Pakistan Stock Exchange

Introduction
Pakistan Stock Exchange was established on September 18, 1947 and was formally incorporated
on March 10, 1949 under the name of ‘Karachi Stock Exchange’, as a Company limited by
Guarantee. In October 1970, a second stock exchange was established in Lahore to meet the
stock trading needs of the provincial metropolis. In October 1989, Islamabad Stock Exchange
was established to cater to the investors of the northern parts of the country. Because the three
exchanges had separate management, trading interfaces, indices, and had no mutualized
structure, therefore the Stock Exchanges (Corporatization, Demutualization and Integration) Act,
2012 was promulgated by the Government of Pakistan which ultimately resulted in the three
exchanges integrating their operations effective January 11, 2016 under the new name ‘Pakistan
Stock Exchange Limited’ (PSX). PSX has made significant strides in its history, having a small
presence of 5 listed companies initially with a total paid-up capital of Rs 37 Mn. In 1960 there
were 81 companies with a market capitalization of Rs 1.8 Bn whereas now there are 546*
companies listed in the bourse with a market capitalization of Rs 7.692* Tn. The listed
companies are distributed amongst 35 sectors/ groups of industries.

Mission & Vision

To provide easy to use, community-driven, and useful platform for anyone who wants to learn
investment and trading, especially in the stock markets of Pakistan. To attract young generation
towards the stock markets of Pakistan in order to create awareness and confidence by providing a
learning and educational platform that grows with time.

Objectives of Pakistan Stock Exchange

 To provide tools for young traders/investors for learning, research, and practicing
investment and trading techniques and strategies.
 To provide a system where everyone can learn from each other by communicating,
sharing, and participating in group activities.

HOW THE STOCK MARKET WORKS

The stock market is a place where companies list themselves to make their shares available to a
broad range of investors to purchase these shares. You, as an investor, have the option to choose
from multiple stocks of different companies to buy in order to build your investment portfolio.
The share prices of the shares listed on the Stock Exchange fluctuate according to the buy & sell
transactions taking place.
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 (Primary market) 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 (Secondary 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 (volume of outstanding shares x share
price) 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:
 KSE 100 Index
 KSE All Share Index
 KSE 30 Index
 PSX-KMI All Shares Index
 KMI 30 Index
 BKTI (Tradable Banks Index)
 OGTI (Tradable Oil & Gas Index)
 NITPG Index
 UPP9 Index
 MZNPI Index
 NBPGI Index
SHARIAH COMPLIANT INVESTMENTS
For those investors who want to invest in Shariah compliant companies, there are listed
companies on the Stock Exchange which are Shariah compliant. The PSX-KMI All Shares Index
& the KMI 30 Index (KMI: KSE-Meezan Index) represent listed companies which are Shariah
compliant. There are more than 200 companies listed on the PSX-KMI All Shares Index. The
PSX-KMI All Shares Index & the KMI 30 Index were developed by PSX and Meezan Bank
Limited. The listed companies’ Shariah compliance status is based on certain technical
parameters and specifications as approved by a Shariah Board. In case of KMI 30 Index, it was
approved by Shariah Supervisory Board of Meezan Bank Ltd., chaired by eminent Shariah
scholar Justice (Retd.) Mufti Muhammad Taqi Usmani.