FAQs
The stock exchange provides a market place where shares can be bought and sold.
Each share represents a small stake in the equity of a company. You can buy large or small lots to match the amount of money you want to invest. A company’s share price can rise or fall as a result of its own performance or market conditions.
- Why Do Companies Issue Shares?
Companies issue shares to raise money from investors. This money is used for the development and growth of businesses of companies.
- Why Do Investors Buy Shares?
Shares can provide you with a regular stream of income through dividends as well as the potential for your investments to grow in value. If the prices of shares go up, you can sell them for more than you paid. This is called capital gain.
Dividends are returns paid to shareholders out of the profits of the company.
With good management, the value of your investment in shares of a company can grow over time so that your shares are worth more than you paid for them. This is capital growth.
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.
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.
- What are the different types of Orders?
There are two types of orders:
Limit 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.
You should always ensure that the stockbroker you choose is licensed by the Securities and Exchange Commission of Pakistan (SECP) to trade.
