Introduction to Stock Markets in Pakistan

Topics: Stock market, Stock, Stock exchange Pages: 3 (800 words) Published: January 21, 2013
What is Stock Market?
A stock market is a public entity which is a loose network of economic transactions, not a physical facility or discrete entity for the trading of company stock and derivatives at an agreed price. The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange affords the investors gives them the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. The stocks are listed and traded on stock exchanges which are entities of a corporation of mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. Market participants include individual retail investors, institutional investors such as mutual funds, banks, insurance companies and hedge funds, and also publicly traded corporations trading in their own shares. An economy where the stock market is on the rise is considered to be an up-and-coming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development Stock Markets in Pakistan:

Karachi Stock Exchange:
The Karachi Stock Exchange (KSE) was established on 18th September, 1947. It was later converted and registered as a Company Limited by Guarantee on 10th March, 1949. Initially, 90 members were enrolled, however, only half a dozen of them were active as brokers. Similarly only 5...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Stock Market Essay
  • Stock Market Essay
  • stock market Essay
  • History of the Stock Market Essay
  • Essay on The Australian Stock Market
  • Stock Market in Vietnam in 2009 Essay
  • Financial Markets in Pakistan Essay
  • Derivative and Its Impact on Stock Market Research Paper

Become a StudyMode Member

Sign Up - It's Free