Investing in stock market in Pakistan has captured the imagination of a lot of people over the last few decades with amazing stories of overnight success and riches rutted against squalid tales of stock market crashes and some grey areas in between that are beyond the understanding of a layman who has zero knowledge when it come to this.
But, one should not be mesmerized by what is seen by him on the screen in glamorous Hollywood movies. Because, in reality dealing with shares in stock market or working in a stock market is not always about finding a shortcut or one way ticket to success or beating the system. It is rather a skillful and tactical battle about choosing a company whose profits and shares in the near future will grow or multiply over time resulting in monetary benefit for the shareholder. But, before we go in to the depths and details of buying shares in stock market we must develop a sense as to what a share actually is and why it is put out on sale by companies to be bought and sold by the people and how it ends up earning profits for us.
What is a share?
In its most simplest and crude form a share is basically a single unit of ownership in a company or organization. Companies belonging to different walks of life put their shares up for sale in a market which is known as the stock exchange market and give the people an opportunity to invest in their company and earn profit. When an individual buys the shares of any one of the companies that are listed on the stock exchange, he owns a small part of that business.
How to Buy Shares in Stock Market in Pakistan?
How does one buy shares in stock market in Pakistan? How can one put trust other people with his money in times where people get swindled with such ease and grace? The answer to that is simple, Brokers. Brokers are third parties that deal with the actual buying and selling of shares of various companies. They not only are a safe source to trust with your money but also effects means of getting away and saving yourself from all the tedious hassle of buying shares from the market. A lot of major banks and other firms offer brokerage services for certain percentage of your actual payments that you make when you are purchasing shares in stock market.
How is profit earned through shares in stock market in Pakistan?
The main purpose of taking a leap of faith in the stock market is to earn money and that is achieved by any one of the two following ways: an increased share price or a share in the company’s profits. In the first case, the profit earning scheme is simple yet genius. You just simply buy the shares of the company and wait for the company to hit it big and its stock prices to go high. Then, you can sell your shares in stock market at a higher price than you had initially purchased them for and earn a healthy profit from them. But this does come with the slight drawback of you ending up losing money when the stock prices drop. The other way you might gain profit from investing money in stocks is by receiving dividends from the company. The dividends are basically a portion of the company’s profits that it pays out to its stockholders. The company’s are not legally obligated to pay their stockholders a share of their earned profits. But, they do this in order to show their gratitude to them and also to reward them for putting their trust in their company and trusting them with their money.
Future of Stocks in Pakistan and Current scenario
In Pakistan the future of investing shares in stock market is bright but full of treacherous turns. Just as Wall Street is the hub of all stock market related activity in the US. The biggest stock market in Pakistan is Karachi Stock Exchange and deals with selling and buying of shares of different companies in stock market. Other than KSE there is LSE Lahore stock exchange but anyone who wants to become the success story of turning from rags to riches has to give his luck a try at the testing grounds of KSE in hopes of hitting it big.
Difficulties to Buy Shares in Pakistan
However, buying shares in stock market in Pakistan isn’t exactly a walk in the park. It is said so because unlike foreign countries the buying and selling methods of stocks here in Pakistan are a bit complicated and difficult to grab a hold off. In Pakistan, there aren’t many brokerage firms out there that can lend you trustworthy hand and lead you across the tricky roads of shares in stock market in Pakistan. Apart from this there aren’t any online websites for stock dealings that would allow people to deal with buying and selling of stocks from the ease of their homes.
Another difficulty that makes it hard for people to buy stocks in Pakistan is the volatility and unpredictability of the stock market in the country. The country as it stands has tremendous potential for growth and presents a million opportunities for stock investors to fill their pockets with money.
But, its misfortune is that it is plagued by terrorism and hence the market keeps fluctuating at an uneven pace causing the stock prices of companies to sky rocket through the roof one day and hit rock bottom the other. Thus, no matter how carefully one tries to select the stock to invest in he runs the risk of end up losing all the money that he has invested. The situation in the country however seems to be getting better and opportunities to invest are beginning to rise and it is only a matter of time before the market here in the country gets stable.
Thus, the need of hour is to improve on the current stock buying system here in Pakistan, and make it more accessible and within the reach of the common man. So that common people of the country can buy shares in stock market in Pakistan and also get a taste of the incoming days of economic growth.