Guide on Investing in the Pakistan Stock Exchange
For those interested in investing in the Pakistan Stock Exchange (PSX), here's a comprehensive guide on how to open a trading account.
Steps to open an investing account:
- Choose a brokerage firm licensed to operate with PSX. The brokerage firm serves as an intermediary to the stock market, facilitating your transactions.
- Fill out the Account Opening Form provided by the broker. Ensure all information is accurate to avoid any future complications.
- Submit required documents. These typically include a copy of your CNIC (front and back), proof of income, bank account details, a recent utility bill, cheque or fund transfer confirmation as initial investment/funding, and email and mobile number registered in your name. Some brokers may require additional documents such as a Zakat Declaration Form on stamp paper (optional).
- Upon submission and verification, the brokerage will open your trading account along with a Central Depository Company (CDC) sub-account where your shares will be held electronically.
- Fund your account. You can fund your account either through cash or shares (physical or CDC-held).
- You will then be ready to start buying and selling shares on the PSX through the broker’s platform.
The entire process usually takes about 3 working days after submitting all documentation and funds.
Required documents typically include:
- Copy of CNIC (front and back) of the applicant and nominee.
- Proof of income (such as salary slips or business proof).
- Bank account details for transactions (registered in your name).
- Recent utility bill as address proof.
- Cheque or fund transfer confirmation as initial investment/funding.
- Some brokers may require a Zakat Declaration Form on stamp paper (optional).
- Email and mobile number registered in your name.
- For trading via Sahulat account, similar documents including bank and income proof are required.
A word of caution
Patience is a fundamental tip for profiting in investments, according to IGI Securities Assistant Manager Equity & Commodity Sales Inam Shakir. Panic selling of shares can lead to losses. If the investor fails to make a transaction within this time, they must pay 25% over the borrowed money.
Getting started
To find a brokerage firm, visit psx.com.pk and click on "Find a Brokerage Firm". With the PSX seeing growth over several months, driven by strengthened macroeconomic indicators, and numerous investors experiencing exponential growth in the past one and a half years, now might be the perfect time to start investing.
This article was contributed by Baseer Ahmed, Head of Political Desk at Business Recorder (Digital).
[1] PSX Website - Account Opening
[2] PSX Website - Find a Brokerage Firm
[3] PSX Website - Sahulat Account
[4] PSX Website - Zakat Declaration Form
- Investing in the Pakistan Stock Exchange (PSX) requires choosing a brokerage firm, which serves as an intermediary to facilitate transactions.
- To open an investing account, fill out the Account Opening Form provided by the broker, ensuring all information is accurate.
- Submit required documents including a copy of the CNIC, proof of income, bank account details, utility bill, initial investment, Zakat Declaration Form (if necessary), and email and mobile number.
- Upon verification, your trading account will be opened along with a Central Depository Company sub-account where your shares will be held electronically.
- Fund your account through cash or shares, then start buying and selling stocks on the PSX.
- The entire process typically takes 3 working days after submitting all documentation and funds.
- IGI Securities Assistant Manager Equity & Commodity Sales Inam Shakir advises patience in investments as panic selling can lead to losses. Additionally, if an investor fails to make a transaction, they must pay 25% over the borrowed money. Furthermore, the PSX has seen growth over several months, suggesting now might be a good time to start investing.
