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After the selection of your brokerage firm, you will open a Brokerage Account. You must ensure that the said Account is opened in your name. You will be given a Client Identification Number or an Account Number against this account. Read the terms & conditions prescribed in the Account Opening Form and make sure that they match with the Standard Account Opening Form available on the PSX website.

Subsequently you will open a CDC Sub Account. The CDC Sub Account is the account where your purchased shares will be placed.

You are also encouraged to open a CDC Investor Account. This account is opened at the CDC, thereby adding to greater safety and individual custody of your shares.

You must make sure that you are assigned a Unique Identity Number (UIN). It is this number against which all your brokerage accounts and transactions will be recorded.

You will also need to deposit initial funds to purchase shares. Make sure that it is not a cash deposit.


Once you have decided which companies’ shares to buy, you should place your orders through your stock-broker (or through the online application provided by your brokerage firm)

After placing the order and execution of the same, you should get a Trade Confirmation against your executed order.


The shares purchased or sold are settled (payments made or received) through NCCPL (National Clearing Company of Pakistan Limited). The exchange of shares takes place through the CDC (Central Depository Company Limited). These two organisations and the brokerage firms/ TREC holders form the major part of the ecosystem of PSX.


Many brokerage firms offer Online Trading facility for its customers. This allows you as an investor to trade by yourself on the Stock Exchange through the online application or software.


There are several taxes and charges applicable on shares trading at PSX; the basic ones are listed as follows:

CGT (Capital Gains Tax) [Tax Return Filers: 15%, Tax Return Non-filers: 20%], Brokerage Commission [varies amongst brokerage firms], and CVT etc.


  • Define your investment objectives.
  • Shortlist a number of registered and licensed brokerage firms based on your preferences.
  • Select a brokerage firm that fits your requirement.
  • Open a Brokerage Account, CDC Sub Account and a CDC Investor Account.
  • Deposit funds in your account through cheque.
  • Select the companies to invest into based on some or all of the parameters mentioned in the Basic Guidelines for Stock Investment, your preferences and discussing the same with your stock-broker. Thereby building your portfolio.
  • Start investing.

Enclosures (for individuals):

  • Attested copies of National Identity Card of the applicant.
  • Attested copies of National Identity Card of the Joint Holders and or Nominee(s) (if applicable)
  • Attested copies of passports of the applicant, Joint Holders and or Nominee(s) (in case of non-residents)
  • Copy of the letter of authorization from the Account Holder(s) of the person authorized to trade in my/our accounts (if other than the account holder).
  • A list of Transaction fee, Commission to be charged by the Broker and other CDC charges to be levied.

Enclosures (for corporate entities):

  • Certified true copy of Board Resolution (specimen provided as per Annexure-A below).
  • Certified true copies of Memorandum & Articles of Association.
  • List of authorized signatories.
  • List of nominated persons allowed placing orders.

You can invest and trade in the stock market through TREC (Trading Rights Entitlement Certificate) holders/ brokerage firms recognised by PSX and licensed by the Securities & Exchange Commission of Pakistan (SECP).

You must shortlist a number of brokerage firms based on your individual preference. You must talk to the shortlisted firms and make your final selection based on your requirements. You may select your brokerage firm depending on:

  • Ease of communication & understanding of your defined investment objectives.
  • Availability of research material.
  • Availability of online trading facility.
  • Provision of trade confirmations.
  • Brokerage charges levied.
  • Physical proximity to your work-place or residence.

Why Save & Invest:

You want to live your life and follow your dreams. We all have a list of things that we want to achieve in our lives which require money to attain them. These may include goals for the near future like:

  • Planning the next vacation
  • Buying a home theater
  • Planning a destination wedding
  • Renovating your house
  • Upgrading your car

There is also a list of things you have to do in the distant future. These life goals may include:

  • Children’s college and university education
  • Investment for retirement
  • Entrepreneurial set-up
  • Buying your own house

All these life goals are achievable if you plan well, save early and invest prudently

While planning our investments we must also account for the unforeseen and emergency situations we may be faced with. Life is unpredictable and we can come across any situation like:

  • Severe/ terminal disease
  • Accidents
  • Loss of employment or business downturn

All the above need planning our investments. In order to invest, we begin with savings. We must invest our savings to ensure:

  • We beat the effects of inflation which eats up the value of our money.
  • We multiply/ increase the value of our money saved instead of leaving it idle

If you have thought of all of the above, Congratulations - You are ready to save and invest!


You can start saving as early as possible. Perhaps a chunk of your salary should be saved every month until you have enough to invest; a rule of thumb is to save 20% of your income. At the same time, if you have family support or other sources of income, a monthly addition of these funds can definitely help you save more until you have enough funds to start investing.


There are many savings & investment plans and products available in the market to choose from. If you keep your money in a bank account, you will get nominal returns on your savings. However, you are bound to get higher returns and cushion yourself against risk if you can invest your savings in a diversified portfolio of different investment vehicles such as:

  • Bonds
  • Treasury Bills (T-Bills)
  • Term Finance Certificates (TFCs)
  • Mutual Funds
  • Stocks


It is always a good idea to invest your money where you get good returns.

The stock market is one such avenue where there is good upside potential, historically, and where the returns have been higher than those from other investment avenues. Investing for the long term is a better option than investing for the short term in the stock market. It will not only allow you to compound your earnings but will also enable you to earn dividends which can be re-invested in the stock market, thereby increasing your earnings. So you must focus on compounding your earnings, reinvesting your dividends, and achieving capital gain.


By purchasing shares of the selected companies, you build your portfolio of stock investments. This portfolio is formed and selected on the basis of:

  • Company
  • Sector
  • Returns you are expecting
  • Risk capacity (how much can you invest in spite of market volatility)
  • Risk tolerance (how much market downturn and volatility can you sustain)
  • Payouts (dividends or bonus shares)
  • Any other considerations you may have according to your stock investment preferences

By purchasing the shares of a company, you become a shareholder of that company and are entitled to dividends and other payouts such as bonus or right shares issued by the said company, along with the advantage you can have of capital gain from increase in price of the shares.

If you have decided to invest in the stock market, then it is a decision well worth taking. Consider this that Pakistan Stock Exchange has performed better over the last several years, above and beyond most other investment vehicles available in the country

Returns earned from the Stock Exchange compared to other asset classes over the eleven year period ended 30th June 2022:

*Data as of 30th June 2022

*(Returns are shown on compounded annual basis)

The KSE-100 Index provided compounded annual returns of 11.92% over the last eleven years, June 30th, 2011 to June 30th, 2022. These figures compare fairly well with other avenues of investment in Pakistan.

The fact that the Pakistan Stock Exchange has given good returns historically, it is safe to say that investment in stocks in Pakistan Stock Exchange may well be worthwhile for the long run


The stock market is a place where companies list themselves to make their shares available to a broad range of investors to purchase these shares. You, as an investor, have the option to choose from multiple stocks of different companies to buy in order to build your investment portfolio. The share prices of the shares listed on the Stock Exchange fluctuate according to the buy & sell transactions taking place.



The main purpose of the stock market is raising of capital through investment in shares of listed companies. Listed companies are those which issue shares in the stock market to raise capital. This is done either through an Initial Public Offering or Rights issue.

An IPO or Initial Public Offering (Primary market) is the issuance of shares by a company in the stock market in order that its shares are purchased by the general public. Once the IPO has taken place, the shares continue to be traded in the stock market (Secondary market), changing hands between buyers and sellers.

Another way a company raises its capital is by issuing right shares at a certain price to existing shareholders. A shareholder interested in purchasing the right shares may do so if he deems it fit.


Pakistan Stock Exchange consists of a list of more than 500 companies in more than 35 different sectors or industries. The total Market Capitalisation (volume of outstanding shares x share price) was Rs 8.24 trillion as of July 30th, 2021


Index is a grouping of selected companies’ stocks according to certain financial parameters in order to measure the performance of a section of the stock market.


There are 14 Indices listed on PSX which are:

  • KSE 100 Index
  • KSE All Share Index
  • KSE 30 Index
  • PSX-KMI All Shares Index
  • KMI 30 Index
  • BKTI (Tradable Banks Index)
  • OGTI (Tradable Oil & Gas Index)
  • NITPG Index
  • UPP9 Index
  • MZNPI Index
  • NBPPGI Index
  • PSX Dividend 20 Index
  • JSMF Index
  • ACIETF Index


For those investors who want to invest in Shariah compliant companies, there are listed companies on the Stock Exchange which are Shariah compliant. The PSX-KMI All Shares Index & the KMI 30 Index (KMI: KSE-Meezan Index) represent listed companies which are Shariah compliant. There are more than 200 companies listed on the PSX-KMI All Shares Index. The PSX-KMI All Shares Index & the KMI 30 Index were developed by PSX and Meezan Bank Limited. The listed companies’ Shariah compliance status is based on certain technical parameters and specifications as approved by a Shariah Board. In case of KMI 30 Index, it was approved by Shariah Supervisory Board of Meezan Bank Ltd., chaired by eminent Shariah scholar Justice (Retd.) Mufti Muhammad Taqi Usmani.



A basic guideline is to understand what you really want from your stock investment

  • Do you want to invest for the short term (1-3 years), medium term (3-5 years) or for the long term (5 years or more)?
  • Do you want to invest for dividends or for capital gain or for both?
  • How much risk can you take in terms of market downturns?

These are the basic questions you must address before investing

Optimally, you may want to invest in stocks for the long term, in order to earn dividends (periodically, through dividend yielding stocks) and for capital growth (gain in share price) over a number of years


As mentioned earlier, it is important to have a diversified portfolio of investments. You can have a diversified portfolio of stocks in order to cushion the effects of market downturns & volatility and to keep your total investment relatively secure.

You can diversify your portfolio by

  • investing in different products listed on the Stock Exchange such as stocks of listed companies, T-bills and mutual funds
  • Investing in stocks on the basis of different industrial sectors or their market capitalisation
  • Investing in stocks based on shares that give dividends or shares that provide for sufficient capital gain or both
  • Investing in stocks with different risk/ return levels. Some providing greater returns while others providing less returns. At the same time, the risk level of former will be greater than that of the latter


You must evaluate how much risk you can take/ what is your risk tolerance level if the market takes a downturn.

  • If you are risk-averse, your investment portfolio of stocks should be passive. In this way, you will be assured of receiving a return at market risk level.
  • If you are less risk averse, your investment portfolio can be a combination of stocks which provide for returns at market risk level and above market risk level
  • If you are investing as an aggressive investor, you can invest in stocks which provide for higher returns reflective of higher than market risk

Having a balanced portfolio with different market risk levels of shares and their returns is usually a good combination to build a portfolio of stocks.

You must also understand your risk-taking capacity. How much are you able to invest in the stock market in the face of the downturns and volatility it is undergoing?


In order to select the companies you want to invest into, you may want to look at:

  • The fundamentals and financials of the companies
  • The volume of activity in the stock market
  • The prevailing share price
  • The Price to Earning ratios (P/E)
  • The Earning per Share (EPS)
  • The indices in which the companies are listed (are they blue-chip KSE 100 Index companies?)
  • The annual payouts given by the companies
  • The industry/ sector performance of the companies

The above are some of the guidelines you may want to go by in order to select the companies you want to invest into.


A lot of investors are usually confused when to enter the market and when to exit it. It is a safe proposition to enter the stock market when the Price to Earning ratios are low and the stock market is in an oversold position. Similiarly, it may be profitable to exit the market when the opposite conditions are true. But, as a general rule, it is not when you enter or exit the stock market, but how long you can stay in it.

To help you safeguard your interest and to avoid complaints against the stock-broker, here are some easy tips:


  • Before selecting a brokerage firm, visit the offices of a few of them to observe their business practices. Try to gauge the reputation of the brokerage firm by talking to people you meet.
  • Make sure that the brokerage firm and its branch(es) is/ are registered with the Securities & Exchange Commission of Pakistan (SECP).
  • Get clear information on the commission rates and services provided and compare these with those of other brokers.


  • You would need to open a Brokerage Account with the brokerage firm. Subsequently, you would also need to open a CDC Sub Account/ CDC Investor Account. It is important that you open the account(s) in your name.
  • Thoroughly read and understand the terms and conditions of the form of the Brokerage Account. Strike out any inapplicable clause and sign the same. Get the deleted clauses signed by the brokerage firm as well.
  • A CDC Investor Account is more secure than a CDC Sub Account; hence more preferable. You stay in control of your securities because they can only move once you give a transaction order.


  • Obtain your Client Identification Number or Account Number as assigned by the brokerage firm.
  • Obtain your Universal Identification Number or UIN issued by the National Clearing Company of Pakistan Limited (NCCPL).
  • Instruct your stock-broker in writing to always enter the Client Identification Number & UIN in the trading system of the exchange while executing your trades. This would help in setting an audit trail oli trades made on your account.
  • Make sure that all receipts/ confirmations etc. are issued/ made in the name of the brokerage firm on their stationery bearing their name.
  • Obtain periodic statements from your brokerage firm to keep a check on your trade positions and account balances. Also get a periodic Sub-Account statement from the Central Depository Company to verify your securities and their movement.
  • Make sure to receive and check your Trade Confirmations against any stock trades executed, from your brokerage firm.


  • Try to place your trade orders through one person rather than through several, in order to reduce chances of any misunderstanding.
  • Ensure that every time you buy shares, you get them transferred to your CDC Sub Account/ CDC Investor account on the settlement day only.
  • In case of any discrepancies, contact your stock-broker immediately. Don’t make simplistic assumptions or leave things to chance.


  • Define your investment objectives well and be clear of your risk-tolerance threshold and risk-taking capacity.
  • Know your financial capacity and needs well. Stock prices keep falling and rising. Losing money in a stock trade is not your stock-broker’s responsibility. Stand by your decisions.
  • Avoid discretionary trading accounts whereby the brokerage firm is given the freedom to execute trades for you.

Pakistan Stock Exchange has embarked on a Financial Literacy Initiative to educate potential investors about investment basics, financial planning, and stock market investments. The Initiative seeks to educate the general public about defining their investment objectives, what to expect from the stock market, begin investing in the stock market, securing their brokerage account, dos & don’ts of investing in the stock market, and considerations while investing. The Initiative also seeks to educate the general public about the operational, strategic and regulatory developments taking place at PSX.

For any further information and queries regarding the Financial Literacy Initiative or for arrangement of Financial Literacy sessions for your organization/ institution, submit your query by clicking below.