STOCKS AND BONDS IN PAKISTAN

BONDS:
A bond is a fixed-income instrument that represents a loan made by an investor to a borrower
Bonds are used by companies, municipalities, states, and sovereign governments to finance
projects and operations. Owners of bonds are debtholders, or creditors, of the issuer.
Issuance of bonds in Pakistan
Coupon Bonds
In Pakistan coupon bonds also referred to as a bearer bond or bond coupon, is a debt obligation
with coupons attached that represent semiannual interest payments Certificates may also be
issued to Corporate entitles excluding banks operating in Pakistan.
Entities that issue coupon bonds:
• Pakistan investment bond UBL.
• National Saving Bonds.
• Karachi Tools, Dies and Moulds Centre.
• These bonds are issued by government and corporation.
Zero Coupon Bonds.
 Zero coupon bonds issued by the Government of Pakistan. These include PIBs, Treasury
Bills, National Savings Bonds.
 Zero coupon bonds are sold in the primary market through auctions conducted by State
bank of Pakistan (SBP).
Entities that issue zero coupon bonds:
 UBL, Allied Bank
 MCB bank limited
 Municipalities.
 Federal. Agencies
Perpetual bonds:
 KARACHI: Bank Al-Falah, the first-ever perpetual bonds listed on the stock exchange
Entities that issue perpetual bonds:
 State Bank of Pakistan.
 Meezan Bank Limited.
 Habib Bank Limited.
  Bank Al-Falah.
STOCK
A stock (also known as equity) is a security that represents the ownership of a fraction of a
corporation. Units of stock are called "shares." Stocks are bought and sold predominantly on
stock exchanges, though there can be private sales as well, and are the foundation of many
individual investors' portfolios.
Common Stock
• Common stock is, well, common. When people talk about stocks in general they are most
likely referring to this type. In fact, the majority of stock issued is in this form.
• Common shares represent ownership in a company and a claim (dividends) on a portion
of profits.
• Over the long term, common stock, by means of capital growth, yields higher returns
than almost every other investment.
• This higher return comes at a cost since common stocks entail the most risk.
• If a company goes bankrupt and liquidates, the common shareholders will not receive
money until the creditors, bondholders, and preferred shareholders are paid.
Entities that issue common stock:
 Attock Cement (Pakistan) Limited
 Cherat Cement Company Limited
 Al-Ghazi Tractors Ltd.
 Arif Habib Limited.
Preferred Stock
• Preferred stock represents some degree of ownership in a company but usually doesn't
come with the same voting rights. (This may vary depending on the company.)
• With preferred shares investors are usually guaranteed a fixed dividend forever
• Preferred stock may also be callable, meaning that the company has the option to
purchase the shares from shareholders at any time for any reason (usually for a premium).
• Some people consider preferred stock to be more like debt than equity.
Entities that issue Preferred Stocks:
 Kohinoor Industries Ltd.
 Adam Sugar Mills Ltd.
 Dewan Farooqui Motors Limited.
 State Life Insurance Corporation of Pakistan.
 The Hub Power Company Ltd.