why investors not investing in the stock market

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Why investors not investing in the Stock Markets

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CHAPTER NO. 6 REASEARCH ANALYSIS 6.1 Analysis and Interpretation of Data .. 48

CHAPTER NO. 5 CONCLUSION AND RECOMMENDATIONS.

7.1 Conclusion 657.2 Recommendations ..... 66

BIBLIOGRAPHY.............. 67

ANNEXURE

Institute of Business and Technology 3


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ACKNOWLEDGMENT

At the completion of my research project I would like to thank God Almighty for

giving me the power, energy and guidance to do this research study.

I would then like to thank my resource person, Mr. Dr. NOOR MEMONfor giving

me this opportunity to carry out this project. I would like to thank him for all his

help and guidance.

Last but not the least, I would like to thank my family and friends for being there

for me whenever I needed then for bearing with me all the way through.



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INSTITUTE OF BUSINESS AND

TECHNOLOGY

ABSTRACT SUBMITTED BY: Noman Jamil

DISCIPLINE: MBA(Banking & Finance)

TITLE OF PROJECT REPORT: Why investors not Investing in the

Stock Markets

MONTH OF SUBMISSION: November, 2010

NAME OF PROJECT SUPERVISOR: Dr. Noor Ahmed Memon

ABSTRACT

We are led to believe that the best place to invest our money is in the stock

market. Low barriers to entry, low barriers to exist, plenty of information, high

probability of success in the long run and a lot of success stories. We also hear

some of the horror stories of people who day traded tech stocks in the early

2000s, gamblers who lost it all on penny stocks. Most of the people in Pakistan

do not invest in stock markets cause of fear of loss and the economical condition

of country. political uncertainty is another factor which s un negligible. The

thinking involved before making a decision to invest in stocks includes how to

actually do it and in what stocks to invest. First someone has to decide whether

he is willing to take on some risk and place his money on a stock that he hopes

will increase in value. Due diligence by investigation of the company along with a

study of it's history are critical factors. No one should just take a chance and

invest in a company simply because it has been in business a long time. Thought

is also required regarding how much of a role his stock investments will play

http://www.ehow.com/business/http://www.ehow.com/business/


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within his entire investment portfolio. Also, if he is a first-time investor, he will

have to register with a brokerage firm before buying stocks or making trades.

Investing in the stock market has one overriding goal: to make money. A typical

reason why people will choose to invest in stocks rather than other avenues can

be because he likes a specific industry or company. . Excitement and thrill are

factors as well, with anticipation of hitting it big by owning a piece of a company

he likes and having the opportunity to flourish with it.

Stocks provide but one avenue of investing. There are corporate and

government bonds available, which are considered less risky than stocks but

typically offer smaller returns, that are commonly found in portfolios. Investing in

commodities such as gold or silver is yet another avenue, as is real estate, while

some choose to invest in themselves through self-employment. Many investors

have a diversified portfolio as a protection, so that if one form of investment takes

a downward turn, there is still opportunity that the other instruments will be doing

well and dampen the loss. Stocks are considered to be one of the most risky

investments but also offer a chance to reap large rewards as the continuation of

this opportunity remains prevalent.



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01. INTRODUCTION

1.1 Introduction:

Stock exchange is of the powerful financial institutes. By 1995, over 60

developing countries had established although these varied considerable in size

in terms of number of companies listed and market capitalization.

Stock market not only helps investors their money but also provides their

significant funds to different companies. Whenever a company needs funds for

investment in its operation/business, it either raises debts/loans or invites

equity/capital from the investors. When funds are raised through equity/capital,

investors in acknowledgement of the portion of their investment are made the

shareholder of the company and issued share certificates as a proof of their

ownership in the company. Stock ownership has provided the greatest

investment opportunity to the largest number of people over time. Now whenever

a certain shareholder of the company wishes to sell all or part of her/his holdings,

he or she can only do so through the stock market. Likewise, anyone willing to

buy the shares of the company can do in the stock market.

Other then stock market there are different financial institute, which provide fundto company like banks or corporate bonds. Similarly, investors are investing in

different financial institute/schemes like bonds, saving certificates, banks.



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1.2 Purpose of Research:

There is a lot of mystery in the minds of people, who are new to working with the

stock market. There is the fear and concern of possibly losing hard earned

money, coupled with the wonder and excitement of building large profits.

Even though, people do invest in different market/schemes. They find the specific

market/scheme according to their needs and put their earned money there. It is

an observation that some of people, who are potential investors or who are

investing in any form, are not trading in stock market. This research is specially

focused on finding factors that are stopping any investor to invest in stock

market.

It is important to know that one can start buying stock with just few rupees a

month. As one start with a small amount, a lot of experience is not required.

Person knowledge and experience will increase as the amount of money you

invest grows. Above all stock provide highest return on investment with greater

risk.

Frequent substantial political, economical and social changes make of an

adventurous nature. Due to the adventurous nature of these securities, returns

can sometimes be handsome, making them attractive to investors willing to

tolerate risk. However, the downside danger can be substantial.



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1.3 Researched Objectives:

Following are the objectives of this research project.

1. To find out the awareness of stock market among the people.

2. To identify why any investor does not invest in stock market.

3. The factor which are affecting investors decision.

4. To determine what investors want out of his money that he/she invested.

1.4 Research Methodology:

In any survey, the methodology employed is crucially important, as the local

people are reluctant to reveal any pertinent information to the surveyor. To

overcome this problem a unique method of investigation was required. The

required information had to be gathered in a way, which meets all the objective

requirements with a high degree of accuracy.

Measurement instrument that is used in research is questionnaire. A

questionnaire is a list of planned, written question related to a particular topic,

with space provided for indicating the response to each question, intended for

submission to a person for reply. Questionnaire contains 24 relevant questions.



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02. LITERATURE REVIEW

Local Literature:

2.1 Pakistan and Gulf Economist:

Equities offer an incredibly high yield at present. To support their argument say

that Board meetings of most of the companies are scheduled in December and a

large number of companies may declare very attractive dividend. They say that

last nearly 375 companies declared dividend amounting rupees 32 billion and

most of them announce similar result for the 2006, at least

Investment in mutual funds may be the best for individuals. Since mutual funds

have a diversified investment portfolio, selection of scrip is based on economic

fundamentals and managed; probability of substantial losses is relative low.

Analysts often suggest that investors must look towards equities market.

Cover story: Where to invest your money, 22nd October, 2006, page16

2.2 Investment opportunities in Pakistan:

A seminar organized by Harvest Group By Faraz Siddiqui

Pakistan is among the developing economies of world with emerging markets,

stock market is one of them. Emerging stock and forex markets in developing

countries have become an important and highly accepted investment tools. Due

to its significant Harvest Group has organized a seminar on Investment

Opportunities in Pakistan.

Presenting the introduction of Harvest Group, Mr.Ziaullah, Marketing Manager

Harvest Group said, Harvest Group is an international entity with specialized

services of Forex and securities trading. It was established in 1992 and in a very



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short of time it becomes a worldwide Forex and security brokerage house of

international standard. In Pakistan HG operates two partnerships Harvest Top

worth International (HTW) and Harvest Smartrend Securities (Pvt) Limited (HSS).

Bhatti further said, HTW is the Forex Brokerage Arm of Harvest Group which is

pioneer of Forex Brokerage in Pakistan with the largest setup. While HSS is a

stock brokerage house which offers a wide range of services for the investments

in the stock markets. He further said, HSS is the only stock brokerage house in

Pakistan Stock market information through Reuters Systems. Enlightening the

insights of exciting world of stocks, Humaira Jamil, Research Analyst at Harvest

Group Lahore, said, Pakistan has sample investment opportunities being an

emerging market. All the stocks markets in Pakistan are emerged markets. She

further said, stock business is highly regulated industry which is managed first by

stock exchange itself, then Central Depository System and finally Securities

Exchange Commission of Pakistan. From March 2000 onwards, KSE has been

facing huge losses but now market is slowly recovering and coming back on the

track. She further said, in depth analysis of the market behaviour reflects that

market has strength to sustain higher level with the years to come.

2.3 Where to Invest Your Money?

Attractive investment opportunities a must for boosting savings rate By shbbir h. Kazmi

Oct 30- Nov 05, 2000

Pakistan needs large scale investment for acceleration the economic growth rate.

The objective cannot be achieved without boosting investment in productive

activities. T quantum of investment is largely dependent on the savings rate that

is driven by the philosophy incentive for savings. The declining returns on

National Savings Schemes (NSS) and mark-up being paid by financial

institutions and high rate of inflation have become serious impediments for

boosting savings rate.



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Historically, people used to keep their savings with commercial banks either as

time deposits or in their savings accounts. Investments in NSS products,

currencies, gold, real estate and commodities were other available options.

However, with the recent declining trend in return on bank deposits and NSS

products, people are in desperate search for other alternatives. The quest is also

supported by the Supreme Court judgment regarding abolishing RIBA from the

economy. Even much earlier, than the day this judgment was announced, a large

number of people were in search if interest free financial products. There was a

pressure on financial institutions to come up with RIBA free products. Though the

initiative was taken as back as early eighties, the lack of commitment, uncertainty

and dearth of expertise did not allow the financial institutions in the country to

come up with financial products truly based on Islamic injunctions.

Investment in NSS products, despite yielding lower return, is still considered

most secure because of being backed by the government. The investors in these

products mainly comprise of widows, old people and those who are interested in

getting fixed and/or regular income. However, they feel a pinch now due to

reduction in rate of return.

Bank Deposits: Domestic and foreign commercial banks, put together, have an

elaborate network of branches throughout the country. Almost each bank has its

own niche market and has its own strength and weakness. Deposits with banks

are perceived secure. This perception has helped the banks in mobilizing low

cost funds and earn high yield by investing the funds in T-Bills/government

securities. In last couple of years the scenario has changed to a large extent.

With the growing competition among the banks in resource mobilization,

reduction in T-Bills yield, foreign currency deposits being expensive and low

demand for credit, the return on PLS account and time deposits are on a

constant decline and do not commensurate with the with the rate of inflation in

the country. However, as a result of the recovery campaign of November 1999

large scale restructuring of loans and change in the rules regarding provisions



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against doubtful loans, commercial banks are expected to pay better return on

deposits. To maintain deposits level almost every bank is trying to come up with

innovative financial products to suit the needs of various groups. Now financial

institutions offer various products which have the advantage of daily calculation

of mark-up to advance profit payment. This clearly indicates that these

institutions have realized the need of various income groups and have started

offering products to suit the needs of each group. Thanks to growing competition

foe resources mobilization that has also forced the banks to optimize operating

costs to enable themselves to offer competitive return. While the return on

deposits may be comparable, the inflow of deposits is dependent on a number of

other factors. These include: branch network, quality of service and other fringe

benefits. These factors often playa decisive role in selecting a bank or branch

when one has to make a selection.

After the freezing of foreign currency accounts in May 1998, the preference for

dollar deposits has come down considerably. Even the banks discourage

maintaining such accounts, at times, due to higher exchange risk cover. Some of

banking sector analysts says that it was not the rate of return on deposits but the

probability of gains due to persistent rupee depreciation that encouraged peopleto accumulate dollars. Yet another reason was preference of dollar deposits as

the most acceptable collateral by banks. The recent dollar buying spell was also

due to expectation of massive devaluation of rupee. The buying pressure led to

exchange rate volatility which further intensified the lust for accumulation of

dollars. However the volatility has reduced to a large extent and the difference

between kerb and official rates is expected to come down further once the inflow

from multilateral resumes.

Capital Market: As the returns are going down, it has become imperative that

people should not look towards bank deposits/NSS only. Mutual funds, equities

and debt instruments, currencies, real estate and gold should also be considered

for investment to maintain a diversified investment portfolio to earn higher return.



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Each option offers opportunities and has pitfalls. While services of investment

consultants may be available in the country, the ultimate responsibility of making

prudent decision lies with the investor. According to ARIF HABIB, Chairman,

Karachi Stock Exchange, with the increasing number of listed companies and

large capital base corporations the daily trading volume has increased manifold

over the years. It is mainly due to better market information, brokerage house

opening more and more branch offices and printing exhaustive reports about the

performance of listed companies. It is also because of improved infrastructure

and market efficiency. ARIF said that despite a negative perception about

equities market, performance of various sectors is worth mentioning. Net assets

values of a large number of companies have improved over the years. Still, many

scripts are selling at a discount and prices are very attractive. As the signs of

economic revival have started appearing there are prospects for better dividend

yield.

Over the last couple of years number of companies declaring cash dividend is on

an increase. To make the equities market more efficient and attractive the

Securities and Exchange Commission of Pakistan (SECP) is trying hard to play

its due role. This has improved corporate governance, encouraged greaterdisclosure and also helped in restoring confidence of investors. However,

according to ARIF, a lot has to be done to improve market efficiency. Creation of

Central Depository, KATS, display of real time information and monitoring of

brokers behavior have further consolidated the confidence of investors which will

lead to large investment in equities and debt instruments.

Debt instruments, mainly Term Finance Certificates (TFGS), have been floated.

They offer the advantage of fixed income. Individual investors are still reluctant to

invest TFGS due to support from secondary market. Mostly institutional investors

invest in these certificates. Globally the market is large in size as compared to

equities market, but it is the other way round in Pakistan.



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One of the reasons for lack of issuers is compulsory rating by an independent

credit rating agency. However some analysts strongly believe that disclosure is

the main issue. In Pakistan many listed companies prefer to publish the bare

minimum information in annual reports and would never like to make the

maximum disclosure. Such companies prefer to borrow from banks rather than

mobilizing resources from capital market. Another issue is credible track record

for credit rating. While there is no obligation for paying dividend to shareholders,

no issuer can avoid paying agreed return to TFC holders. According to DR.

AMJAD, Head of Assets Management, National Investment Trust, the analysis of

performance of bank deposits, gold, dollar, Defence Savings Certificates and

stock market for the last 25 years indicates the highest growth in investment in

stocks. However, he was skeptical that an individual who did not have thorough

knowledge of stock market might loose his money. In his opinion interest in

investment in stock is driven by the attitude towards risk, age of a person and

time horizon. Still the key factor affecting the return on investment is the

diversification of the portfolio. Dilating his point, he said that investment in open-

end mutual funds may be the best for individuals. The sale and repurchase price,

based on net assets value, is calculated on daily basis. This provides an

opportunity to investors to make capital gains besides earning regular dividendincome. Since an open-end fund is diversified, selection of Scripps is strictly on

the basis of economic fundamentals and it is also managed by professionals, the

probability of substantial losses is minimized.

Dr. Amjad has a point of caution for investors. In his opinion, the time horizon for

investors in equities market should be about three years. This period allows an

investor to earn a reasonable dividend as well as make capital gains. An analysis

of local equities market may indicate some spikes during three to six months

period. However, over a longer period the adverse impact of such surges is

minimized. He also suggested that old persons, who need regular and

guaranteed income, should not invest more than 30 percent to their total portfolio

in equities market and should invest preferable in fixed income securities. At



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present there are two open-end mutual funds in Pakistan, i.e. National

Investment Trust (NIT) and Unit Trust of Pakistan (UTP). As against this there

are 39 closed-end listed mutual funds. Out of these the largest number pertains

to the funds managed by the investment Corporation of Pakistan (ICP) and

remaining are managed by the private sector. An analysis of mutual funds

managed by ICP shows that at present all these funds are quoted/traded when

with net asset value. Another observation is that quoted price per share, in case

of a number of funds, is even below par value. This indicates a lack to interest of

investors in closed-end mutual funds.

According to HABIB-UR-REHMAN, Executive, ABAMCO, Investment in an

open-end fund is most suitable for individuals. If one looks at the number of

mutual funds operating globally it is amazing. For example, the first mutual fund,

Unit Trust of India, was established in India in 1964. The size of total mutual

funds in India at estimated over five trillion Indian rupees. Apparently, it looks

that individuals know very little about the advantages of investing in mutual funds

in Pakistan that was also confirmed by REHMAN. The largest investments in

mutual funds in Pakistan, at present, pertain to institutional investors. Whereas in

India mutual funds have grown in number and size mainly due to the Skeeninterest of individual investors who have realized the advantage on investing in

mutual funds. If one looks at the performance of mutual funds in Pakistan, it

generally reflects the performance of listed companies. The reason being that

these funds have invested mainly in equities. However, BSJS Balanced Funds

stands distinguished. As the name reflects, BSJS has made investment in a

diversified and balanced portfolio. It has made investment in equities, debt

instruments and money market, etc. Since its established it has been paying

regular dividend to its shareholders. As compared to this all hose funds that have

total investment in equities have been experiencing performance full of surges.

Other Options: A smaller segment of investors, which has large amount at its

disposal and also have strong holding power, have been investing in real estate,



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2.4 Ten Commandments:

Before you invest in any stock. Continuously review and disinvest if any

commandment gets violated.

Ten Commandments

1. Sector allocation: You shall allocate sector weightages that are different

from sensex lest you should not achieve the objective of limiting risk

requires you not to go gung-ho on some sectors as their fortunes change

without taking your permission.

2. Liquid and focused portfolio: You shall limit your portfolio to 10 and 10

stocks. All successful investors agree that an unwieldy portfolio is a sure

recipe foe below average returns. As all Homo sapiens can err, you shall

invest in stocks where exit is easy i.e. stocks with a minimum market

capitalization (we set the limit at Rupees 10mn) and have good liquidity

(average BSE turnover should exceed Rupees 10mn per day in the last 3

months).

3. Avoid tips: You shall not envy your friends getting rich if his/her sticks

appear to be rising faster than yours. You should not forget that can falleven faster. You shall fall in the trap of getting excited by every tip even if

it looks sexy by its performance in the last few days. None of your

investment decisions should violate any of the 10 commandments.

4. Leader only: You shall only buy companies that are leading in their

respective industries i.e. they should be in top 5 in the respective Indian

industry. An exception can be made only if there is a big turnaround or

restructuring story.

5. Management quality: You shall not buy companies run by managements that

have a track record of incessant equity dilution, talking up unrelated

projects, misleading investors by miscommunication or no proven track

record. The only exception you can make if you have a reliable report that

the management is changing.



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.

2.6 Einsteins Rule of 72

ByDr. J. Michael Hall (Doctors in Finance, Investment & Estate Planning), Mesa

(Phoenix, Scottsdale, Tempe Area) Arizona.

Einsteins RULE of 72 gives us an easy figure how long it takes to double our

money! Simply divide the rate of growth your money is earning into 72.

Example:

If you have $ 10,000 in a savings account at a bank, earning you 2.5%, Divide

2.5% into 72=58.8 years money (This shows why Einstein said, If people really

understood the Rule of 72 they would never put their money in Banks!) If you

have $ 10,000 invested in an investment that return 18% Divided 18% into 72=4

years to double your money! Knowing this, why would you put money in a bank!

Its probably the place to put it. They seldom pay over 3-4%, even in C.D.s.

There are MUCH better places to put your money, as youll soon see.

2.7 Stocks or bonds?

1. Are bonds subject to the same market fluctuation as sticks?Stocks are subject

to two kinds of market fluctuations: one, fluctuation in earnings, and two,

fluctuation in interest rates, i.e. fluctuation in the value of money. Bond,

on the other hand (at least, T-bonds), are subject only to fluctuations in

interest rates. However, there are empirical relationships between the

level of business activity and interest rates, which vary other the business

cycle. Hence, T-bonds will also be indirectly affected by fluctuation in

corporate earnings, through their effect on interest rates.



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Consider placing some money in employers stock, but dont invest more than 10

percent of your equity holdings in your companys stock if your company hits

hard times, you can get hit with double whammy. The stock price falls, you lose

your job

If your company offers you stock options as an incentive with little or no cost to

you, take them But invest the rest of your portfolio in other assets so that it your

company went bankrupt, youd still be OK

The best way to minimize your risk: Invest in a broadly diversified portfolio Diversify

across asset classes:

Stocks

Bonds

Real estate

Diversify within asset classes

Large company stock

Small company stocks

Foreign stocks

Dollars cost average Bond laddering

Example of how diversifications reduce your risk without reducing your return

Studies show that typical returns for individual stock ranges between -40 to +60

percent per year So dont be impresses if a broker tells you about a stock that

she picked went up 50 percent It happens all the time Returns for the market as

a whole range between -7 to +27 percent per year By investing in a broad-based

mutual fund, you enjoy the same average gain, over time, as if you invested in a

few individual stocks, but with less volatility



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03. FINANCIAL SYSTEM

3.1 The Financial System

Such systems are very important in the economy for they play a critical role in

igniting industrialization by facilitating the mobilization of capital for immense

works. Well-functioning financial institutions spur technological innovation by

identifying and funding those entrepreneurs with the best chances of successfully

implementing innovative products and production processes. It has been said

that where enterprise leads finance follows. According to this view, economic

development creates demands for particular types of financial arrangements, and

the financial system responds automatically to these demands. There is a belief

that the development of financial markets and institutions is a critical and

inextricable part of the growth process. There is evidence that the level of

financial development is a good predictor of future rates of economic growth,

capital accumulation, and technological change. Financial market development

or the lack thereofcrucially affects the speed and pattern of economic

development.



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3.2The Functions of the Financial System

The costs of acquiring information and making transactions create incentives for

the emergence of financial markets and institutions. Put differently, state-

contingent claim framework with no information or transaction costs, there is no

need for a financial system that expends resources researching projects,

scrutinizing managers, or designing arrangements to ease risk management and

facilitate transactions. Different types and combinations of information and

transaction costs motivate distinct financial contracts, markets, and institutions.

In arising to ameliorate transaction and information costs, financial systems serve

one primary function: they facilitate the allocation of resources, across space and

time, in an uncertain environment.

The primary functions of a financial system can be divided into five basic

functions:

facilitate the trading, hedging, diversifying, and pooling of

risk, allocate resources,

monitor managers and exert corporate control,

mobilize savings, and

Facilitate the exchange of goods and services.



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Fig 3.1 - Theoretical Approach to Finance and Growth


Market Frictions

- Information costs- Transaction costs

Financial markets andIntermediaries

Financial Functions- Mobilize savings

- Allocate Resources- Extent corporate control

- Facilitate risk mgmt- Ease trading of goods,

services ,contracts

Channels to growth

- Capital accumulation- Tech. innovation

Growth


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The importance of financial markets is also apparent when considering the

development of a non-market economy. This economy has no mechanism for

determining the value of goods and services. These values are determined by

central government bureaucracies. The result of foregoing markets that provide

information on the supply-and-demand interaction for goods and services is the

mis-pricing of most goods and services. This leads to waste. Many goods are

produced even thought here is no market for t hem. Other goods are produced

using very costly materials, when less expensive substitutes could be used. This

also leads to the well-known shortages. The price is low, but goods are not

available. Creating a market economy in goods and financial claims is a solution

to many of these problems.

Thus to summarize it can be said that the financial markets are important for a

few of the following reasons:

To provide information on past and present prices and trading

volume

To reduce search costs by bringing buyers and sellers together

To provide for standardization of contracts

To reduce (transfer) credit risks for buyers and sellers to reduce

information asymmetry.



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Some of the reasons responsible for the abnormal behavior of the equity markets

include the following:

1. Delay in the privatization of government owned companies

2. Withdrawal of funds by financiers

3. Excessive buy positions by several brokers in the future market who were

not able to get an exit opportunity due to the continuous decline in the

market

4. Sellers in the March future contract were carrying hedged position from

ready market

5. Seller decided not to square up their positions in the March futures

contract

6. Downward circuit breakers blocked the opportunity of exit from the market.

Islamabad Stock Exchange: The Islamabad Stock Exchange (ISE) was incorporated

as a guarantee limited Company on 25th October, 1989 in Islamabad Capital

territory of Pakistan with the main object of setting up of a trading and settlement

infrastructure, information system, skilled resources, accessibility and a fair and

orderly market place that ranks with the best in the world. The purpose forestablishment of the stock exchange in Islamabad was to cater to the needs of

less developed areas of the northern part of Pakistan. The ISE has set the

highest standards of operational efficiency and is committed to support a climate

of confidence and optimism that encourages and promotes trading activity.

It also provides for reasonable conducive environment to channalize the small

investments of the residents of less developed areas. The ISE offers an easy

access to both domestic as well as foreign investors and actively encourages the

listing of eligible and profitable companies, both large and small to make it an

exciting and diverse Exchange. The Exchange is playing a pivotal role for

economic growth of the area thereby contributing towards the overall economic

prosperity and welfare of the country.



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At present there are 104 members out of which 39 are corporate bodies including

commercial and investment banks, DFIs and brokerage houses. The other 65

Members are individual persons who are well educated, enterprising and

progressive minded. The affairs of the Exchange are governed by the Board of

Directors. The Board of Directors consists of ten directors, of which five are

elected member directors and four are non-member directors nominated by the

SECP while the managing director by virtue of his office is the tenth director of

the Board. In order to protect the interest of the investing public, an Investors

Protection fund has been established by the Exchange.

Since the inception of automated trading system (ISECTS), the trade volume has

been multiplying day by day and the average daily turnover has now crossed the

figure of 10 million shares. The automated system which was indigenously

developed, replaced the outcry system in 1997. Now all the listed securities are

traded through the ISECTS. The system of physical handling of shares and

securities has been phased out and majority of the scripts are settled through

Central Depository Company of Pakistan Limited.

In comparison with major financial markets around the World, the functioning of

capital market in Pakistan is still very much in its infancy and lacks advanced

technology. In this context efforts are being made to bring ISE in line with the

International system and methodology.

The turnover of shares on the Islamabad Stock Exchange (ISE) was 2.8 billion

shares during July-March 2004-05 as compared to 1.5 billion during the same

period last year. The ISE Network index has increased from 11894 points in June

2004 to 12894 points in March 2005, recording a growth of 8.4 percent. Eight

new companies were listed and Rs 18.8 billion was mobilized on the ISE during

the first nine months of the current fiscal year. The ISE started functioning in

August 1992 and within 14 years; it has developed into a vibrant, efficient and



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stable market. Today, the ISE is one of the premier stock exchanges of the

country known for the highest standard of transparency in its operations,

excellent risk management, dynamic market technology and lowest overall costs

of listing.

Profile of Islamabad Stock Exchange

-

Lahore Stock Exchange: Lahore Stock Exchange (Guarantee) Limited came

into existence in October 1970, under the Securities and Exchange Ordinance,

1969, of the Government of Pakistan, in response to the needs of the Provincial

metropolis of the Punjab. Only 83 members had its memberships and it was

housed in a rented building in the crowded area of Bank Square in exotic city of

Lahore. The number of members has increased from 83 to 150 over a period of

25 years. Inadequacy of space, crowded area and severe limitations of

communications cramped its growth. Only a few of all the members were active,

and they too had to work through Karachi Stock Exchange, or be limited to do

business in Bonus, Vouchers and Bonds.

It took the management all of two decades of uncertainties, apprehensions andplanning to construct a suitable building for itself and venture out to its present

location at 19-Khayaban-e-Aiwan-e-Iqbal, Lahore. Lahore Stock Exchange has

taken shape of a significant institution of Pakistan. It owes a debt of gratitude to

its past presidents and members of the Board who had contributed their time and

energy to realize the dreams of the LSE members. The turnover of shares on the



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________________________________________________________________________

Lahore Stock Exchange (LSE) during July-March 2004-05 was 14.0 billion

compared to 34.5 billion shares in the same period last year. Total paid up capital

with the LSE increased from Rs 361.5 billion in June 2004 to Rs 387.6 billion in

March 2005.

The LSE index, which was 2828 points in June 2004, increased to 4011 points in

March 2005. The market capitalization of the LSE has increased from Rs 1460

billion in June 2004 to Rs 2088 billion in March 2005. Seven new companies

were listed with the LSE during July-March 2004-05, as compared to nine in the

same period last year. The amount of funds mobilized at the LSE by way of

subscription was Rs 37.2 billion in the first nine months of the outgoing fiscal

year.

Profile of Lahore Stock Exchange



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Karachi Stock Exchange: Karachi Stock Exchange is the biggest and most

liquid exchange and has been declared as the Best Performing Stock Market of

the World for the year 2002. As on June 30, 2010; 645 companies were listed

with the market capitalization of Rs. 2,068.19 billion (US $ 34.70) having listed

capital of Rs. 438.49 billion (US $ 7.36 billion). KSE has been well into the 4th

year of being one of the Best Performing Markets of the world as declared by the

international magazine Business Week. Similarly the US newspaper, USA

Today, termed Karachi Stock Exchange as one of the best performing bourses in

the world.



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Five Year Performance of KSE:

In million except companies, index and bonds data

5 YEARS PROGRESS 2006-2010

Upto

30-12-2006

Upto29-12-2007

Upto31-12-2008

Upto31-12-2009

Upto03-12-2010

Total No. of Listed Companies 652 654 653 651 645

Total Listed Capital - Rs. 519,270.17 671,255.82 750,477.55 814,478.74 914,608.13

Total Market Capitalisation - Rs.2,771,113.9

44,329,909.7

91,858,698.9

02,705,879.8

33,112,350.0

6

KSE-100TM Index 10040.50 14075.83 5865.01 9386.92 11406.66

KSE-30TM Index 12521.54 16717.10 5485.33 9849.92 10993.62

KSE All Share Index 6770.06 9956.76 4400.76 6665.55 7935.97

New Companies Listed during the

year 9 14 10 4 6

Listed Capital of New Companies -Rs.

14,789.76 57,239.92 15,312.12 8,755.73 33,438.45

New Debt Instruments Listedduring the year

3 3 7 1 4

Listed Capital of New DebtInstruments - Rs.

3,400.00 6,500.00 26,500.00 3,000.00 5,650.18

Average Daily Turnover - Shares inmillion

260.69 268.23 146.55 179.88 132.43

Average value of daily turnover -Rs.

31,610.71 25,262.97 14,228.35 7,450.75 4,340.64

Average Daily Turnover (FutureTM)YTD

82.68 61.69 30.76 1.03 4.56

Average Value of Daily Turnover -YTD

13,587.63 9,077.61 5,229.97 89.66 385.75

Foreign Investment in Securities Market

Inflow - Rs - - - - -

Outflow - Rs - - - - -

Net Inflow/(Outflow) - Rs - - - - -

Today KSE has emerged as the key institution of the capital formation in

Pakistan with:-

Listed companies 659, securities listed on the

exchange 700: ordinary share 659, Preference

shares 15 and debt securities (TFC's) 26.



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Listed capital Rs.438,489.99 million (US$ 7,357.21

million).

Market capitalization Rs.2,068,187.15 million (US$

34,701.13 million)

Membership strength at 200.

Corporate Members are 112 out of which 9 are

public listed companies

Active Members are 155.

Fully automated trading system with T+3

settlement cycle.

Deliveries through central depository company

National Clearing and Settlement System in place.

KSE began with a 50 shares index. As the market grew a representative index

was needed. On November 1, 1991 the KSE-100 was introduced and remains to

this date the most generally accepted measure of the Exchange. The KSE-100 is

a capital weighted index and consists of 100 companies representing about 88

percent of market capitalization of the Exchange.

The market performance during the period June 1998 to April 2005 is given

under.

Performance of KSE



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The KSE is primarily influenced by some big blue chip companies including;OGDC, PTCL, Pakistan State Oil etc. During the first three quarters of the current

fiscal year, the combined turnover of shares of ten big companies (OGDC, PTCL,

A Pakistan PTA Ltd., Sui Southern Gas, FF Bin Qasim, D.G. Khan cement,

Fauji Fertilizer Bin Qasim, Fauji Cement and National Bank, Pakistan State Oil

and TRG Pakistan Ltd.) was 12.59 billion, which constituted 17.6 percent of the

total turnover of the KSE. These ten companies earned a profit after taxation of

Rs 65.22 billion in the current fiscal year up to March 2005. Out of Rs 65.22

billion after taxation profit, the share of PTCL and OGDC was Rs 51.58 billion

representing 79.1 percent of the ten big companies. In the first nine months of

2004-05, PTCLs after taxation profit was (Rs 29.2 billion). The price-earning ratio

of the ten big companies ranged from 50.5 in the case of TRG Pakistan Ltd. to

21.4 in respect of OGDC. This indicates that the business environment in the

current fiscal year has improved appreciably.



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Profile of Karachi Stock Exchange

4.2 Sector Wise Investment :

During the first nine months of the outgoing fiscal year, the KSE 100-share index

and aggregate market capitalization of 12 different sectors have increased by

47.2 percent and 55.8 percent respectively, as against their increase of 50.1

percent and 78.3 percent in the same period last year. Total turnover of shares

on the KSE was 71.7 billion in the first nine months of 2004-05 as compared to

65.2 billion in the same period last year. Funds mobilized by the KSE during this

period amounted to Rs 34.1 billion as compared to Rs 61.7 billion in the same

period last year.

All but two of the 12 major trading groups on the KSE (cotton and other textiles,

pharmaceuticals & chemicals, auto & allied, cables and electric goods, paper and

board, cement, fuel and energy, transport and communication, banks and other

financial institutions, and miscellaneous) witnessed growth in their share indices,

ranging from 0.5 percent (banks and other financial institution) to 63.7 percent

(fuel and energy). Two sectors namely engineering and sugar & allied

encountered slight declines in their share indices. During the calendar year 2009,

total profit before taxation of the 12 trading groups amounted to Rs 229.5 billion

as compared to their before taxation profit of Rs 136.8 billion in 2003. The



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performance of leading trading groups and companies for the first nine months of

the outgoing fiscal year is discussed below

Sectoral Performance of KSE:

SECTOR

CODESECTOR NAME TURNOVER

0530 Oil and Gas 8,140,964

1350 Chemicals 19,714,611

1730 Forestry and Paper 48,834

1750 Industrial metals and Mining 252,550

2350 Construction and Materials 3,333,756

2720 General Industrials 392,567

2730 Electronic and Electrical Equipment 5,619

2750 Industrial Engineering 153,674

2770 Industrial Transportation 5,859

2790 Support Services 731,409

3350 Automobile and Parts 162,848

3530 Beverages 4,902

3570 Food Producers 273,799

36 BONDS 0

3720 Household Goods 239,1763740 Leisure Goods 50

3760 Personal Goods 13,614,543

3780 Tobacco 375,213

4530 Health Care Equipment and Services 49

4570 Pharma and Bio Tech 43,336

5550 Media 1,552

5750 Travel and Leisure 145,825

6530 Fixed Line Telecommunication 1,325,195

7530 Electricity 3,762,911

7570 Gas Water and Multiutilities 899,7138350 Banks 11,872,946

8530 Non Life Insurance 1,075,756

8570 Life Insurance 159,110

8630 Real Estate Investment and Services 994,913

8770 Financial Services 15,859,817

8980 Equity Investment Instruments 2,387,467



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Cement: At the end of 2009, there were 21 cement companies listed with the

KSE. The cement industry was one of the best performing sectors in the stock

market. Its market capitalization increased to Rs 75.5 billion on March 31, 2010

from Rs 65.1 billion in June 2009, recording a growth of Rs 16.0 percent.

Fuel & Energy: A total of 26 companies were listed with the KSE. It is the most

dominant group in the stock market. Its share index grew by 63.7 percent during

the first nine months of the current fiscal year, which was the highest among the

12 trading sectors. Its market capitalization increased by a huge Rs 423.3 billion

to Rs 909.0 billion in March 2010 from Rs 485.8 billion in June 2004. Its market

capitalization constituted 43.0 percent of the aggregate market capitalization in

March 2010. In the corresponding date of the last year market capitalization of

this group was 37.2 percent. A swelling fuel and energy sector continued to be

one of the major market players in the current year along with transport and

communication, banking and finance, and cement. The energy sector has been

identified as an engine of growth along with 3 other sectors, (agriculture, small

and medium enterprises and information technology) by the government.

Companies like OGDC, PSO, SNGC, SSGC, Hub Power, and Pakistan Oil Fields

etc. led the current years upsurge in the s tock market. These companies werethe main drivers of the stock market.

Transport & Communication:At the end of 2004, there were 14 companies of this

group listed with the KSE. Its share index and market capitalization increased by

54.9 percent and 60.0 percent respectively during July-March 2009-10 as

compared to their rises of 36.3 percent and 49.3 percent respectively in the same

period last year. Its market capitalization at Rs 309.7 billion constituted 14.6

percent of the aggregate market capitalization (AMC) in March 2010 making it a

major player on the KSE. The combined market capitalization of fuel and energy,

and transport & communication was Rs 1218.7 billion on March 31, 2010, which

constituted 57.6 percent of the AMC (Rs 2114.8 billion) as compared to their

share of 51.0 percent on the corresponding date of last year.



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Banks & Other Financial Institutions: In December 2009, a total of 159 companies

were listed with the KSE. There are 4 sub groups in this group: banks &

investment companies, modarabas, leasing companies, and insurance. During

the current fiscal year, the share index of this group has marginally increased by

0.5 percent. Its market capitalization however increased by 59.8 percent or from

Rs 187.1 billion in June 2009 to Rs 299.0 billion in March 2010.

Miscellaneous: The miscellaneous group includes five sub-groups: jute, food &

allied, glass & ceramics, vanaspati & allied, and others. In December 2003, a

total of 92 companies were listed with the KSE, which came down to 89

companies at the end December 2004. Its share index and market capitalization

posted growth of 9.6 percent and 10.5 percent respectively in the first nine

months of the current fiscal year, as compared to their growth of 31.6 percent

and 38.5 percent respectively, in the same period last year.

4.3 Present and Future Prospects

Foreign investors are pushing funds back into Pakistan stocks, setting the market

up for its second-best year for inflows in a decade, drawn by cheap valuations

and some economic and security improvements.

Such investments may be paying off as well because the main Karachi stock

index .KSE is one of the few markets in Asia showing a rise since the beginning

of the year.

While the benchmark MSCI Asia ex-Japan index is down 11 percent this year,

the KSE is up 3 percent.

http://uk.reuters.com/business/markets/index?symbol=pk!kserhttp://uk.reuters.com/business/markets/index?symbol=pk!kser


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"Pakistan remains one of the cheaper markets in Asia and emerging markets

with an improving domestic situation and a stabilising economy," said Mark

Mobius, executive chairman at Templeton Asset Management Ltd.

Net foreign portfolio investment into the stock market reached more than $530

million (362 million pounds) in the first 11 months of 2009/10, compared with a

year-earlier outflow of $408 million.

If that holds to the end of the July-June fiscal year, it would mark the biggest net

foreign investment in more than 10 years, apart from 2007.

The government has pulled back from the brink of a debt default thanks to

International Monetary Fund emergency funding and is seeing some success in

military operations against Taliban militants behind bomb attacks across the

country.

A government led by the party of assassinated former prime minister Benazir

Bhutto has proven more resilient than critics predicted and recently introduced

constitutional reforms to bolster parliamentary rule, and stability.

The powerful military, which has ruled for more than half of Pakistan's history, is

seen as largely satisfied with the civilian government and loathe to step back in

to politics while it hands are full battling militancy.

The economy is also pulling out of the global downturn and this year the

government expects growth above 4 percent compared with record low growth

last year of 1.2 percent.

The Karachi stock market .KSE has more than doubled from lows hit last year

during the worst of the global crisis, although many stock markets have seen

similar gains.

To be sure, Pakistan remains one of Asia's riskiest investment destinations,

Reuters surveys show.

http://uk.reuters.com/business/markets/index?symbol=pk!kserhttp://uk.reuters.com/business/markets/index?symbol=pk!kser


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That's why most foreign money goes into energy stocks or fertiliser company

Engro Chemicals (EGCH.KA). Apart from having cheaper valuations compared

with many regional peers, they offer the liquidity foreign investors need should

they decide to sell.

Al Qaeda-linked Taliban militants remain a serious threat despite the military's

successes, and chronic power cuts and rising prices are eroding the

government's support. There remains criticism of a lack of policy stability.

In addition, the inflow figures have been flattered by the lifting of a KSE trading

floor, which had stopped investors selling below 9,144 points between August

and December 2008.

Brokerage Invest and Finance Securities Ltd says the lowest one-year forward

price-to-earnings ratio in Asia of just 6.25 is also drawing funds. That's less than

half China's level, it says.

"Of course investors are interested in seeing fewer terrorist attacks, but many

investors have become inured to such situations knowing that they are isolated

incidents," Mobius said in late May. Foreign direct investors seem less confident.

Actual FDI has almost halved to $1.77 billion in the first 10 months of 2009/10

compared with $3.20 billion a year earlier. Such FDI would be the lowest level

since year ending June 30, 2004 when it was $949 million.

Asad Iqbal, chief investment officer at Faysal Asset Management Ltd, said that

apart from obvious security concerns, FDI is a victim of ever-changing

government policies.

He cited export tax on yarn. The government raised it to 15 percent last month

only to reverse the decision in the budget Saturday.

http://uk.reuters.com/business/quotes/overview?symbol=EGCH.KAhttp://uk.reuters.com/business/quotes/overview?symbol=EGCH.KA


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________________________________________________________________________

But it is an odd reaction from a community which has long pointed fingers at

wealthy landowners for remaining exempt from paying an income tax. Farm

incomes in Pakistan for long have been exempt from paying Karachi stock

exchange (KSE), to help stem a slide in share prices.

It is an unusual move for the tax authorities to become involved in affairs of the

stock market. But there is a good reason. In the past two days alone, the KSE

lost about 2 per cent of its net value as nervous investors rushed to sell their

shares in reaction to this weeks withdrawal of a tax exemption on stock market

profits.

Knowledgeable insiders an income tax, prompting criticism from urbanites. And

yet, Pakistans very future depends on its ability to make its wealthy elite pay

their dues. As the country battles Taliban and Al-Qaeda militants across its

frontier lands along the Afghan border, its internal economy has eroded badly.

Basic services such as education and health remain sorely neglected and

increasingly out of reach for the poor.

Pakistans tax to GDP ratio at about 9 per cent is the lowest among its south

Asian peers. Equally appalling is the figure that just over 1 per cent of thepopulation pays an income tax.

Its clear that the ability of this nuclear-armed south Asian country to progress

depends on clamping down on those who evade taxes. If the tax authorities

decide on Saturday to back off from taxing stock market gains, it wont just mean

the unraveling of a long overdue effort at reform. It will become even harder to

tax other parts of the economy including the rich rural landowners.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Politics/11-Jun-2010/Senate-body-links-VAT-to-farm-tax-impositionhttp://www.dailytimes.com.pk/default.asp?page=20106%5C11%5Cstory_11-6-2010_pg5_14http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Politics/11-Jun-2010/Senate-body-links-VAT-to-farm-tax-impositionhttp://www.dailytimes.com.pk/default.asp?page=20106%5C11%5Cstory_11-6-2010_pg5_14


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________________________________________________________________________

06. REASEARCH ANALYSIS

6.1 Questionnaire Analysis:

1. Do you invest in any of financial instrument/scheme other then stock?

Number of

Respondent

Percentage Male Female

Yes 9 33.3% 6 3No 17 63.0% 11 6Dont Know 1 3.7% 0 1

Didnt Reply 0 0.0% 0 0Total 27

2. Are you planning to invest within few years?

Number of

Respondent


Yes 10 37.0% 7 3No 7 25.9% 5 2Dont Know 2 7.4% 1 1Didnt Reply 8 29.6% 4 4Total 27

3. Which type of investment (Stocks, bond, saving certificate etc) you would

prefer the most?

Number of Percentage Male Female



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________________________________________________________________________

Respondent

Stocks 6 22.2% 4 2Bonds 4 14.8% 2 2Saving

Certificate

6 22.2% 3 3

Others 11 40.7% 8 3Total 27

0

2

4

6

8

10

12

Stocks

Bon

ds

SavingC

ertificat

Others

Series1

4. Attitude towards investment risk, select one .

Number of

Respondent


Conservative 2 7.4% 1 1Cautious 7 25.9% 6 1Balanced 10 37% 4 6Adventurous 1 3.7% 0 1



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________________________________________________________________________

Expected Rate of Return

0

2

4

6

8

10

12

14

Lowest Low Average High Highest Didnt

reply

Series1

6. Do you know where the Karachi Stock Exchange building is situated?

Number of

Respondent


Yes 21 77.8% 15 6No 4 14.8% 1 3May be 1 3.7% 0 1Didnt reply 1 3.7% 1 0Total 27



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________________________________________________________________________

7. Do you know how Karachi Stock Exchange works?

Number of

Respondent


Yes 8 29.6% 6 2No 11 40.7% 6 5Partially 8 29.6% 5 3Didnt reply 0 0.0% 0 0Total 27

0

2

4

6

8

10

12

Yes No P artially Didnt reply

8. Do any of your family members or friend trades in Stocks?

Number of

Respondent


Yes 12 44.4% 7 5No 14 51.9% 9 5Didnt reply 1 3.7% 1 0Total 27



55/74


________________________________________________________________________



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________________________________________________________________________

9. Does Newspaper listing ( Stock related coverage given in newspaper ) help

you in understanding Stock Function?

Number of

Respondent


Yes 6 22.2% 3 3No 10 37.0% 6 4Slightly 9 33.3% 6 3Didnt reply 2 7.4% 2 0Total 27

Is Newspaper listing helpful?

10. Do you think there is enough material ( books/Magazines) available to assist

you in getting information about stock market ?


0

2

4

6

8

10

12

Yes No Slightly Didnt

reply

Series1


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________________________________________________________________________

A w a re n e s s L e

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Y es N o P art ia lly D idn t

reply

b rokerage sy s t

S to ck S p e cu l a t

Div idend syste

Bear /Bu l l sys te



61/74


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________________________________________________________________________

M o n ey R eq u ire to s ta r t trad e in S to

0

1

2

3

4

5

6

78

9

B e l ow

10,000

10 ,001-

15 ,000

15 ,001-

20 ,000

20 ,000-

25,000

Above

25000

Didn t reply



63/74


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________________________________________________________________________

44.40%

51.90%

37.00%

25.90%

63.00%

48.10%

25.90%

33.30%

25.90%

18.50%

0.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Lackof

Knowledge

about

VeryRisky

Notallowed

inIslam

Stock

speculation

Economyof

Country

Law

&

Order

Fraudfrom

brokerside

Fraudfrom

company

Environment

ofStock

exchange

Other

Factors

Didntreply

Series1

19. Do educational institutes provide adequate knowledge about stock markets?

Number of

Respondent


Yes 5 18.5% 3 2No 8 29.6% 5 3Dont Know 13 48.1% 8 5Didnt Reply 1 3.7% 1 0Total 27



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________________________________________________________________________Personal Information:

20. Age

Number of

Respondent


Less than 18 0 0.0% 0 018-25 years 20 74.1% 13 726-35 years 4 14.8% 2 2More than 35 3 11.1% 2 1Didnt Reply 0 0.0% 0 0Total 27

21. Gender

Number of

Respondent

Percentage

Male 17 63.0%Female 10 37.0%Total 27

22. What is your annual income ?

Number of Respondent Percentage Male Female



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________________________________________________________________________

Below 10,000 4 14.8% 3 110,001-15,000 4 14.8% 2 215,001-20,000 4 14.8% 3 120,000-25,000 3 11.1% 2 1Above 25000 12 44.4% 7 5

Didnt reply 0 0.0% 0 0Total 27

23. Education

Number of Respondent Percentage Male Female

Below Higher

Secondary

0 0.0% 0 0

Highere

secondary / A-

level

8 29.6% 6 2

Bachelors 12 44.4% 7 5Masters 7 25.9% 4 3Other 0 0.0% 0 0Didnt reply 0 0.0% 0 0Total 27

07. CONCLUSION AND RECOMMENDATIONS

7.1 Conclusion:

Most of the people are aware of stock market and they consider it as one of the

popular investment medium but they are not very much familiar with the

procedures, segments and functions of stock market. This lack of specific



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________________________________________________________________________

information about stock functionality exaggerates the present fear of stock

market.

People trust more on magazines and financial books then newspapers in making

investment decision. Mostly investors keep balance or cautious risk strategy, and

want high return on their investment. Stock has the potential to provide higher

return on any investment comparative to other security but it also carries higher

risk. Awareness level of stock market is low regardless of daily listing in

newspaper. People have not seen any major advertisement of stocks.

Economy of the country is the major factor that prevents investors from investing

in stock market, other then that volatile nature of stock market and law order

situation plays its part in hindering investors to invest in stock market. Knowledge

about Stocks is the fourth important factor that stops investor.

7.2 Recommendations:

Following are some recommendations that may be helpful for attracting

investors:

1. Economy of the country is the major factor for any investment. Smooth

economy will definitely generate more investment in stock market.



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________________________________________________________________________

2. Newspaper listing is not much helpful to people. It should be reformatted

to make it understandable to general people.

3. People trust on books and magazines. They can play important role in

educating people about stock market. Magazines and financial book

should easily available to general mass and they should contain up-to-

date information, which help investor in evaluating opportunity.

4. There is no particular advertisement of stocks. There should be proper

advertisements which encourage new people to invest in stock market.



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BIBLIOGRAPHY

Books:

Brigham, C. Ehrhardt (2003). Financial Management, theory and Practice,

11th edition.

Frederic S. Mishkin (2008).The Economics of Money, Banking, &Financial

Markets, Seventh Edition, Addison-Wesley, Boston, MA, latest edition.

Web sites:

http://www.brecorder.com/news/statistics/indicators/

http://www.eagletraders.com/books/afm/afm2.htm

http://www.finance.mapsofworld.com/

http://www.investorguide.com/igu-article-286-basic-economic-concepts-

introduction-to-inflation-and-its-impact.html

http://www.opfblog.com/2037/inflation-in-pakistan-%E2%80%94-who-to-

blame/

http://www.statpak.gov.pk/depts/fbs/statistics/price_statistics/methodology

_pri

ce_statistics.html

http://www.sbp.org.pk/reports/annual/

http://www.statpak.gov.pk/depts/fbs/statistics/price_statistics/methodology

_pri

ce_statistics.html

http://www.stockmarkettiming.com/psp.html

http://www.econ.iastate.edu/classes/econ308/tesfatsion/finintro.htm

http://useconomy.about.com/od/themarkets/a/capital_markets.htm

http://www.learningtree.com/investor/index.htm

http://www.nasdr.com

http://useconomy.about.com/od/themarkets/a/capital_markets.htmhttp://www.learningtree.com/investor/index.htmhttp://www.nasdr.com/http://useconomy.about.com/od/themarkets/a/capital_markets.htmhttp://www.learningtree.com/investor/index.htmhttp://www.nasdr.com/


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www.jang.cm.pk/thenews.html

www.brecorder.com

www.nation.com.pk

www.dawn.com.pk

www.dailytimes.com.pk

www.kse.com.pk

www.ise.com.pk

www.lse.com.pk

www.investopedia.com

www.frbsf.org/ecomics/

www.accountancy.pk

www.finance.gov.pk

www.jstor.org

www.wikipedia.com

www.surveysystems.com

www.en.mini.hu/stockmarket/stock.html

http://www.jang.cm.pk/thenews.htmlhttp://www.brecorder.com/http://www.nation.com.pk/http://www.dawn.com.pk/http://www.dailytimes.com.pk/http://www.kse.com.pk/http://www.ise.com.pk/http://www.lse.com.pk/http://www.investopedia.com/http://www.frbsf.org/ecomics/http://www.accountancy.pk/http://www.finance.gov.pk/http://www.jstor.org/http://www.wikipedia.com/http://www.surveysystems.com/http://www.en.mini.hu/stockmarket/stock.htmlhttp://www.jang.cm.pk/thenews.htmlhttp://www.brecorder.com/http://www.nation.com.pk/http://www.dawn.com.pk/http://www.dailytimes.com.pk/http://www.kse.com.pk/http://www.ise.com.pk/http://www.lse.com.pk/http://www.investopedia.com/http://www.frbsf.org/ecomics/http://www.accountancy.pk/http://www.finance.gov.pk/http://www.jstor.org/http://www.wikipedia.com/http://www.surveysystems.com/http://www.en.mini.hu/stockmarket/stock.html


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QUESTIONNAIRE1. Do you invest in any of financial instrument/Scheme other then Stocks? Yes No Dont knowIf you do invest in any security then GOTO Question#4

2. Are you planning to invest within few years? Yes No Dont know

3. If you do invest in then which type of investment (Stock, bonds, savingCertificates etc) you would prefer the most? Specify

4. Attitude towards Investment Risk, select one Conservative Cautious Balanced Adventurous Speculative

5. How much return would you expect of your investment?LowestLowAverageHighHighest

6. Do you know where the Karachi stock exchanges building is? Yes No

May be

7. Do any of your family members or friend trades in stocks? Yes No

8. Do you know how the Karachi Stock Exchange works? Yes



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5000-10000 10001-20000 20000-30000 ABOVE 25000

18. What are the factors, which stops you from investing in stocks? Check asmany, Lack of Knowledge about Stocks Very Risky Not allowed in Islam (Satta) Stock SpeculationEconomy of Country Country law and order situation Fraud from Brokerage Side Fraud from Company side Environment of Stock Exchange

Other. Specify

19.Do educational institute provides adequate teaching about stock markets? Yes No Dont know

Personal Information

20.Age Less then 18

18-25 YEARS 26-35 YEARS MORE THAN 35

21. Gender Male Female

22.What is your annual income?| Below 10000 10000-15000 15000-20000 20000-25000 ABOVE 25000

23.Education Below Higher Secondary Higher Secondary/ A Level Bachelors



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Masters Other Specify

why investors not investing in the stock market

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