 10 million Minimum Public offering must be 5 million or 25% of the

capital

Local Investors

Foreign Investors

Mutual Funds

Institutions

Banks

MAJOR PARTICIPANTS OF MARKET

INVESTMENT WAYS IN KSE

1. Stocks / Shares : When we participate in the ownership of the

business and have an equitable right in the business to the extent of our share in it, we become an "equity" or " share" holder.

2. Bonds : Bond is a debt instrument represent the promise of a

issuer to pay a fix sum of money at specified maturity date

KSE introduced computerized trading system which has the following ways

1. T+3 settlement system: In T+3 settlement system the purchase and sale of security is

netted and the balance is settled on third day following the day of trade

2. Provisionally listed counter: The shares of a company which are not already listed and

which make minimum public offering of specified amount

TRADE SYSTEM OF KSE

3. T+1/ Spot settlement system: Normally in this type of transaction the trade is settled with in 24

hours

4. Future contract It include the sale and purchase of securities at some future date on

fixed amount fixed today

5. Odd lots market: It help the investors to deal securities in lots

6. Over the Counter Market (OTC): To encourage promoters to set up new industries or to

expand its running business with low requirements

TRADE SYSTEM OF KSE

DELIVERY AND SETTLEMENT There are two steps in delivery and

settlement system1. Central Depositary System (CDS) :

It has the following accountsI. Sub-AccountII. Group-Client AccountIII. Investor Account

2. National Clearing And Settlement System (NCSS) :

i. Stock Quote : Current

ii. Bid Price : The price to get stock

iii. Ask Price : The price you pay

iv. The Spread : The difference between bid and ask price

v. Outstanding Shares : Total number of shares issued by company

vi. Float : Shares owned by out side investors

STOCK PRICES

REFERENCES Wikipedia Answer.com KSE Official site Slide share Google Books