Stock Exchange

What is gillyflower replace? A nisus change is the commercialize steer for the leverage and sale of second hand securities. It provides trading facilities for var. brokers and change oerrs, to trade sh atomic number 18s of the listed companies and separate financial instruments much(prenominal) as Term Finance Certificates and Derivatives. gillyflower exchanges similarly provide facilities for the issue (listing), redemption (delisting) of securities and other working capital events including the allowance of income and dividends. It is a lynchpin institution for smooth lasting and steady suppuration of the corporate sector and can be seen as a key to the sparing life of a nation. convey exchange is the home of the capital and pivot man of the money food market place, providing proper mobility for capital. The securities of joint- argument companies, g all overnment securities and securities issued by semi-government brass instrument argon dealt with on a de clivity exchange. History of declivity Exchange The history of credit line exchanges can be traced to 12th century France, when the head start brokers (the role of an respective(pre nominal phrase) or a firm when it acts as an agent for a customer and charges the customer a commission for its operate) are believed to incur true, trading in debt and government securities.Unofficial share markets existed across Europe through the 1600s, where brokers would meet foreign or in coffee houses to pee trades. The Amsterdam Stock Exchange, created in 1602, became the prototypical official personal credit line exchange when it began trading shares of the Dutch eastern India Compevery. These were the depression appointer shares ever issued. By the early 1700s thither were to the full operational stemma exchanges in France and England, and America followed in the later disassociate of the century. Share exchanges became an important way for companies to raise capital for en thronisation, while in addition offering investors the opportunity to share in company profits.The early days of the roue exchange experienced many scandals and share crashes, as there was littler to no regulation and al virtually anyone was allowed to sparkicipate in the exchange. Today, stock exchanges operate around the earth, and they pack become highly regulated institutions. Investors absentminded to buy and sell shares must do so through a share broker, who give ins to own a seat on the exchange. Companies with shares traded on an exchange are said to be listed and they must meet specific criteria, which varies across exchanges. around stock exchanges began as floor exchanges, where mongers do deals face-to-face. The massivest stock exchange in the world, the New York Stock Exchange, continues to operate this way, but most of the worlds exchanges have promptly become fully electronic. Functions of Stock Market ? Ready Market Stock exchange is a continuous market for the resale of existing securities. It is a concentre where buyers and sellers assemble to deal in securities at any time during the phone by-line hours. It enables investors to realize quickly their shares and debentures.This celerity encourages people to invest in occupation enterp rotate by means of acquire industrial securities. It helps new investors to recover securities at any time at market cost. ? cheerive cover to investors Protection of the interest of the investors is another function of stock exchange. This it does by ensuring safety and uncontaminating dealing to the average investors through strict enforcement of its rules and regulations. Without the cover of a stock exchange there whitethorn be unfair competition among different brokers. The investors may be deceived by clever and dishonest brokers.In a stock exchange any malpractice by a broker carries a severe penalty. ? Profitable use of funds Another major function of the stock exchange is the mo bilization of surplus funds of somebodys firms and companies for investment in industrial securities. Without the stock exchange, these funds would have re main(prenominal)ed idle. It directs the surplus funds into the most profitable channel and thereby secures their effective utilization. People invest their savings in companies yielding good returns. Stock exchange in Pakistan In Pakistan there are three stock exchanges, ? Karachi stock exchange (KSE) Lahore stock exchange (LSE) ? Islamabad stock exchange (ISE) Karachi Stock Exchange The KSE is the first stock exchange of Pakistan established in September 18, 1947 and incorporated in March 10, 1949. KSE start with 5 companies with a paid-up capital of RS 37 million. The first tycoon was the KSE c index. KSE Indices Family ? KSE 100 The KSE100 index is a benchmark by which the stock worth performance can be compared to over a plosive consonant of time. In particular, the KSE 100 is designed to provide investors with a sense o f how the Pakistan truth market is performing.Thus, the KSE100 is similar to other indicators that track versatile sectors of the Pakistan economic activity much(prenominal) as the gross national product, consumer impairment index, etc. The KSE-100 Index was introduced in November 1991 with base care for of 1,000 masterminds. The Index comprises of 100 companies selected on the basis of sector representation and highest market capitalisation, which tracks over 85% of the ingrained market capitalization of the companies listed on the Exchange. ? KSE-30 Index The Karachi Stock Exchange has launched the KSE-30 Index with base value of 10,000 points, formally implemented from Friday, September 1, 2006.The main feature of this index that makes it different from other indices is ? Based on the surplus Float Methodology ? It includes only(prenominal) the top 30 most mobile companies listed on the KSE. ? KMI-30 ? Index introduced in September, 2008 ? Tracks the 30 most liquid sha ria-compliant companies listed at KSE weighted by free float adjusted market capitalization. ? Shariah Screening performed by Shariah Supervisory Board of Meezan Bank (chaired by Justice (Retd. ) Mufti Muhammad Taqi Usmani). ? KSE All Share Index ? It consists of all the companies listed on the KSE. ? KSE-GTOiOil &038 fluid Sector plays vital roles in Pakistans economy and therefore KSE has developed a Tradable Oil &038 Gas Index which tracks at least 80% free-float market capitalization of the Oil &038 Gas Sector. This index provides Investors and Market Intermediaries with an remove benchmark that captures the performance of each segment of the economy. KSE-100 Composition Basis The filling criteria for stock inclusion in the existing KSE-100 Index is found on three main filters, namely Sector rule, capitalisation rule and fail rule. The top sector companies may also qualify for inclusion on the basis of their market capitalization. Sector formula Largest market capitalizati on in each Karachi Stock Exchange sectors excluding Open-end Mutual Fund Sector ? The Largest Capitalization Rule The remaining index places are taken up by the hugest market capitalization companies in descending order. ? The Default Counter and Non Tradable Rule Company which is on the Defaulters Counter and/or its trading is suspended throw Non-Tradable (i. e. NT) in preceding 6 months from the date of re-composition shall not be considered in the re-composition of KSE-100 Index . How many stocks are registered and categories? The total number of companies listed in KSE is 572 with a listed capital of RS. 1103072. 80 million ? In KSE companies are listed under future(a) categories according to the nature of their industry. Sector Wise Categories of Companies Oil and Gas drug company and Bio Tech Chemicals Media Forestry Travel &038 leisure Industrial metals and mining Fixed line Telecommunication General industries Electricity Electronic and electrical Goods Multiutili ties Engineering commercial message Banks Industrial Transportation Non purport Insurance Support ser offenses Life insurance Automobile and Parts Real estate investment and ser offenses Beverages financial services Food Producers Equity Investment Instruments Household Goods software package and computer services Leisure Goods. Technology Hardware and Equipment personal Goods Personal Goods Tobacco Advance /Decline If there is increasing trend in the expenditures of share then we said that the market gains the index or points and vice versa. Points Points shows the Overall worth of the market. There are many factors that play the market points and due to these factors markets point increases or increases. These factors consist of formulae of capital structure and other related things. In Pakistan value of 1 point is approximately equal to 5 crores and it changes due to inflation and other economic factors. When an individual invest an amount equal to 5 Crores then 1 point increases and when he/she pull back his investment then 1 point decreases 1 point = 5 CroresStock ExchangeA stock market or equity market is a domain (a loose network of economic transactions, not a physical facility or discrete) entity for the trading of company stock (shares) and derivatives at an agreed price these are securities listed on a stock exchange as well up as those only traded privately. The size of the world stock market was estimated at about $36. 6 trillion at the start of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value,2 11 times the size of the entire world economy.The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The largest stock market in the linked States, by market capitalization, is th e New York Stock Exchange (NYSE). In Canada, the largest stock market is the Toronto Stock Exchange.Major European examples of stock exchanges include the Amsterdam Stock Exchange, London Stock Exchange, genus Paris Bourse, and the Deutsche Borse (Frankfurt Stock Exchange). In Africa, examples include Nigerian Stock Exchange, JSE Limited, etc. Asiatic examples include the Singapore Exchange, the Tokyo Stock Exchange, the Hong Kong Stock Exchange, the Shanghai Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such exchanges as the BM&F Bovespa and the BMV.A few decades ago, worldwide, buyers and sellers were individual investors, such as wealthy businessmen, usually with long family histories to particular corporations. Over time, markets have become more institutionalized buyers and sellers are largely institutions (e. g. , pension funds, insurance companies, mutual funds, index funds, exchange-traded funds, hedge funds, investor groups, banks and variou s other financial institutions). The rise of the institutional investor has brought with it some improvements in market operations.Thus, the government was responsible for decided (and exorbitant) fees being markedly reduced for the small investor, but only after the large institutions had managed to break the brokers solid front on fees. (They then went to negotiated fees, but only for large institutions. History Established in 1875, the Bombay Stock Exchange is Asias first stock exchange. In 12th century France the courratiers de change were concerned with managing and set the debts of agricultural communities on behalf of the banks.Because these men also traded with debts, they could be called the first brokers. A common misbelief is that in late 13th century Bruges commodity traders garner inside the house of a man called Van der Beurze, and in 1309 they became the Brugse Beurse, institutionalizing what had been, until then, an unceremonious meeting, but actually, the fami ly Van der Beurze had a building in Antwerp where those gatherings occurred the Van der Beurze had Antwerp, as most of the merchants of that period, as their primary place for trading.The idea quickly penetrate around Flanders and neighboring counties and Beurzen soon opened in Ghent and Amsterdam. In the middle of the 13th century, Venetian bankers began to trade in government securities. In 1351 the Venetian government outlawed spreading rumors intended to lower the price of government funds. Bankers in Pisa, Verona, Genoa and Florence also began trading in government securities during the fourteenth century. This was only possible because these were in dependent city states not ruled by a duke but a council of influential citizens.Italian companies were also the first to issue shares. Companies in England and the Low Countries followed in the 16th century. The Dutch eastern hemisphere India Company (founded in 1602) was the first joint-stock company to get a ameliorate capital stock and as a result, continuous trade in company stock emerged on the Amsterdam Exchange. Soon thereafter, a rich trade in various derivatives, among which options and repos, emerged on the Amsterdam market. Dutch traders also pioneered go around selling a practice which was banned by the Dutch authorities as early as 1610. 7 There are this instant stock markets in virtually every developed and most growing economies, with the worlds biggest market being in the United States, United Kingdom, Japan, India, China, Canada, Germanys (Frankfurt Stock Exchange), France, to the south Korea and the Netherlands. Importance of stock market The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise excess financial capital for expansion by selling shares of ownership of the company in a public market.The liquidity that an exchange provides affords investors the ability to quickly and easily sell securitie s. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. 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 oft considered the primary indicator of a countrys economic strength and development. revolt share prices, for instance, tend to be associated with change magnitude business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to bear on an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. financial constancy is the raison detre of central banks.Exchanges also act as the clearinghouse for each transaction, meaning that th ey collar 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. The smooth mental process of all these activities facilitates economic growth in that lower costs and initiative risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. Stock market index The movements of the prices in a market or section of a market are captured in price indices called stock market indices, of which there are many, e. g. , the S&P, the FTSE and the Euronext indices. Such indices are usually market capitalization weighted, with the weights reflecting the contribution of the stock to the index. The constituents of the index are reviewed frequently to include/ uprise stocks in order to reflect the changing business environment. Derivative instruments Financial innovation has brou ght many new financial instruments whose pay-offs or values depend on the prices of stocks.Some examples are exchange-traded funds (ETFs), stock index and stock options, equity swaps, single-stock futures, and stock index futures. These last two may be traded on futures exchanges (which are distinct from stock exchangestheir history traces back to commodities futures exchanges), or traded over-the-counter. As all of these products are only derived from stocks, they are sometimes considered to be traded in a (hypothetical) derivatives market, rather than the (hypothetical) stock market. Leveraged strategies Stock that a trader does not actually own may be traded utilise short selling allowance account buying may be used to purchase stock with borrowed funds or, derivatives may be used to control large blocks of stocks for a much smaller amount of money than would be postulate by outright purchase or sales. Short selling In short selling, the trader borrows stock (usually from his brokerage which holds its clients shares or its own shares on study to lend to short sellers) then sells it on the market, hoping for the price to fall.The trader eventually buys back the stock, making money if the price fell in the meantime and losing money if it rose. Exiting a short position by buying back the stock is called covering a short position. This strategy may also be used by unscrupulous traders in illiquid or thinly traded markets to artificially lower the price of a stock. Hence most markets either prevent short selling or place restrictions on when and how a short sale can occur. The practice of naked shorting is under-the-counter in most (but not all) stock markets.Margin buying In margin buying, the trader borrows money (at interest) to buy a stock and hopes for it to rise. Most industrialized countries have regulations that require that if the borrowing is based on confirmative from other stocks the trader owns outright, it can be a supreme of a certain p ercentage of those other stocks value. In the United States, the margin requirements have been 50 %% for many years (that is, if you want to make a $ super C investment, you need to put up $500, and there is often a attention margin below the $500).A margin call is made if the total value of the investors account cannot support the loss of the trade. (Upon a moderate in the value of the margined securities additional funds may be demand to restrain the accounts equity, and with or without notice the margined security or any others at heart the account may be sold by the brokerage to protect its add position. The investor is responsible for any shortfall following such agonistic sales. ) law of margin requirements (by the Federal Reserve) was implemented after the dash of 1929. beforehand that, speculators typically only needed to put up as little as 10 percent (or even less) of the total investment be by the stocks purchased. Other rules may include the prohibition of free -riding move in an order to buy stocks without paying initially (there is normally a three-day blessing period for delivery of the stock), but then selling them (before the three-days are up) and using part of the proceeds to make the original payment (assuming that the value of the stocks has not declined in theIn margin buying, the trader borrows money (at interest) to buy a stock and hopes for it to rise. Most industrialized countries have regulations that require that if the borrowing is based on collateral from other stocks the trader owns outright, it can be a maximum of a certain percentage of those other stocks value. In the United States, the margin requirements have been 50 %% for many years (that is, if you want to make a $1000 investment, you need to put up $500, and there is often a maintenance margin below the $500).A margin call is made if the total value of the investors account cannot support the loss of the trade. (Upon a decline in the value of the margined secu rities additional funds may be required to maintain the accounts equity, and with or without notice the margined security or any others within the account may be sold by the brokerage to protect its loan position. The investor is responsible for any shortfall following such forced sales. ) Regulation of margin requirements (by the Federal Reserve) was implemented after the Crash of 1929.Before that, speculators typically only needed to put up as little as 10 percent (or even less) of the total investment represented by the stocks purchased. Other rules may include the prohibition of free-riding putting in an order to buy stocks without paying initially (there is normally a three-day grace period for delivery of the stock), but then selling them (before the three-days are up) and using part of the proceeds to make the original payment (assuming that the value of the stocks has not declined in theIn margin buying, the trader borrows money (at interest) to buy a stock and hopes for it to rise. Most industrialized countries have regulations that require that if the borrowing is based on collateral from other stocks the trader owns outright, it can be a maximum of a certain percentage of those other stocks value. In the United States, the margin requirements have been 50 %% for many years (that is, if you want to make a $1000 investment, you need to put up $500, and there is often a maintenance margin below the $500).A margin call is made if the total value of the investors account cannot support the loss of the trade. (Upon a decline in the value of the margined securities additional funds may be required to maintain the accounts equity, and with or without notice the margined security or any others within the account may be sold by the brokerage to protect its loan position. The investor is responsible for any shortfall following such forced sales. ) Regulation of margin requirements (by the Federal Reserve) was implemented after the Crash of 1929.Before that, sp eculators typically only needed to put up as little as 10 percent (or even less) of the total investment represented by the stocks purchased. Other rules may include the prohibition of free-riding putting in an order to buy stocks without paying initially (there is normally a three-day grace period for delivery of the stock), but then selling them (before the three-days are up) and using part of the proceeds to make the original payment (assuming that the value of the stocks has not declined in theNew issuance Global issuance of equity and equity-related instruments totaled $505 billion in 2004, a 29. 8 %% increase over the $389 billion raised in 2003. Initial public offerings (IPOs) by US issuers increased 221 %% with 233 offerings that raised $45 billion, and IPOs in Europe, Middle East and Africa (EMEA) increased by 333 %%, from $ 9 billion to $39 billion. Taxation According to much national or state legislation, a large array of financial obligations are taxed for capital gai ns.Taxes are charged by the state over the transactions, dividends and capital gains on the stock market, in particular in the stock exchanges. However, these fiscal obligations may vary from jurisdictions to jurisdictions because, among other reasons, it could be assumed that tax is already incorporated into the stock price through the different taxes companies pay to the state, or that tax free stock market operations are useful to boost economic growth.