how to invest in Pakistan stock exchange in 2023

If you are finding an answer to how to invest in the Pakistan stock exchange, then you are in the right place. PSX (Pakistan stock exchange) is a Pakistan-based platform where you can buy or sell shares of listed organizations. However, you need a brokerage account to invest in PSX (Pakistan stock exchange). Moreover, You will operate in PSX through your brokerage account. So, You need a middleman, a stockbroker, to connect you with the PSX (Pakistan stock exchange) market. IN addition, you will select a stockbroker before opening a brokerage account. A stockbroker will facilitate you understand how to invest in the Pakistan stock exchange and make transactions In the PSX market.

There are two types of companies listed in PSX. The first is privately listed, and the other is publicly listed companies. An ordinary person can buy or sell shares of a public sector company in PSX through their PSX brokerage account. Although, You can find publicly listed companies on the PSX website and choose to buy shares of any public sector company. However, we recommend you select a brokerage firm, discuss your investment purpose, and take their input to make a decision. 

Now we will guide you in selecting a stockbroker to guide you on how to invest in the Pakistan stock exchange.

How to invest in Pakistan stock exchange

We will list down the procedure to understand how to invest in Pakistan stock exchange and discuss step by step in this article.

• How to select a brokerage firm
• List of brokerage firms available in the PSX market
• Questionnaire for selection of a brokerage firm
• Selection of a brokerage firm
• Register a PSX brokerage account
• How overseas Pakistani can register a PSX brokerage account
• Operation of PSX account

How to select a brokerage firm

You will choose a brokerage firm that will help you register a PSX brokerage account, and you will be able to sell or buy shares in the Pakistan stock exchange. Moreover, You will have many options for brokerage firms in the market and choose the best brokerage firm for your investment in PSX. You will find more than 200 brokerage firms that are active in the PSX market.

 However, the brokerage firm that suits you from these options is a question. First, you will draw a questionnaire o select a brokerage firm by elimination method. In addition, You will list all available best brokerage firms options and select on behalf of a questionnaire. For your convenience, the list of public brokerage firms is given in the next section.   

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List of brokerage firms available in the PSX market

The brokerage firm names,  phone numbers, and email addresses will be found. Furthermore, You can collect information through phone calls or email. There are more brokerage firms available on the website of PSX. You can also get more options from the website of PSX.

Questionnaire for selection of a brokerage firm

We will help you develop a questionnaire to shortlist the best options for your brokerage firm to help you understand how to invest in the Pakistan stock exchange. Now we will enlist the criteria on which you will make a questionnaire.

Define a clear objective of your investment and find out which brokerage firm can understand your investment objective and have accessible communication on your objective

• Investment advice quality of brokerage firm
• Research a brokerage firm that will help you to choose stocks and sector
• Brokerage firm facilitates online trading
• Brokerage firm provides Confirmation of trade
• Levied brokerage charges
• The physical distance between the brokerage firm and your residence or workplace
• Brokerage firm provides you with the facility for sending documents about account through the courier
• Can you collect the account-related documents from the brokerage firm

These are the directions that will help you determine your desired brokerage firm. Although, You should develop a healthy, trusty, sensitive, and understanding relationship with your brokerage firm to get up-to-date data about your investment and PSX market up-downs. Moreover, the brokerage firm will help you enhance your profit in PSX. We are guiding you on how to invest in Pakistan stock exchange.   

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Selection of a brokerage firm

You have shortlisted the brokerage firms on behalf of a questionnaire you developed and now we will guide you to further eliminate the undesired firm from the remaining brokerage firms list.

In the first step, you should visit the brokerage firm’s website and explore the quality of the available content about the PSX, stocks, and sectors. Secondly, you should meet the brokerage firm representative personally, which will help you understand the firm’s working capability, operational style, and work ethic. It would help if you also considered that you could visit the brokerage firm’s office physically weekly.

It would help if you considered other criteria before selecting your brokerage firm; that is, the firm is clear from any regulator or legal issue. Moreover, the brokerage firm has no suspension notice on behalf of any operational offense or oversight in the past or present. Furthermore, any other client of the brokerage firm does not lodge any complaint against the brokerage firm. The information about the complaint against any brokerage firm is available on the website of the PSX. (https://www.psx.com.pk/psx/resources-and-tools/investors/investors-complaints). It is better to meet any client of your chosen brokerage firm and ask them for advice about the brokerage firm and note the discussion.      

You must take care of your brokerage account and investment in the PSX. Furthermore, You have to select a brokerage firm that understands your investment need and helps you grow.

Register a PSX brokerage account

You have selected a brokerage firm for opening a PSX brokerage account. You will now fill out a SAOF (Standardized Account Opening Form) form to open a brokerage account. After opening the brokerage account, your CDC (Central Depository Company) sub-account will automatically enable.

The CDC account will hold your shares and be used for transaction purposes. For example, when you purchase shares, the shares will be credited to your CDC account in the same amount you purchased. On the other hand, the same amount of shares will be debited from your CDC account when you sell the shares. A brokerage firm may hold a lot of sub-accounts, but it has only one participant or main account.

It will help if you verify the accuracy of the terms and conditions of the account opening form provided by the brokerage firm and compare it with the standardized account opening form available on the PSX website. 

You will give the brokerage firm’s representative the power of attorney or authorization to operate your account and buy or sell shares.

We recommend opening a Central Depository Company (CDC) investor account. This account will help you to take your shares into your custody.

How overseas Pakistani can register a PSX brokerage account

Pakistanis who live abroad and want to learn how to invest in the Pakistan stock exchange can also register their brokerage account. They will open a Roshan digital account online in any supported bank (Meezan bank, MCB, HBL, UBL or National bank). After opening the Roshan digital account, they will select a brokerage firm online and open a brokerage account online from their living country.

 Overseas Pakistanis looking to settle in Pakistan have a golden opportunity to invest in PSX because PSX gives 17% to 1700% profit. Moreover, they can hold their investment for the long term, like five years, and a long-term investment in PSX returns more profit than a short-term investment. You only need to choose a good brokerage firm that suggests t a growing sector in the PSX  to get more profit.

Operation of PSX account

When you fill out the PSX account opening form and sign in, you will require a minimum amount to deposit to make the account operational. The minimum amount needed to operate the account is 25000 (twenty-five thousand). We also recommend that you should deposit the amount through a cheque. It would help if you also got information about imposed charges and taxes by the stock exchange, National Clearing Company of Pakistan Limited, Central Depository Company Limited, Federal Board of Revenue, and Securities & Exchange Commission of Pakistan on the transaction in PSX. 

When you register for a PSX account and your account is operational, you can buy or sell shares of a publicly listed company in the PSX. You should take a confirmation message o your buying or selling of shares in PSX from your brokerage firm. Moreover, you must collect account statements and ledger from your brokerage firm after every transaction and study them before making any other transaction in PSX. You should also monitor the best-performing shares in the PSX for further investment in the PSX.

We discussed almost every step to understand how to invest in the Pakistan stock exchange in 2023, and we wish you the best of luck with your investment in the Pakistan stock exchange.