STOCK TYPES AND THEIR RELATIONSHIP TO PAKISTANI BROKERAGE HOUSES.
Introduction to Stocks and the Different Types of Stocks:
Although the stock exchange market has been in existence for a long time in a growing country like Pakistan, the daily increase in customers and dealers is assisting in its expansion. The stock market, which comprises several market indices, has been growing for years, broadening the public's investment opportunities. Investors may have a relationship with a broker and be active in selecting investments
based on their requirements. You put your money at risk on the Pakistan Stock Exchange, which trades numerous types of equities, once you've determined your investment goals and objectives. The following are the most widely traded equities in Pakistan and around the world:
Blue-chip stocks:
Because Pakistan's economy is still undergoing uncertainty and rapid expansion, these stocks are more essential and meet people's investing criteria. These investments can be found in older firms that have been in existence for a long time and don't have much development capital. Therefore, these financial services companies will produce a slower, more secure, and consistent return in the future. The beautiful thing about these businesses is that they have little to no development, making it incredibly safe to put your hard-earned wealth here. In addition to compounding the principal amount each year, they also compound the principal amount to increase the shareholder's interest income. As a result, the extra interest you'll receive will be beneficial in the long run.
Growth stocks:
Many brokerage companies on the Pakistan Stock Exchange specialize in trading growth stocks. These stocks are supplied by businesses that reinvest profits and have seen a significant increase in their turnover and share price over time. Because these stocks are in the grey sectors of the economy, investors are easily lured to increasing share prices, and they directly impact the country's economy. As a result, changes in trade interests have a significant negative impact on these equities, and the share prices and volume of shares exchanged over time can have a long-term influence.
Highly speculative stocks:
Some stockbrokers have access to the inside information that the market relies on. Insider knowledge
can have a significant impact on the value of speculative stocks. Brokers avoid dealing in these equities since they do not follow traditional trading procedures and lack a purpose for investing. The importance of these stocks can quickly change due to rumors and inside knowledge, and the selling and buying
of these stocks. Brokers advise their clients to avoid being manipulated by such stocks unless they have reliable information.
Equities in the range:
These stocks have a consistent upward trend toward profits. Investors frequently purchase them in the lower product range and sell them in the higher product range, resulting in an increased profit % after a particular term. Because the prices of these stocks do not fluctuate significantly, they give stable returns and allow investors to make a profit.
Factors to consider:
Before creating a brokerage account with a brokerage firm, an individual should consider the following factors. So, what exactly should we be looking for in a brokerage firm?
The first consideration is communication simplicity and suitability for the investor's preferences Communication and sound financial advice are two of the most important aspects of stock markets. As a result, the client-broker relationship must be prioritized.
The majority of brokerage firms now provide internet trading. As a result, investors can have direct access to their records and market data. The investor can use this feature to monitor current transactions and seek market trends and setbacks. This will enable an investor to choose where and when to make more investments and which stocks will deliver the best growth and returns. The availability of research data is also critical to users' market comprehension. As a result, before committing to a brokerage house for investment, an investor should search for these features.
To be a registered and licensed broker on the Pakistan Stock Exchange, a firm or individual must have a TREC (Trading Rights Entitlement Certificate) issued by the Securities and Exchange Commission of Pakistan, recognized by PSX. According to the Stock Exchange listing, the following are some of Pakistan's best TREC holding brokerage firms:
- AKD Securities Limited is number one.
- IGI Securities is number two.
- AZEE Securities is number three.
- Zafar Securities (Pvt) Limited is a private company based in Pakistan.
- Arif Habib Limited is a company founded by Arif Habib.
- As previously stated, all of the brokerage houses have branches throughout Pakistan.