MACRO ECONOMICS

Final Project On

LAHORE STOCK EXCHANGE

Submitted To :

Prof. Madiha Imran

Section :

Group Members :

Rana Waqar Ahmed Yasir Mushtaq Muhammad Arslan Arslan Mehmood

L1S10MBAM2163 L1S10MBAM0161 L1S10MBAM0156 L1S10MBAM2157

LAHORE STOCK EXCHANGE

Introduction
Lahore Stock Exchange is the technologically advanced Stock Exchange of Pakistan situated in the largest populous Punjab province which caters to the needs of entrepreneurs for raising capital and provides investment opportunities to the investing public. LSE is fully committed to provide transparent, efficient, economic, well equipped and investor friendly environment for the promotion of capital market in Pakistan. Activities at LSE have increased significantly in all operational areas since its inception. Over the years, LSE has 497 listed companies with total listed capital of Rs. 850 billion having market capitalization of Rs. 3.134 trillion as on February 14, 2011. A number of significant initiatives have been taken to improve the regulatory regime and the trading environment for the benefit of Institutional Investors as well as listed companies. LSE has successfully met various challenges and has now emerged, fully geared and positioned to aggressively compete with its fellow Exchanges, contributing towards the growth of Capital Markets in Pakistan.

History & Milestones

Lahore Stock Exchange (LSE) was incorporated in October 1970 under the Securities and Exchange Ordinance, 1969 as a company limited by guarantee. It initially had 83 members and was housed in a rented building in the crowded Bank Square area of Lahore. 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 KSE, or be limited to do business in Bonus, Vouchers and Bonds. After construction of its own building located at 19-Khayaban-e-Aiwan-e-Iqbal, Lahore, there was sufficient space, modern facilities, and all the needed communications at this new location. The move could not have been at a more opportune time. The Government of Pakistan had embraced the market economy policy. Deregulation was rapidly underway. Privatization of nationalized, and a part of public sector industries was speedily moving ahead. Asia was identified as the future centre of world growth. Lahore Stock Exchange was prepared to contribute its full share in this growth. 21 new members including 6 corporate members were inducted in 1994, bringing the number of members 150. Some members have converted their individual memberships into corporate memberships. The activities of the Exchange have increased in all areas since inception and it has become a key institution of the financial sector of Pakistan

Corporate Profile
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The Governing Board of LSE consists of 10 directors, including the Chairman, out of which 4 are outside non-members directors appointed by Securities and Exchange Commission of Pakistan (SECP), from amongst securities market experts, lawyers, chartered accountants, investment bankers, etc. There are 5 elected member directors and the CEO/MD by virtue of his office is also the director. The Board has appointed a foreign qualified experienced and professional CEO/MD who has been delegated the authority to deal with all operational matters of the Exchange independently. This has ensured the protection of interests of various stakeholders i.e. members, investors, issuers and regulatory authorities. LSE has taken effective surveillance, risk and exposure management measures to focus and control the risk associated with members trading. LSE has implemented a fully automated inhouse developed Trade Risk Filter (TRF) to efficiently monitor members pre-trading exposures on real time basis. This has been a quantum leap for us in improving our risk management systems. LSE has implemented Regulations Governing Members Exposure to ensure smooth operation of LSE Clearing House. Every active member is allowed to trade up to 25 times of its net capital balance. Active members are also required to join CDC and NCCPL. LSE is the first fully automated Stock Exchange of Pakistan and has the most premier technology. LSE has done large investment in technology & automation to keep pace with globalization of securities trading. The Clearing and Settlement System is also completely computerized and members have online access to their clearing data from their back offices. The software to link the Clearing, Settlement and Dissemination Systems with the screen based trading system has been developed in-house. Ultra Trade System had been provided to the Karachi Stock Exchange and Ghana Stock Exchange on commercial basis. LSE will continue to innovate in order to provide investors and other market participants with more choice and convenience. LSE has incorporated Code of Corporate Governance in the Listing Regulation of the Exchange, which provides regulatory framework for the management of listed companies in compliance with best practices

LSE Index
Training Institute is the first and only specialized Securities Market functioning Institute of its kind in Pakistan. LSE has maintained its tradition of innovation and development of the Capital Market. Trainings on different Stock Market Topic like Understanding Stock Markets (USM), Trading Work Station (TWS) and the Course for Lahore Economic Journalists Association (LEJA) have been successfully completed.

Procedure And Practice

Days Hours Monday-Friday Monday-Thursday, 09:45 - 14:15 ; Friday, 09:30 - 12:00 & 14:30 - 16:00 CFS release: Monday-Thursday, 13:30 -15:00 ; Friday, 13:30 - 16:30 Open market CFS: Monday-Thursday, 15:30 - 16:30 ; Friday, 16:45 - 17:30

Market segmentation System

4 segments Automated trading, clearing & settlement, depository link, data dissemination, reporting facilities, internet services, WAN WAN Continuous auction No Ordinary Shares, Preference Shares, Modaraba Certificates, Government Bonds/Securities, Term Finance Certificates (TFC) Pakistan Rupees Best bid/ask, last price, last volume, total volume, listed company announcements

Mechanisms Market-maker/ Specialists Instruments Currency Real time information

Structure & Regulations

Legal Regulation Securities market regulations Trading rules Surveillance Corporate actions Trading halts regulations Investor protection
Company Limited by Guarantee, without share capital Self Securities & Exchange Ordinance 1969 and Rules framed there under, Companies Ordinance 1984 Exchange Yes, electronic Centralized No Yes

5 Year Statistical Comparison5 Year Statistical Comparison

Particulars
Number of Companies Market Capitalization Total Vol.-Stocks Total Vol.-Stocks (# Shares*) Avg. Daily Vol.-Stocks Avg. Daily Vol.-Stocks (# Shares*) Total Vol.-Bonds Total Vol.-Bonds (# Shares*) Avg. Daily Vol.-Bonds Avg. Daily Vol.-Bonds (# Shares*) Total Vol.-Other Total Vol.-Other(# Shares*) Avg. Daily Vol.-Other Avg. Daily Vol.-Other (#Shares*) Monthly Avg. Turnover Ratio Index Currency/US$

2007
516 66501.441 12833.962 8305.0968 52.5982 34.0373 0 0 0 0 0 0 0 0 0.0161 4504.4 61.95

2008
512 21416.358 4567.8691 3094.1711 18.4188 12.4765 0 0 0 0 0 0 0 0 0.0178 1491.94 79.05

2009
512 30621.512 2014.5848 4213.6609 8.1894 17.1287 0 0 0 0 0 0 0 0 0.0055 2893.88 84.2

2010
503 36883.946 623.4216 2042.3208 2.4838 8.1367 0 0 0 0 0 0 0 0 0.0014 3733.01 85.5

YTD 2011
496 34681.15 114.592 386.0819 1.3806 4.6516 0 0 0 0 0 0 0 0 0.0008 3267.99 84.68

* in millions

Taxes
Cash Dividends Interest Income Capital Gains
10% 10% Exempt until 2007

What Is The Stock Exchange?

The stock exchange provides a market place where shares can be bought and sold. What is the Role of the Stock Exchange?
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The stock exchange admits companies for trading at their securities. It provides a market for raising capital by companies.

y y

It provides a market place for shares of listed public companies to be bought and sold, by bringing companies and investors together at one place. The exchange's role is to monitor the market to ensure that it is working efficiently, fairly and transparently.

Stock Exchanges in Pakistan: There are three stock exchanges in Pakistan:

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Karachi Stock Exchange (Guarantee) Ltd. Lahore Stock Exchange (Guarantee) Ltd. Islamabad Stock Exchange (Guarantee) Ltd. Of these, Karachi Stock Exchange is the biggest exchange in the country.

Trading and Settlement: The stock exchanges have introduced a computerized trading system to provide a fair, transparent, efficient and cost effective market mechanism to facilitate the investors. The trading system comprises of four distinct segments, which are:
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T+2 Settlement System. Provisionally Listed Counter. Spot Transactions. Futures Contracts.

T+2 Settlement System:

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In the T+2 settlement system, purchase and sale of securities is netted and the balance is settled on the third day following the day of trade.

Benefits of T+2 Settlement System:

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It reduces the time between execution and settlement of trades, which in turn reduces the market risk. It reduces settlement risk, as the settlement cycle is shorter.

Provisionally Listed Counter:

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The shares of companies, which make a minimum public offering of Rs.100 million, are traded on this segment from the date of publication of offering documents When the company completes the process of dispatch/credit of allotted shares to subscribers, through CDC it is officially listed and placed on the T+2 counter. Trading on the provisionally listed counter then comes to an end and all the outstanding transactions are transferred to the T+2 counter with effect from the date of official listing.

Spot/T+1 Transactions:
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Spot transactions imply delivery upon payment. Normally in spot transactions the trade is settled within 24 hours.

Futures Contract:
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A Futures contract involves purchase and sale of a financial or tangible asset at some future date, at a price fixed today.

What Are Shares?

Once the shares are brought and transferred in your name your name will be entered in the company s share register, which will entitle you to receive all the benefits of share ownership including the rights to receive dividends, to vote at the company s general meetings to receive the company s reports. If you decide to sell your shares you will need to deliver share certificates to the broker in time for the transaction to be completed. With the introduction of the Central Depository System (CDS), an investor can have shares in paper form or can own shares in an electronic book- entry form at the Central Depository Company (CDC).
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Why Do Companies Issue Shares? Companies issue shares to raise money from investors. This money is used for the development and growth of businesses of companies. A Company can issue different types of shares such as ordinary shares, preference shares, shares without voting rights or any other shares as are permissible under the law. These give shareholders a stake in the company s equity as well as a share in its profits, in the form of dividends, and a voting right at general meetings of shareholders. Why Do Investors Buy Shares? Studies have shown that over a twenty-year span, investment in shares has provided greater returns than most other forms of savings. Shares can provide you with a regular stream of income through dividends as well as the potential for your investments to grow in value. If the prices of shares go up, you can sell them for more than you paid. This is called capital gain. What are Dividends? Dividends are returns paid to shareholders out of the profits of the company. Returns can be in the form of cash or additional shares of the company called bonus shares. Dividends are usually paid once or twice a year depending upon the company s profit distribution policy. What is Capital Growth? This is one of the ways in which shares differ from deposit accounts. The principal amount of money you put in a bank or any fixed income savings scheme always stays the same e.g. if you start with Rs.100,000 you will always have Rs.100,000 (other than any interest earned).changes in value according to the performance of the company. With good management, the value of your investment in shares of a company can grow over time so that your shares are worth more than you paid for them. This is capital growth.

Risks And Rewards:

Buying shares can offer advantages over saving in deposit accounts: your investment may increase in value besides paying you dividends. You share the rewards when the company does well and the price of the shares goes up. But if the company performs badly, the share price may go down and the value of your investment will be reduced. Other factors, such as the performance of the stock market as a whole and the general economic climate, may also affect the price of your shares. Investment in shares is therefore investment in risk capital . The shareholders can be rewarded for taking this risk and the potential return on your money can be higher than that on other investments. You can reduce your risks with careful planning.

Market Capitalization & Index

Date May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 Lahore Stock Exchange: Market Capitalization & Index Market Capitalization US$ Millions 29,320.69 30,684.71 33,054.51 30,738.74 30,300.45 31,893.35 33,766.57 36,883.95 37,603.71 34,354.35 34,290.19 34,681.15 Index 2,960.94 3,092.67 3,367.38 3,107.18 3,114.90 3,300.73 3,502.97 3,733.01 3,774.83 3,364.16 3,342.56 3,267.99

Various Ways Of Becoming A Shareholder

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Initial Public Offering (IPO): When companies offer shares to the general public for the first time it is known as a flotation or an Initial Public Offering (IPO). These shares can be bought directly from the company without paying stockbroker s commission. You might see an advertisement in a newspaper from a company issuing shares or your stockbroker might tell you about a company making an IPO. Simply fill in the share subscription form and deposit the form along with subscription cheque in a branch of the designated bank(s).

Right Issues:

Right shares are issued when companies need to raise additional capital to finance their new expansion projects or to meet working capital needs, etc. In case of rights issues, the existing investors have the right to subscribe to these new shares in proportion to their respective shareholdings.

Organizational Structure

ANNUAL TURNOVER

Ownership Structure And Board Of Directors

Ownership Structure
Member Strategic Investor General Public 40% 40% 20%

Board Of Directors
Proposed By Exchange Proposed By SECP Managing Director Total 4 6 1 11

MEMBERS
Number Of Members.
The number of Members of the Exchange, for the purpose of registration, is declared to be 200.

Increase In Numbers.
The Exchange in general meeting may, by ordinary resolution, from time to time, determine the maximum number of Members of the Exchange not exceeding two hundred (200). The Exchange in general meeting may, by special resolution, increase the number of Members beyond 200.

ADMISSION
Power to Frame Rules.
Upon these Articles coming into force the Board shall, in accordance with these Articles, frame rules and regulations regarding the admission, expulsion and suspension of Members. The Board shall, subject to the approval of the Securities & Exchange Commission of Pakistan, have the power to alter, add to, repeal or substitute the said rules and regulations, or any of them, as it may consider necessary or desirable in the interests of the Exchange.

Application in Accordance with Rules.

(a) No application for membership shall be entertained unless it is in conformity with the rules and regulations pertaining thereto as framed by the Board or amended by it from time to time. (b) Every person who applies for the membership of the Exchange, other than a person who has been nominated and such nomination has been accepted or approved by the Board in accordance with the Article 21, shall deposit with his application an entrance fee, as may be fixed from time to time in the general meeting. Such fee shall become the property of the Exchange and shall be nonrefundable.

Eligibility.
1. No person, other than a Corporate Member, shall be eligible to be a Member if a) he is less than twenty one (21) years of age; b) he is not a citizen of Pakistan; a. he has been adjudicated an insolvent or has suspended payment or has compounded with his creditors; b. he has been convicted of an offence involving fraud or breach of trust; c. he has been at any time expelled by this or any other Stock Exchange; d. he has been previously refused admission to membership, unless a period of one year has elapsed since the date of such rejection; e. he is a lunatic or a person of unsound mind;

he has not had experience in the business of securities for a period of not less than two years' provided that the Board may waive this requirement relating to experience in the business of securities of such person is in respect of means, integrity and background, considered by the Board to be otherwise qualified for membership. 2. A Corporate Member must fulfill the following requirements of membership: a. be a company or a statutory corporation or a body corporate; b. have a minimum issued, subscribed and paid-up capital of Rs. 10 million which minimum limit may be increased by the Directors, to be effective after being approved by the Members in general meeting and notified in the official Gazette; c. in the case of statutory corporation or a body corporate to which Section 183 of the Ordinance applies, the membership application shall be accompanied by a "no objection" from the Federal or a Provincial Government, as the case may be; 3. a. It shall be possible for a Member being an individual or a partnership to convert its membership to a Corporate Membership without paying an additional admission and entrance fee; b. Provided that National Investment Trust Ltd., a company incorporated under Companies Ordinance, 1984, and Investment Corporation of Pakistan, a statutory corporation incorporated under the Investment Corporation of Pakistan Ordinance, 1966 (Ordinance VI of 1966) shall not be eligible to apply for or become members of the Exchange; c. Where a member converts into corporate membership or resigns from his membership in favor of and for nominating a Corporate Body and of which he simultaneously becomes a nominee to represent such corporate body as a member of the Exchange, his resignation and his consequent nomination by the corporate body shall not affect his office of the Chairman and/or a Director, which he may be holding at the time of his resignation in favor of such corporate body. Additionally, the tenure of such individual membership will be taken into account for determining the seniority of such corporate membership for the purpose of election or co-option to Board under Article 66 herein below. d. A corporate body which becomes a member of the Exchange may nominate one of its Directors to represent its membership of the Exchange and such nominee shall become eligible for being elected as the Chairman and/or a member of the Governing Board of Directors.

f.

Conditions Of Continued Membership

A Member shall at all times maintain a net capital balance in the capital account of an amount which is: a. in the case the Exchange in the previous calendar year, had on the cash counter a turnover of securities, other than bonus vouchers, exceeding one crore in number, not less than Rupees fifty thousand (Rs.50,000/) or such other balance as may from time to time be required by law; and b. in any other case, not less than Rupees fifteen thousand (Rs.15,000/-) or such other balance as may from time to time be required by law;

provide that a Member who is also a member of any other stock exchange shall maintain a net capital balance of not less than Rupees fifty thousand (Rs.50,000) or such other balance as may from time to time be required by law; provided further that, in the case of a partnership firm the amount of the net capital balance to be maintained shall be the amount obtained by multiplying such balance as may be required for a Member of the Exchange by the number of such partners of the firm as are Members of the Exchange.

Capital Balance To Be Maintained.

The membership of a Member or of Members who are partners in a partnership firm and who are in active business shall become suspended as soon as the net capital balance falls short of the amount specified in the preceding Article and shall remain so suspended until the net capital balance is increased so as not to fall short of that amount. Every Member shall report to the Exchange weekly that he or the firm of which he is a partner had, at all times during the week to which the report relates, a net capital balance of an amount not less than that specified in the preceding Article and shall forthwith inform the Exchange if, at any time, such balance falls short of the amount.

Recommendation.
A candidate for admission must be recommended by two Members of at least two years standing each and none of whom should be member of the Board. The recommenders must have such personal knowledge of the candidate and of his past and present circumstances as shall satisfy the Board. A notice of each application for admission with the names of the recommenders shall be posted on the notice board of the Exchange for not less than fifteen (15) days prior to the day on which the Board is to elect Members.

Objections.
A Member intending to object to the admission of a candidate shall communicate the grounds of his objection to the Board by letter within fifteen (15) days of the posting of the notice referred to in the preceding Article. Any such communication shall be deemed privileged and confidential.

Scrutiny By Membership Committee.

No application shall be admitted as a Member unless and until his application has been scrutinized by the Membership Committee and a positive recommendation, certified in writing by the Committee Chairman, has been accepted by the Board.

Personal Appearance.
A candidate for admission and his recommenders shall, if required by the Board or Membership Committee, appear personally before any meeting of the Board or Membership Committee, as the case may be and shall answer all questions which may be put to them.

Admission By Ballot.
The admission of all new Members shall be by ballot of the Board. A candidate shall be duly elected if approved in accordance with Article 83.

Power to Reject.
The Board may, in its absolute discretion, reject any application for admission without assigning any reason therefore .

Misrepresentation.
The Board may, in accordance with Article 83, expel a Member if in its opinion he has in or at the time of his application for admission to membership or during the course of the inquiry preceding his admission: a. made any willful misrepresentation; or b. suppressed any material information required of him as to his character and antecedents; or c. has directly or indirectly given false particulars or information or made a false declaration.

Time of Admission.
A newly elected Member shall, upon receipt of intimation of his election, pay such fee as may be determined from time to time by the Board any duly confirmed by the Members in general meeting, and, upon payment thereof, he entitled to receive a membership certificate or card.

Notification.
When a member is admitted as provided in the preceding Article a notice of such admission shall be pasted on the notice board of the Exchange along with the name of the individual/partnership/Corporate Member with the address of the principal place of business/registered office of such member.

PROBLEMS OF STOCK EXCHANGE

1)

Insufficient Growth in Market Capitalization

a) b) c) d) e) Market Size below International Benchmark Too Few Listings Low Quality of Many Listed Companies Limited Free Float and Supply-Demand Imbalance

2)

Narrow Base of Investors

a) b) c) d) e) Minimal Share Ownership Stagnation in Number of Shareholders Small Number of Unit Holders in Mutual Funds Lack of the Market Awareness

3)

Lack of Balance in Governance Structures

a) b) c) d) e) Weak Professional Management Ineffective Regulation of Members Ineffective Regulation of Listed Companies Unequal Access to Corporate Announcements Mixed Performance of Non-Member Directors

4)

Fragmentation of Market
a) b) c) d) Division of Liquidity and Distortion of Price Discovery Cost Inefficiency for All Stakeholders Complexity in Operations Lack of Inter-exchange Competition

5) 6) 7)

Inadequate Investor Protection Weak Management of Systemic Risk Insufficient Economic Capital
a) b) c) d) Limited Revenues Inequitable Burden Sharing Low Level of Capital Expenditure No Financial Guarantee

8)

Insufficient Human Capital

a) Few Professionals b) Inability to develop New Products and Services

9)

High Degree of Speculation and Concentration

a) b) c) d) Low Levels of Actual Settlement Concentration of Liquidity and Market Capitalization Preference of Badla Financing (unregulated) Excess Volatility

10) Large a) b) c) d) e) f) g)

Number and Low Quality of Intermediaries

Weak Criteria to become a Member Weak Criteria to become a Broker Weak Criteria to become an Agent or Trader Barrier to Entry to New Intermediaries Membership Card Treated as Real Estate Low Capitalization of Brokers A Single Class of Brokers

REGIONAL ADVANTAGE
Pakistan s sock markets have historically exhibited low correlation with World markets as evidenced by this Correlation Matrix: DJIA DJIA FTSE DAX Hang Seng NIKKEI Sensex LSE 1.00 0.79 0.86 0.70 0.65 0.73 0.15 FTSE DAX 0.86 0.87 1.00 0.69 0.73 0.76 0.09 Hang Seng 0.70 0.70 0.69 1.00 0.59 0.76 0.09 NIKKEI 0.65 0.73 0.73 0.59 1.00 0.65 0.12 Sensex 0.73 0.74 0.76 0.76 0.65 1.00 0.15 LSE 0.15 0.13 0.09 0.09 0.12 0.15 1.00

0.79 1.00 0.87 0.70 0.73 0.74 0.13

The Low correlation provides international fund manager diversification benefit, and Pakistan s stock markets competitive advantage over other Emerging and/or regional markets

RIGHTS IN MEMBERSHIP
Membership Not Assignable.
A Member shall not assign, mortgage, pledge, hypothecate or charge his right of membership or any rights or privileges attached thereto and no such attempted assignment, mortgage, pledge, hypothecation or charge shall be effective against the Exchange for any purpose nor shall any right or interest in any membership other than the personal right or interest of the Member therein be recognized by the Exchange. The Board may, in accordance with Article 83, expel any member who acts or attempts to act in violation of the provisions of this Article.

Nomination.
a. A member of not less than two years standing who desires to resign may nominate a person otherwise eligible under the rules for admission to membership of the Exchange as a candidate for admission in his place. b. A member of not less than two years standing, who desires to resign, may with the sanction of the Board, nominate his father, his mother, own son, own daughter spouse, brother, brother s spouse, brother s son, sister, sister s spouse, sister s son, otherwise eligible under the rules for admission to membership of the Exchange as a candidate for admission in his place. The nomination of above stated relations, would be exempt from the payment of nomination free prescribed by the Board from time to time. c. Notwithstanding the provisions of sub-class (a) hereof, the Board may, in their unfettered and absolute discretion, allow any Member, irrespective of the period of his membership, to resign his membership of the Exchange with liberty to nominate a person otherwise eligible under the rules for admission to membership of the Exchange as a candidate for admission in his place. d. Any member, during the tenure of his membership, may nominate in writing executed before the Managing Director or Secretary of the Exchange or sent to the Office, duly supported by an affidavit, any other eligible person to become a member upon his death. Such nomination shall be subject to acceptance by the Board. In the absence of such nomination the representatives of the deceased Member may, with the sanction of the Board, nominate one of themselves or any other eligible person for admission in the place of the deceased member. e. A fee of Rs. 1,000/- shall be paid by a member elected on the nomination of a member who wishes to resign, except a legal heir, nominated by a deceased member who will not be required to pay the election fee. f. The manager of the estate of a member, who is of unsound mind may, with the sanction of the Board, nominate himself or any other eligible person for admission in place of such member. g. The Board may, in its discretion, without assigning any reason whatsoever therefore, refuse to accept or approve any nomination. h. In the event of the Board accepting any nomination, the original member shall cease to be a member and the nominated member shall become a member in his place from the date of acceptance.

i.

j.

When any member dies or is of unsound mind, all his debts and other liabilities to any member, to the extent that the same shall have been admitted by the Board, shall be paid and satisfied or otherwise secured by the person nominated by the deceased member under his will or testamentary writing or by his legal representative or by the manager of the estate of the person of unsound mind before exercising his right of nomination. If the person nominated by the deceased member under his will or testamentary writing or his legal representatives or the Manager of the estate of the member of unsound mind, shall unable to pay and satisfy or otherwise secure such debts and liabilities, his right of membership, shall be disposed of by the Board and the proceeds thereof applied in the following order of priority to the following purposes, namely i. the payment of all debts, fines, moneys and other charges due and payable by such member to the Exchange or the Clearing House ii. The payment and satisfaction of all debts, obligations and claims arising from all contracts or engagements made subject to the rules of the Exchange, to the extent that the same shall have been admitted by the Board, and if such proceeds shall not be sufficient to pay and satisfy such debts, obligations and claims in full, they shall be paid and satisfied pro-rata; and iii. The payment to the person nominated by the deceased member under his will or testamentary writing or to his legal representatives or the manager of the estate of the member of unsound mind appointed as aforesaid of the surplus, if any, of such proceeds upon the execution by him or them of such release or indemnity as the Board may require.

k. A right of membership which under any Articles, rule of regulation for the time being, in force is forfeited to or vests in the Exchange, shall belong absolutely to the Exchange, free of all rights, claims, or interest of such member or any person claiming through such member or in his insolvency, and the Board shall be entitled to deal with or to dispose off the said right of membership as the Board may think fit. If the Board sells such right of membership the same proceeds thereof, shall in the first place be applied as provided in sub-clause (j) and the surplus, if any, of such proceeds shall form part of the funds of the Exchange. l. In case nominations made under sub-clause (d) and (f) are not acceptable to the Board, the Board may make such other arrangements as it thinks necessary. m. When accepted by the Board nominations shall carry all rights and privileges as a member, including any right to the use of, or claim upon, or any interest in any property or funds of the Exchange.

GENERAL MEETINGS
Annual General Meeting
A general meeting to be called annual general meeting, shall be held once at least in every year within a period of six months following the close of the Exchange s financial year and, not more than fifteen months after the holding of its last preceding annual general meeting as may be determined by the Directors.

Other Meetings
All general meetings of the Exchange other than the annual general meeting shall be called extraordinary general meetings.

Extra-ordinary Meetings
The Directors may whenever they think fit, call an extraordinary general meeting, and extraordinary general meetings shall also be called by the Directors on the requisition of Members representing one-tenth of the total number of Members on the date of deposit of the requisition provided that, if the Directors do not call such a meeting within twenty one (21) days of the requisition, the requisitions may proceed to call the meeting themselves in accordance with the provisions of these Articles.

THE SEAL
Common Seal.
The Directors shall provide a common seal of the Exchange which shall not be affixed to any instrument except by the authority of a resolution of the Board or by a committee of Directors authorized in that behalf by the Directors, and two Directors or one Director and the Secretary of the Exchange shall sign every instrument to which the common seal is affixed.

Trading Market:
The most common way of buying/selling in stock market is through trading in the secondary market. Through a stockbroker you can buy shares from existing investors who wish to sell them and vice versa.

Lahore Stock Exchange What Happens Once You Are A Shareholder

There are several types of shareholders: some are long term investors who simply tuck away their investments for years while others trade frequently and keep a close eye on how their shares are performing. You can check your shares performance in various ways. A daily indicator of share price

movements is available in many newspapers and also on website of the relevant stock exchange. You may access this information directly or through your stock broker/advisor. Informative articles about many companies are regularly published in newspapers and investment magazines. Your stockbroker may also provide valuable information. Some publish newsletters for their clients, reflecting their views on the performance of selected companies. Annual reports of companies also contain useful information. Some companies have shareholder relations departments, which can help with factual information.

Core Values
1) 2) 3) 4) 5) Ethical Behavior Freedom through responsibility Good Governance Innovation and Enterprising Spirit Perseverance in Pursuit of Commitment

Lahore Stock Exchange Future Outlook

LSE would continue with its efforts to increase its trading volumes through increasing its outreach and collaboration with other exchanges in this regard. It would also continue to look after the interest of all its stakeholders including the investors, issuers and intermediaries as well as fulfill its role as the front-line regulator to make LSE as the exchange of choice for all the participants. A major challenge lying ahead for the exchange is its demutualization. This will have a major role to play in the overall reformation of the capital markets of Pakistan and through its successful implementation will enhance governance standards, transparency and ultimately investor s confidence. The Demutualization Committee and Management of the exchange through consultation with the SECP will be working tirelessly in its efforts to ensure a swift and timely transition. With LSE s voluntary adoption of the Code of Corporate Governance, its innovative strength in software development and enhancement of its geographical outreach, the new management team is well positioned to capitalize all the available opportunities with its distinct performance