Top 10 Ways to Invest in Pakistan

There are multiple times in a person’s life where they think about investing their hard-earned money. However, they do not pursue this interest since they are afraid of being scammed or putting their life long earnings at risk. It is advised to save some of your disposable income, however, saving too much of it reduces your chances of effectively growing your wealth. This blog aims to highlight numerous safe ways through which you can invest.

Stock Market

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Beginner’s Guide to Investing in Pakistan Stock Exchange

If you have ever heard about investing in Pakistan Stock Exchange but have not been able to do so due to lack of adequate information, this blog should help simplify your concerns. A Capital Market is a type of Financial Market that deals with exchange of stocks, bonds, commodities etc. These securities are mostly long-term investments that yield fruitful returns in the long run. A stock market is a subset of a Capital Market that only deals with the buying and selling of shares issued by a corporation. The buyer and seller are both kept anonymous when these transactions are being made. Warren Buffet, one of the most successful investors till date stated, “All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies”. This blog aims to educate you on 10 different ways to generate passive income from the comfort of your home.

Opening an Account with a Brokerage Firm

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What is K-trade Application and how to Sign up for it?

K-trade is a retail stock trading application owned by K-trade Securities (formerly Khadim Ali Shah Bukhari Securities). The app delivers a seamless process of signing up for a brokerage account and online stock trading. The application was launched in 2019, over 250,000 users have registered on the application to date. K-trade is also known for charging the lowest commission in the industry.
The application is easily downloadable from the Play store/ App store, once downloaded the users can sign up for a trading/virtual account straight away. Upon launching the application for the first time, a sign-up window will pop up which requires basic details like name, cellphone number, email address, and city of the user, once the required details have been submitted the user will receive an OTP (one time password) on the provided email address. The submission of OTP will mark the conclusion of the sign-up process and the user can log into their K-trade account. K-trade allows its customers to start stock trading as low as PkR 5,000.
The application has two modes real and virtual. The app allows you to switch to the virtual mode by selecting the option on the top right corner, by choosing the virtual mode, the user will have PkR 1 million of virtual money and can start virtual trading with that. This mode is an excellent opportunity to practice trading before investing real money. Apart from this, the users of K-trade are also provided with customer service, trader’s assistance, and access to an exclusive research portal to guide the investors in making a well-informed decision. The research portal includes detailed research reports on companies, economy, and performance indicators of all the listed companies.

All the users of K-Trade application are provided with a standard watchlist initially. However, you can modify the watch list and add/ remove as many stocks as you want. The watchlist displays the real-time update of the stock performance and is linked with the PSX portal. To add stock, the users simply need to type the desired stock’s symbol on the search bar provided and select it. The stock will then permanently be added to the watchlist. To remove a stock from the watchlist, select the already added symbol and opt for the removal from the watchlist option. Shares can be bought or sold through two options on the application, directly from the watchlist or through the “trade” option in the listed menu on the left. To buy/sell directly from the watch list, simply select the desired stock and choose “the buy/sell” option, this will direct the users to the trade window. To execute an order, two fields are required i) the number of shares to be bought/sold and, ii) the rate at which the user wants to buy/sell. To confirm the order, the app requires a pin code which is “0000” by default for all the users.
Once the order is executed, the application will show a confirmation pop-up. The users can view the orders in line (not executed yet) by selecting the transaction option from the list down menu, the user can also cancel the non-executed orders in this window.
The other option along with the watchlist on the main screen is the portfolio, the users can see their real-time portfolio performance in this section. This option shows the total investment, net worth, buying power, and profit/loss of the user at a particular time.
The portfolio shows a detailed breakdown of return from each stock to date

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What is Capital Market

In an economy, some individuals/ institutions have an idle cash surplus, while some have a cash deficit and are struggling to raise funds, that is where capital markets step in. Capital markets are financial markets where the trade of different financial assets takes place. It is a channel for buyers and sellers to trade bonds, stocks, currencies, etc. Capital markets provide the opportunity to deploy idle savings of individuals and institutions. They provide access to market participants for raising funds and are closely linked with the development of an economy. Economies with stable capital markets have faster economic growth and development than those with underdeveloped capital markets. The absence of an advanced capital market leads to the underutilization of financial resources. Developed capital markets open doors for foreign investment in the domestic market. There are two kinds of capital markets, primary and secondary, is primary capital market financial instruments are issued for the first time, to raise funds through an IPO (initial public offering). Whereas, in a secondary capital market, already issued financial instruments are being traded, which is also known as the stock exchange. The capital market structure of Pakistan consists of the Securities and Exchange Commission Pakistan (SECP), Pakistan Stock Exchange (PSX), Mercantile Exchanges, Central Depository Company (CDC), and a Clearing and Settlement Company. Additionally, this structure is also supported by intermediaries like brokers who facilitate the market participants in executing their transactions.

The stock exchange or Equity market is a capital market where individuals and institutions can issue, buy and sell the share of public listed companies. Stock markets help the organization to raise funds, gain quick access to capital and provide individuals part ownership in an organization with the likely hood to receive gain based on the future performance of the company. The stock exchange doesn’t itself take part in the trading activity but regulates the trades made by market participants. Pakistan Stock Exchange was formed on January 11, 2016, it has over 552 companies listed with a total market capitalization of PkR 7,415 bn (as of 6th December 2021).

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