financial products & services

JOINTLY LAUNCHED BY MEDIA PARTNER

The "Financial Literacy Initiative", is neither intended to promote or publicize any particular type of investment or product, nor is it aimed

to endorse any specific kind of financial institution or market.

The overall objective of the financial literacy initiative is to promote

the financial skills and the knowledge of the common citizens, and to

support the agenda for the broader financial inclusion in our societies.

While the sponsors/partners/promoters of the financial literacy

initiative may share these broader objectives, however they may only

support such educational & informational activities/programs that are

relevant to the social responsibility objectives of their organizations.

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January 17, 2013

Presented to

National Grammar School

Presented by

Hifsa Siddiqi Investor Relations Department, LSE


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Deposit Accounts Current Accounts PLS Saving Accounts Basic Banking Account

Time Deposit

General Banking

Credit Cards Home Loans Car Financing

Consumer Financing


A process by which a firm can obtain the use of a certain fixed

assets for which it must pay a series of contractual, periodic,

payments

Finance Lease

Operating Lease

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Musharakah is a contractual relationship formed through mutual consent of

the parties for sharing of profits and losses in a joint venture. Assets in the

venture are jointly owned in proportion to each partners contribution. The

profits are shared in a pre-agreed ratio. Losses, however, are incurred in

proportion to each partners investment.

Mudarabah is also a form of partnership formed between provider of

capital and provider of expertise or human resource. Proportions for sharing

profit are decided upfront. Losses are incurred solely by the partner

contributing capital.

Ijara: Under this facility a client may take on rent, property, vehicle or any other real asset belonging to the bank. The bank transfers the right of use of the asset to the client, while retaining the ownership of the asset.


Insurance is a form of risk management primarily used to hedge

against the risk of a contingent, uncertain loss.

Auto insurance

Property Insurance

Health insurance

Casualty

Life Insurance


Takaful is an Islamic insurance concept observing the rules and

regulations of Islamic law. This concept has been practiced in various

forms for over 1400 years. Muslim jurists acknowledge that the basis

of shared responsibility) laid the foundation of mutual insurance.

Principles of Takaful

Policyholders cooperate among themselves for their common good.

Every policyholder pays his subscription to help those who need assistance.

Losses are divided and liabilities spread according to the community pooling

system.

Uncertainty is eliminated concerning subscription and compensation.

It does not derive advantage at the cost of others.


A mutual fund is a type of professionally-managed type collective investment scheme that pools money from many investors. Open Ended

Closed Ended

Investment Styles/Mandates Money market funds

Fixed Income Funds

Equity Funds

Hybrid Funds

Currently Assets under Management by Mutual Funds Manager exceed 350 Billion Rupees


Sole Proprietorship

Partnership

Single Member Pvt.

Ltd. Company

Private Limited

Company

Public Limited

Company

Increasing Stature Increasing Financial Standing Increasing Financing Options Increasing no. of Owners Increasing Transparency

Decreasing Personal Liability Decreasing Control


Easy to start up

Subject to fewer regulations relative to other types of businesses,

Full autonomy with regard to business decisions,

Easy to discontinue as well.

Setting up Sole Proprietorship

1. Decide on and select a Business Name

2. Print Letter Heads, envelopes and your business/visiting card

3. Write an Account Opening Request to your Bank, stating that this is your business and you are the sole proprietor of it

4. Open an account at a local bank's branch close to you

5. Next request the bank to issue a letter stating that this is your account and business

6. Submit the bank certificate and your application with the Federal Board of Revenue

7. If you are on a job, you already have a NTN (National Tax Number) - the same NTN will be used for your Sole Proprietorship status

8. Once the status is added, you are a registered legal entity

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A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business.

Partnerships are often favoured over corporations for taxation purposes, as no dividend tax levied.

owners of a partnership may be exposed to greater personal liability than they would as shareholders of a company.

Setting Up Partnership

Formed under the Partnership Act, 1932 ("Partnership Act")

A Partnership Deed is written, where both the parties are identified along with their residential address and CNIC number.

The profit sharing ratio is stated

The nature of business proposed to be carried out by the firm is also stated

The amounts being brought in by each partner are stated as well.

The firm becomes effective from the date of execution or signing of the Partnership Deed.

The Partnership Deed remains effective as long as the business is a going concern, thereafter if desired by the partners the firms may be dissolved.

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Formed under Companies Ordinance 1984

Minimum Paid-up-Capital: PKR 100,000

Minimum/Maximum number of members: 1

Minimum Number of Directors: 1

Requirement of Memorandum & Articles of Association




Minimum number of members: 2

Maximum: 50






Minimum number of members: 3

Maximum: Unlimited




Memorandum of Association

Name & Address

Objectives

Share Capital (No. of Shares & face value)

Articles of Association

Shares Related Matter (Allotment, Transfer etc.)

Alteration of Capital

General Meeting (Notice, Proceedings, Voting etc.)

Directors of Company (Names, Powers & Duties)

Dividends

Accounts


Capital Market Products

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Regular Market

Future Market

Deliverable Futures

Cash Settled Futures

Stock Index Futures

Bonds Market

Margin Trading System

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The term "Margin Trading" refers to the financing of purchased

securities by equity participation.

Done through a separate platform provided by NCCPL

Available only in Eligible Securities

Mark-up rate = KIBOR + 8%

Marked-to-Market Losses

Maximum contract duration = 60 calendar days

Trading Financiers: Broker Clearing Members, Non Beoker

Clearing Members and any other corporate entity admitted by

NCCPL Board and SECP

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ULTRA

NCSS

Financing

Through

Financier (75% & 25%)

Settlement and Parking

of Securities in Blocked

Account of Financier

Forced Release of one forth

quantity

- Sale

- Settlement

- Finance


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LSE launched LSE-25-Index on December 20, 2002, which replaced the 101- Index. The Index has a Base Figure of 1000.

The Index closed at 2,817.25(2nd January, 2012)

LSE 25-Index includes the top 25 traded companies at LSE and captures 37% of the market capitalization and 76% of the total trading volume of LSE.

The Index was last reconstituted on Dec 31st, 2011, in line with the regular review policy.


Used to gauge collective performance

Considered barometer of market performance

May be biase

Index = Market Capitalization of Day 1 * 1000

Market Capitalization of Base Day

Day 0 Company Share Price Outstanding Shares Market Value

A 20 1000 20,000

B 50 2000 100,000

C 10 5000 50,000

170,000

Base Index Figure 1,000.00

Base index point value 170

Base Index Capitalization

Day 1 Share Price Outstanding Shares Market Value %age Change

A 30 1000 30,000 50%

B 40 2000 80,000 -20%

C 20 5000 100,000 100%

210,000 24%

New Index Value 1,235.29 24%

New Index Capitalization

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LSEs Listing Regulations

Public Limited Company

Minimum Paid-up Capital: Rs.

200 Million

Companys Equity has NOT

been eroded by more than 40%

P

P

P

Issue offered to public must be subscribed by a minimum of 500 Applicants


LSEs Listing Regulations

NOT Associate of a Listed Company in default

of Listing Regulations

NOT Subsidiary of a Listed Company in

default of Listing Regulations

Promoters/Sponsors/Controlling directors are

NOT Promoters/Sponsors/Controlling

directors of a company in default of Listing

Regulations

CEO had NOT been a CEO of a company in

default of Listing Regulations

P P P P


Application for Listing

Complete Documents

Received by Exchange along

with Prospectus

Checked by

Exchange

Approval by Company Affairs

Committee

Application for Approval of

Prospectus from SECP

Application for Trading

Symbol to NCCPL

Application for Prospectus Publication

+

Subscription Date

Checked by

Exchange Approval

Publication of

Prospectus

Provisional Listing

in case of Public Offer of Rs. 150 Million or above

IPO

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IPO

Dispatch of Physical and

CDC Shares

Balloting in case of Over

Subscription

Underwritten by Underwriters if Under-

subscribed

Approval Application for NOC and release of funds along

with Auditors Certificate in case of under-Subscription

Advertisement in

Newspapers Live in CDC

Results Notification to

Exchange

FORMAL LISTING ON

EXCHANGE


Individual/Sole Proprietor

Income less than PKR 350,000 0%

Income more than PKR 1,500,000 25%

Partnerships 25%

Companies

Small Companies 25%

Other Companies 35%

Other Taxes

Cash Withdrawal 0.02% (Advance)

Supplies 2.5% (Adjustable)

Services 6.0% (Adjustable)

Dividend Income 10.0% (Adjustable)

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Application for

Membership

Complete

Documents

Received by

Exchange

Checked by the

Exchange

Notice inviting

objections of

Members

NOC from various

Departments of the

Exchange

Membership

Committee

Meeting

Notice to SECP,

KSE, ISE, NCCPL,

CDC and all

concerned entities

and Issuance of

Membership

Certificate

Approval


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Submits required Documents

to SECP

Issuance of Certificate of

Broker Registration by SECP

Activation of Membership With

Exchange

Formally Becomes a

Broker of the Exchange

Live in Trading

Applies

and open

account in

CDS &

NCSS


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One of the most important decisions when trading in stock market is choosing a brokerage firm and an individual broker. In choosing a broker, several factors should be considered:

Ethical Business Record

Length Of Time in Business

Type of Service

Commissions

Research

IT/Online

Individual/ SMC/ Private/Public Member

Network/ Branches

Online Reporting

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Are knowledgeable about the markets.

Keep their clients informed about the market and the conditions of their accounts.

Have good personal contacts in the marketplace that often can provide background information on market news that is not otherwise readily available.

Do not pressure clients to trade.

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Member Means a Member of a Stock Exchange.

Broker Means any person engaged in the business of effecting

transactions in securities for the account of others.

Agent Means a person appointed by a Member of a Stock Exchange to

act on his behalf for the purpose recognized by a Stock Exchange and includes a sub-Broker or head of a branch office.

Trader Means an employee of a Member who is authorized by such

Member to execute trades of the investors through the automated trading system in such Exchange.


Trading Products

Regular Market

Automated trading of Equities & Funds

Debt Securities Trading

Automated trading of Debt Securities

Futures

30-days Deliverable Future Contracts

90-days Cash Settled Future Contracts

7-days Cash Settled Future Contracts

90-days Stock Index Futures Contracts (KSE Only)

Margin Financing

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T+2 Settlement System

In the T+2 settlement system, purchase and sale of

securities is netted and the balance is settled on the second

day following the day of trade.

Spot/T+1 Transaction

Spot transactions imply delivery upon payment. Normally in

spot transactions the trade is settled within 24 hours.


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financial products & services

Documents

media partner insurance

media partner takaful

media partner musharakah

financial literacy initiative

islamic insurance concept

foundation of mutual

financial skills

broader financial inclusion