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The Stock ExchangeMechanism
Ideas for Today and Tomorrowby Fahim Ahmed.
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The agenda of discussion.
What actually is an stock exchange.
Benefits for corporations. E.g. Pizza PLC.
What is an IPO
How we should invest in shares.
How index works.
How different economic indicators effects theindex.
How money works. Not taught in any university.
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History of Stock exchanges.
First stock exchange 1792
NYSE began in 1817. rented room on Wall
street.
East India company established the first stock
exchange in south Asia.
NASDAQ was created in 1971, it was the firstelectronic stock exchange.
The KSE was formed in September 1947.
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What we get in stock exchanges.
How it helps the listed companies.
We buy and sell shares of listed entities.
Every company needs money to grow . They have
just two options.
DEBT and EQUITY
Stock Exchanges help them getting money by
selling shares to investors. How equity is better then debt????
How investors value shares??
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PIZZA PLC
Lets say you want to open a PIZZA co. you do the
following numbers.
Building + equipment's costs 500,000.
Other running expenses . 250000
Annual earning 325000 so profit of 75000. not bed.
But a small problems arises. You dont have750,000. what you would do. What options you
have,
Lets discuss them on next slide.
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PIZZA PLC
You can get a loan BUTTTTTTTTTTT ????
Why not inviting people to invest in your PIZZA
PLC and they can get pieces of ownership in yourcompany.
They invest 750,000 and get 75000 per arum. A
solid 10 percent return. Wait. Why not I double the share price to
1,500,000 the investors will still get 5 %....think of
an IPO now.
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IPO ??
Initial public offering.
Famous 3 global IPOs
VISA raised 17.9 billion dollars.
GOOGLE raised 35.4 billion dollars.
FACEBOOK 104 billion dollars.
Overnight millionaires and billionaires
Tech IPOs are in fashion now.
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Factors which should be
considered before investing in
shares. Young lad or old man?
Risk appetite?
Duration of investment?
Dont put all eggs in one basket
be fearful when others are greedy, be greedy
when others are fearful Review your investments constantly and dont
panic..
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Economic and social factors
which effects index performance.
Political instability
Economic crises i.e recession
Poor job reports or negative industrial figures
The fiscal and monetary policy
Law and order
Performance of the stock market
Other investment opportunities in the country.
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How index works.
It measures the value of market capitalization in
the stock market.
Blue chips KSE 100
DOW JONES INDUSTRIAL AVERAGE
FTSE 100 NASDAQ
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ASK NOW
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