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Working of Lahore Stock Exchange
Working of Lahore Stock Exchange
TOPICS:
DIFFERENCE BETWEEN COMMON AND PREFERRED STOCKS
HOW STOCK EXCHANGE WORKS IN PAKISTAN
ASSIGNED BY:
MAM. NAHEED MALIK
FINANCIAL MANAGEMENT
ASSIGNED TO:
AAMIR SHEHZAD
FA08-MBA-002
JAHANZAIB
FA08-MBA-046
FA08-MBA-052
FA08-MBA-066
MUHAMMAD ANWAR
FA08-MBA-070
NEELAM JAVAID
FA08-MBA-114
FA08-MBA-118
ROHAIL ISLAM
FA08-MBA-122
UMMAR LATIF
FA08-MBA-154
CONTENTS:
What are stocks?
Types of Stocks traded in Pakistan
Common Stocks
Preferred Stocks
Difference Between Common and preferred stocks
What is Stock Exchange?
What is Index?
How Stock Exchange works?
Role of brokers in Stocks trade
Conclusion
limited liability which means if the company faces the bankruptcy then
stockholder is not personally liable for the debts of the company.
Hence liability is limited up to the value of stocks.
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1.1)
Types of Stocks
COMMON STOCKS:
In Pakistan mostly companies issue common stocks. Common stock
represents ownership in a company and a claim or dividend on a portion of
profits. Shareholder gets one vote per share to elect the board of directors
who oversee the major decisions made by the management. Common
stockholders entitled to dividend if and when declared by the board of
directors. They have the last claim on the assets of the company after paying
off creditors, bondholders and stockholders, thats why Common
stockholders are also known as the residual.
PREFERRED STOCKS:
In Pakistan Preferred stocks are issued by very small number of companies.
Preferred stock represents some degree of ownership in a company but
usually doesn't come with the same voting rights. (This may vary depending
WHAT IS INDEX?
Everyday in business news it is heard that KSE 100 Index or LSE 25 Index
increased or decreased by some points. Index shows the trade of shares of
top companies in the market. In Karachi Stock Exchange 100 index shows
the trade of shares of top 100 companies in the market. Lahore stock
exchange index shows the top 25 companies shares.
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1.2)
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Clients can purchase shares from their brokers on debt but it is necessary by
SECP that client should pay at least 60% of the amount.
facilitate the investors. Before this system stocks were traded physically by
bidding in the open hall which was very slow system. In Pakistan LSE is the
first to introduce IT trading system, in which softwareULTRA is used.
Ask Price
Name of
Company
OAGRA
No. of
Shares
1000
Price Per
Share
80
Bid Price
No. of
Shares
1000
Price per
Share
75
800
78
800
78
The trading system comprises of four distinct segments, which are:
Situation
Not
Traded
Traded
SPOT/T+1 TRANSACTIONS:
Normally
in
spot
FUTURE CONTRACT:
A Futures contract involves purchase and sale of a financial or tangible asset
at some future date, at a price fixed today.