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Internship Report

(2009)

Completed Internship at

Islamabad Stock Exchange (ISE)

Internship report submission for the Final Evaluation in


Partial Fulfillment of the requirements for the Degree of

Master Business Administration

It is certified that, the internship report and the work contained in it conforms to all the
standards set by the institute for the evaluation of any such work.

1. ____________________________________
(Sir, Kashif Sayed)

2. ____________________________________
(Madam, Bushra Nasreen)

3. ____________________________________
(Madam, Sidra Shahzadi)

4. ____________________________________
(Sir, Ammar)

University Institute of Management Sciences

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University of Arid Agriculture, Rawalpindi.
(2009)

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“START WITH THE NAME OF ALLAH

THE MOST MERCIFUL THE MOST BENEFICIAL”

Dedication

I dedicate this report to my parents, teachers and all the dedicated staff of
Islamabad Stock Exchange.

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Acknowledgement

I am thankful to almighty Allah who gives me courage to complete my


internship in Islamabad Stock Exchange and completions of report this report
for such purpose.

I would like to appreciate my supervisor Mr. Kamarn Anwar, for his proper
guidance and transferring knowledge to me.

I am also thankful to Muhammad Waris Niazi who allowed me for internship


at such tremendous place.

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Table of Contents

Sr. No. DESCRIPTION PAGE NO.


1. Executive Summary 06
2. Background of Stock Exchange 07
 What is the Stock Exchange 07
 Role of Stock Exchange 07
3. Stock Exchange in Pakistan 08
4. History of Islamabad Stock Exchange 08
 Mission Statement 10
 Vision Statement 10
 Core Values 10
5. Brief Information about Islamabad Stock Exchange 11
6. Regulation Authorities of Islamabad Stock Exchange 11
 ISE a Regional Stock Exchange 11
7. The Objectives of Islamabad Stock Exchange 12
8. The Timing of Trading in ISE 13
 Management Timing in ISE 13
9. Business Operation 14
10. Board of directors 15
11. Hierarchy Level 16
12. Performance Evaluation 21
13. Islamabad Stock Exchange Index 22
14. PEST Analysis 28
15. Work Description 30
16. Personal Achievements 31
17. Suggestion & Recommendation 32
18. Implementation 34
19. Bibliography 36
20. Appendices 37

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Executive Summary

This project will cover the complete knowledge about the main working of stock

exchange. Financial markets first came to prominence during the 17th century at the start

of the industrial revolution. The first financial markets came about in London.

This project will discuss about Islamabad Stock Exchange and also discuss the Current

situations of ISE Now a days stock market plays an important role in economic

development the main function of stock exchanges is to promote tile movement of capital

across the Region, to increase investment opportunities and encourage optimum financing

for firms irrespective of where the entity resides. The trading and settlement system of

stock exchange is very efficiently and done by National Clearing Company of Pakistan

Limited. Brokers are involved in buying and selling of shares. Stockbrokers are

individual’s link to tile stock market which provides you a facility to buy share at

available price.

It also describes the main terms that use in stock market. The methodology that how an

investor can invest in stock exchange to make its investment profitable and things to

consider before making a investment. This project will describe the working of the stock

exchange and will mainly emphasize on the guidelines for investors for trading in stock

exchange. It also features about Investors education. What impact a stock exchange could

create in tile economy, and in last it describes Stock market an Islamic prospective.

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Background of Stock Exchange

At the time of the industrial revolution there were few investors capable of supporting

business on the vast scale it required. The financial markets arose as a result of several

small investors joining forces to present a unified approach towards major investments in

industry.

Financial markets today, exist as a medium for processing financial transactions. The most

common form of financial trading is usually done on stock exchanges in the form of share

dealing. Businesses generate extra investment capital by releasing shares onto the stock

exchanges. Whilst investors in shares make money by selling shares for a higher value

than they are purchased for.

The majority of financial markets are based in the financial capitals of the world such as

the London, New York and Tokyo Stock Exchanges. Although the emergence of the

internet has seen a rise in the number internet stock exchanges such as NASDAQ, as well

as several on-line stockbrokers.

What is the Stock Exchange?

 The stock exchange provides a market place where shares can be bought and sold.

Role of Stock Exchange

 The stock exchange admits companies for trading at their securities.

 It provides a market for raising capital by companies.

 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.

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 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.

1. Karachi Stock Exchange (Guarantee) Ltd. (1947)

2. Lahore Stock Exchange (Guarantee) Ltd. (1971)

3. Islamabad Stock Exchange (Guarantee) Ltd. (1989)

 Karachi Stock Exchange is the biggest exchange in the country.

Islamabad Stock Exchange

Islamabad Stock Exchange is situated in blue area main trading zone of Islamabad.

History of Islamabad Stock Exchange

The Islamabad Stock Exchange (ISE) was incorporated as a guarantee limited Company

on 25th October, 1989 fully operational on August 10, 1992 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 flair and orderly market place

that ranks with the best in the world. The purpose for establishment of the stock exchange

in Islamabad was to cater to the needs of less developed areas of the northern part of

Pakistan.

Tile 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 conducive environment to canalize the small investments of

the residents of less developed areas. The ISE offers in easy access to both domestic as

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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. Tile

Exchange is playing a pivotal role for economic growth of the area thereby contributing

towards the overall economic prosperity and welfare of the Country.

At present there are 118 members out of which 104 are corporate bodies including

Commercial and investment banks, DFI's and brokerage houses. The other 18 Members

are individual persons who are well educated, enterprising and progressive minded The

Board of Directors governs the affairs of Exchange. The Board of Directors consists of tell

directors, of which five arc elected member directors and four arc non-member directors

nominated by the SECP while the managing director by virtue 01' his office is tile 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 tile

outcry system in 1997. Now all the listed securities are traded through the ISECTS. Tile

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.

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Mission Statement

“To create value for our investors and listed companies through dynamic market

operations, fair and transparent business practices and effective management."

Vision Statement

"To be the pre-eminent stock market in Pakistan and achieve market recognition both in

terms of quality and delivery of our services."

Core Values

We aim to be an organization that is founded on:-

Highest standards of commercial honour and integrity. Just and equitable principles of

trade and business.

We shall work to:-

Regulate our market in accordance with international best practices.

Settle and decide points of dispute arising out of investors' complaints.

We have confidence in our ability to:-

Lead through the strengths of our commitments and willingness to excel.

Continuously respond to the changing needs of internal and external environments.

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Brief Information about Islamabad Stock Exchange

 Numbers of Listed Company

There are 690 companies are in ISE in which 300 companies arc active and 390

companies arc non-active.

 Numbers of Listed Brokers

There are 114 brokers are listed in which 40 arc active right now.

Regulation Authorities of Islamabad Stock Exchange

There are three regulating bodies of Islamabad stock exchange (ISE):-

First is the Securities and Exchange Commission of Pakistan (SECP) which is responsible

for maintained regulations for securities and other matters related to companies. The other

regulating body is corporate law authority, which has been merged in SECP, is responsible

for law and order, which is implemented for stock exchange. The third body, which is the

supreme, is the Ministry of Finance who sent instruction from time to time three

exchanges including corporate law authority and SECP.

Islamabad Stock Exchange a Regional Stock Exchange

An Islamabad stock exchange / market were seen as an essential part of surface deepening

and widening of the integration process.

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The Objectives of Islamabad Stock Exchange

The objectives of the Islamabad stock exchange have been identified as:

 To promote the movement of capital across the Region

 To increase investment opportunities;

 To encourage optimum financing for firms irrespective of where the entity resides.

 To increase the attractiveness of the Region as an area for investment, both by

regional and non-regional investors.

Who Can Invest On The Islamabad Stock Exchange?

Anyone can invest in Islamabad stock exchange, be they nationals or foreign investors.

They can access the market by contacting their stockbroker who will act on their behalf.

Trading the Islamabad stock exchange is effected by a correspondent broker in the host

country who acts as agent for the client broker in the home market the home broker is

located in the country where the order originated, while the host broker is located in the

country where the trade is executed. There is no income qualification required for

participating in the market

Many people would like to invest in the stock market to try and improve their financial

fortunes. In recent years, a number of average people have made a lot of money by

investing in the stock market There are a number of mythology that work to keep

newcomers from the market, Such as the belief that investing in stocks is an extremely

risky business, or that you have to be rich and well educated to invest in stock and bonds.

Another myth about the stock market is that "Ali investor can become rich overnight".

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The Timing of Trading in Islamabad Stock Exchange

Friday is 9.30 A.M. to 12.00 P.M. & 2.30 P.M. to 4.00 P.M.

For Normal day it is 9.30 A.M. to 2.30 P.M

Management Timing in ISE

 The management timings are 9.30 A.M. to 6.00 P.M.


 The exchange remained closed on Saturday and Sunday in a week.

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Business Operation

• The Organizational Structure

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Board of directors

The board of director comprises the 10 directors, 1 chairman of stock exchange. The 6

directors in ISE board are belonging to SECP and five are elected from the exchange in

annual general meeting.

Committees

There are number of standing committees for efficient functions of management in ISE:-

 Research and Development Committee.


 Information Technology Committee.
 Seminars, Training & Publication.
 Floor & Mediation Committee.
 SECP Coordination, Rules & Regulation Committee.
 Taxation Committee.
 Employment, Administration & Finance Committee.
 Membership Committee.
 Companies Affairs, Listing & Active Participation Committee.
 Default Management Committee.
 Inter Stock Exchange Committee.
 New Building Committee.
 Arbitration Committee.
 Building Maintenance Committee.

The committees above mentioned perform an important role in different matters existing

in exchange. Each committee contains various members including one Chairman of

committee. The articles of association decide the following provisions regarding to the

committees.

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Other Committees

The director may from time to time and at any time constitute a committee consisting of

two or more persons, whether director or members, as they think fit, to undertake any

function and responsibilities entrusted to it/them by the directors. Any committee so

formed shall, in the exercise of the power so delegated, conform to any restriction that

may be imposed on it by the directors.

Proceeding of Committee Members

“A committee may meet and adjourn, as it thinks proper. Questions arising at any meeting

shall be determined by a majority of votes of the members present. In case of an equality

of votes, the convener shall have and exercise a second or casting vote.” (Memorandum

and Article of association).

Hierarchy Level

There are different hierarchy levels in ISE. For officer the levels start from associate

manager to M.D. and chairman of the exchange. The tier of hierarchy is following:-

 Chairman.
 Managing Director.
 Directors.
 Secretary.
 General Manager.
 Senior Executive Secretary.
 Associate Managers.
 Staff.(Annexure)

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Hierarchy Responsibilities

The responsibilities of different positions are assessed on the bases of qualification,

authority and experience.

Chairman

The chairman is elected in the meeting of directors with subjects to limit for one year. In

case of other person is not ready to elect as a chairman he will eligible to reelection. The

chairman can hold this position for consecutive three years under this condition. For next

time he will eligible after a year for election. The chairmen holds office and observe that

all function are going according will on the behalf of directors. The chairman is liable to

perform the following main functions:-

 To observe the policies of management and whole functions of exchange


for the better interest of members and directors.
 To approval of any document which is sent by managing director (M.D.)
without any objection.
 If on any complex matter regarding to policymaking he understand that the
meeting should call than he should call the meeting.
 To preside all meeting of exchange.

Managing Director(M.D.)

The managing director is responsible for the whole function of exchange. He liable for the

functions of staff to the Chairman. The board does the appointment of M.D. for the period

of three years. The person who is elected as a M.D. is restricted to hold any other business

or activity of trading in stock exchange. He is an independent person in exchange and full

time paid employee of exchange. He is liable for following right and duties:-

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 To sustain the routine matters regarding to exchange.
 He can perform all functions for the betterment of management.
 He can arrange the training of the staff according to requirement.
 He responsible to provide the information to director on demand from
them.
 He can give the summary regarding to policies of exchange in different
matters.
 He is responsible to maintain the accounts up to date and present in
meeting on the behalf of management.

Directors

The director is elected in election trough the election. The board of directors has power to

give the approval for any borrowing for the purpose of future growth of exchange. The

director has right to inspect the accounts of exchange at any time. The directors has

following rights and liabilities:-

 The directors in the meeting of the board can give approval of loan whether
in the form of bonds, TFC’s or any other security.
 The can inspect the accounts of exchange at any time.
 They can give their opinion regarding to any matter in board meeting.
 Any resolution cannot be approve without the prior approval of directors.
 They can give approval regarding to any investment for exchange in future.

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Secretary

The secretary is senior officer of stock exchange. He is head of secretariat and responsible

to general management. He is also obligated for work, which is assigned to him from

Chairman and Managing director. The main functions of secretary are:-

 He possess the common seal of exchange and responsible for it.


 He has authority to verify the expenses before sending the minute sheet to
Managing director
 For annual general meeting he issues the notice to members.
 On the instruction of chairman he is responsible to call the meeting board
and to inform the members.
 He can perform the functions regarding to director finance.
 He responsible to attend the meeting the board of directors.
 He arranges the training and rehabilitation.
 He is responsible completion of any formality regarding to authorities e.g.
SECP, Ministry of Finance.

General Manager

The general manager is responsible for all functions for all matters regarding to different

departments, which are working under him. He performs the following functions:-

 He provides the consultancy service to departments.


 He performs the daily matters regarding to general management.
 He is responsible for any function regarding to any department on behalf of
associate manager of department.
 He remained contact with SECP and other exchanges for information.
 He can make any decision regarding to fine and delisting of any company
with the consultation of Secretary and Managing director

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Senior Executive Secretary

Senior executive secretary performs her part of duties for Chairman and Managing

director. He performs the following main functions:-

 To note all telephone messages of Chairman and Managing director.


 To handle all incoming and outgoing faxes.
 Arrange hotel booking of chairman/ Managing director & Executives of
ISE.
 Arrange all appointments of Chairman and Managing director.
 To check all mail of Chairman and Managing director.
 Maintain all personal and official files of Chairman and Managing director.
 Work as a telephone operator for chairman and Managing director.

Associate Manager

Associate manager head of his department. He works according to instructions of general

manager and secretary. The associate manager sent summary on different matter regarding

his department to above management.

 He is responsible for functions of his department.


 He sent the report to Managing director with the advisory of general
manager.
 He is chargeable if any thing due or any regulation exists regarding to law
related to his department.

Staff

The staff performs various functions, which are assigned to him. The staff is not directly
responsible to all functions but on behalf of associate mangers.

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Performance Evaluation

The performance of an employee is evaluated on the basis of every six months. The

performance is evaluated with the help of performance evaluation committee. The letters

are sent to employee for purpose of acknowledgement from secretary on the behalf of

committee.

Salary and Packages

The level of salary is very low in ISE as compared to other business. On the time of

offering for first joining it start from Rs.9000. There is no other reward for employees of

ISE on excellent performance. However the exchange pays fee of employee’s children

who are not more than two in numbers.

Behavior of Employees

The behavior of employees including top management vary from person to person, at

average it is good. The main problem in the way of employee is the time availability from

work, despite the problems they coordinate to each other.

Culture

The employees belong to different areas of the country, so ISE is the multiculter

organization.

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Language

Most of the communication is done in Urdu but the official language, which is used in

correspondence, is English

Dress

All officers are bound to wear paint shirts with ties by secretary of exchange. As far as

concern with lower management they have option in dress.

Unity

Within organization all employees are considered like a part of family.

Islamabad Stock Exchange Index

The index used by Karachi Stock Exchange (KSE) is called 100 index, where the Lahore

Stock Exchange (LSE) uses the 101 index. The index is maintained in KSE by sector wise.

The index, which is used by Islamabad Stock Exchange (ISE) the different from KSE and

LSE.

The index of ISE is the composite index. It was developed by Vital Information Services

(Pvt.) Limited, a financial and data base company:-

How contract?

It is constructed in following way:-

Suppose:-

Base Date = 30th November 1996.

Date of Publication = 1st March, 1996

Total companies 260

Multiple or Base figure 10,000

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Let there are three prices or scrip’s A, B, C

A= 10

B=15

C=20

By Calculating the G.M.

G.M. = Antilog {log (10) +log (15) +log (20)}/3

= Antilog (1.15)

= 13.48

Let t which is time changed than,

A=12

B=17

C=25

Than

G.M. = Antilog {log (12) + log (17) +log (25)}/3

= Antilog (1.233) = 17.10

Index =17.10/13.48 (10,000)

= 12,685.45

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Terms used in Stock Exchanges

Share

It is certificate of ownership in a company in which the investor made the investment. The
shares are issued to the owner who purchases the shares from the stock market. Shares are
issued usually by the companies in lots of different sizes. The common lot in the market is
500. Shares have two types:-
i. Preferred Shares ( Their dividend is payable before the common shares they
don’t have any right for vote )
ii. Common Shares ( Their dividend is payable after the preferred share holder but
they have vote right ).

Bull

Bull is a trend when the prices of most of the companies shares rise up. Market usually
goes to bull when demand of shares is more than the supply of shares.

Bear

Bear is reciprocal of bull in which the market falls down and the prices of majority of
companies go down. In bear the supply of share is more than the demand of shares.

Capital Gain

It is the situation when the prices of shares are gone to up than the value at which the
investor buys the shares. There are many reasons for such higher in market. These include
reasons may be political, economical, the performance of the company or any other in the
market.

Badla or Carry over Trade

It the form of trade in which the individual or any institution provides the loan on short
term usually for one day. The Badla rate is high than the market rate. The variation in
badla rates can negatively or positively effect in market situation.

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Blue Chips

Blue chips are those companies in which the maximum trade is done in a day. The
investors done maximum trade in these companies with the expectation of maximum
profit. The volume of these companies is high than other companies in the market. The
other thing is that blue chips companies are the best performer in the market. The shares of
such companies is easily available. In these days PTCL, HUBCO ,PSO, FFCC Jordan are
the blue chips.

Dividend

It is the part of profit which is given to the owner of share. A part of profit is distributed
among the shareholders.

Ordinary Shares

The most common from of shares and these shares are issued by maximum companies.
The dividend is depending on profitability of the company and recommendation of
directors.

Preferred Shares

In this type of share the profit is given to the shareholder at fixed rate. If the company
earns more profit than the shareholder cannot contribute in profit, in the case of loss he
feels comfort because the earning of share is remained secure. In Pakistan the preferred
share.

Initial Public Offering (IPO)

When a company first time launches its shares in the market to general public for sale is
called initial public offering (IPO).

Private Placement or Inside Trading

In the type of trading the purchase or sale is made by a person who has inside information
about the company which is not generally available in the market. In Pakistan such deal is
illegal.

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Long Position

The share is purchased with intention that in future the price of shares will go up. After
observing their suitable position he sale these shares in the market and earn profit.

Short Position

In this type of trading the investor purchase the share s of the company with intention that
he sale after some time when the price of shares will go up. When the sale is made than
after he purchase again when the price go down. The earning is made time to time from
such sale. This type of trading is called short position.

Portfolio

When the investor purchases the shares of different companies to reduce the risk from the
market the whole collection is called portfolio.

Capital Gain

This is the appreciation on the price of shares, which exist in future. When the shares are
bought by the investors after a some period the price of such share rise up due to excellent
performance of company or any other reason, the investor can earn profit by selling it in
the market this is called capital gain.

Capital gain = Market prices of shares - Price at which the shares purchased

Investment Corporation of Pakistan (ICP)

The Investment Corporation of Pakistan is a body, which invest in different companies


and make portfolio of it. On the behalf of such investment it issue units, which are called
ICP units. Through purchase of such units the investor relaxes due to less tension, it is
because he is not involved in trading process.

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Right Issue

When a company wants to issue more shares in the market, it is a choice for the company
that it offers shares first to existing shareholders. By using this option of right issue
ownership will remain to existing shareholder and do not divided to other people. If the
existing shareholder do not take interest in buying new shares than after some days the
right is transferred to general public.

Settlement
There are two types of settlements:-

(a) T+1
Under T+1 system the transaction is made on spot within day.

(b) T+3
In this system the transaction is made first day and clearance is made on third day.

Term Finance Certificates (TFC’s)

The term finance certificates are resembles to bonds, which are issued by companies for
aim to generate the funds from general public. When the investor purchase TFC’s the
receive interest from the companies.

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SWOT Analysis for stock exchange is not available. So another analysis I.e.,

PEST Analysis is done to give a general view about Islamabad stock exchange.

PEST Analysis

In PEST analysis were made in the following by observing the political, economic, social

and technological conditions of the country. This type of analysis made a overview on

stock exchange.

 Political

The political have following flucactions in the country,

 The political system gone to positive direction after the election in the

country, there is need to pure democracy in the country to enhance the

process of investment.

 Due to Sep.11, 2002. The foreign exchange reserve increases more than 10

billion. The increase was possible due to the sending the amount by people

in Pakistan.

 Economical

 The economy may increase due to positive economic indicators and

improvement investment in the country.

 The reducing the interest rate in country on deposits will help to attract

more investors.

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 Social

 The conditions of social problem exist due to lack of education, unawareness about

the stock exchanges and risk of investment in market.

 The social system of combine family and other problems, in future the condition

due to literacy improvement the dilemma may be control up to a level.

 Technological

 After the implementation of WTO the only best performer companies who have

some edge can survive. So the lack of technology can be harmful for companies.

 In future dynamic technology in the world, which changes in every moment of life

required complete attention.

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Work Description

Future Prospective of Islamabad Stock Exchange


There are many prospective of ISE towards the growth and development for transparency
in functions.

National Level Stock Exchange

In future the ISE including other two exchanges will merge in one stock exchange and it
will be National level stock exchange in Pakistan. For this purpose the land is acquired in
near the Saudi Pak Tower Plot NO. 3035, Jinnah Avenue F-7 Islamabad. The alti amtium
is given for 18 months to contractors.

Central Depositary Company (CDC)

The exchange implementing a plan with the help of SECP in which every company will
bound to get membership of Central depositary company (CDC) before August 31,2003.
This will help of transparency in functions and increase the efficiency in market.

Web Site Developments

In future the ISE is determinate to make web site upto date with reforms. If the new
requirement is assessed the management of exchange include it for investors. For
accomplishment of this purpose the meeting on web site called after time to time.

Library Establishment

There is planning to establish the new library in ISE for purpose to facilitate the investors
and the general public for awareness.

Investor information center

The exchange is establishing which will has the facility to accommodate about 100 people
at a time; the center will start it functions soon.

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Personal Special Achievements
During the internship, the skill on various development archived .The special
achievements that are remarkable, they are following:-

1. Idea about ISE internal works and its different department.


2. I also spent many time on the SAFE (South Asian Federation Department), which
work is to connect the various Asian exchanges with each other.
3. I also visit the accounts department of stock exchange where the Cheques are
submitted and vouchers are maintained.
4. I also deposit the Cheques of stock exchanges account holder (the brokers, the various
businessmen). They have account, where stock exchange deducts the commission and
other electricity, gas, and other rental expenses are charges, their worker come and
submitted the checks and take the receipts of submission.
5. I deposit these Cheques in the PICIC Bank and MCB Bank. Which are situated on the
ground floor of ISE.
6. I went to the IT department where the IT handles the whole ISE systems operations.
7. I also sent faxes, E-mails (as an internee account which is maintained by stock
exchange) to the Dhaka, Bangladesh and other Asian exchanges. Where it’s a work of
SAFE to communicate with other exchanges.

8. I also take the information that stock exchange has 2 floors, which are on the rent
bases. The ISE pay’s the rent of floors, soon the new building will be completed the
ISE will be shifted to that place. That building is completely with ISE name and ISE
sells its various floors to the brokers and trading communities. The ISE tower is
located on the On the East side there is Saudi Pak Tower and on the west side its
Centaurus (Under Construction).
9. Learn through working and observation in ISE. I am able to understand the gap
between theory and practical.

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10.
Suggestions and Recommendations

• There are some recommendations to ISE for betterment in future. These are, The

member ship fee should below the current rate which is Rs.7500,000. In the case of

low fee more members will apply in ISE and this will generate more revenue for

exchange.

• The management and members should start the program on T.V. and Radio as

soon as possible especially in these days when the liquidity in the economy at peak

level. Through such program awareness of general public will increase towards the

stock exchange and they will prepare themselves for investment in market.

• There should own software development for ISE. For this purpose the management

should develop own department of IT at a level.

• The management of exchange should maintain the accounts of exchange more than

three scheduled banks. In the case of failure of any bank the investor or brokers

will disturb at minim level.

• To attract more investors it will better for management to launch on web site the

main functions, which dominate the ISE from other exchanges of the country.

• The department of companies’ affairs can perform this work easily. The other

aspect the cost of maintenance of web site which needs a special, so there is

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recommendation by ISE management is already under consideration to hire an

expert for such purpose.

• With the help of SECP the ISE should give the proposal for fixing special charges

for below the standard exposure and there should also limit for maximum

exposure. This will bring in equality among the members, helpful to protect the

weak members, activity in trading, interest of members will entact and clients or

investor will diversify to other members.

• ISE management can send the comprehensive proposal summary.

• Human resource development techniques should implement consistency. For such

purpose the number of workshops and seminars should held in a year.

• The faculty members of nearest university can be called to give their services as

the convener of seminars and workshops.

• The amount from Member Protection Fund (MPF) should increase from

Rs10,00,000. It will provide support to member in crises, he will in position to

meet financial challenges. The limit can be increase, it is because higher the

trading activities higher the risk and at the same time higher the Laga will be

collected. So in these days the activities related to trade is at peak level, the fund

can be made.

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• The overcome the salary problem and for purpose of motivation in employees over

time should be given for extra work.

Implementation

• The maximum work can be taken. In initial stage the motivation reward should less

costly but after success it can be increased. The other method of award to give

shields at the end of year on best performance of employees. Such awards increase

competition among employees. Under this condition cost vs benefits would be

great.

• The at least one person who provide the guide to the new investors about the

exchange and the process of investment on reception. More ever the investor book

let developed by ISE should more easy to guide the investor about the exchange.

• There should also best award for members on excellent performance.

• There should policy for expenses to give a general view about the limit of expense

when an employee is gone outside.

• There is need to develop the criteria about the best performance of companies

regarding to stock exchange. By this way the companies will encourage for best

declosement of formality according to rules of exchange.

• There should aid to fulfill the vacant vacancies in newspapers. It will help to select

the competitive person for ISE, who may helpful for future in ISE.

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Conclusion

The overall management of ISE is better performing but in some areas there is need to

improve for further improvement in future. All employees are hard worker and loyal to

their organization.

The economic indicators in the economy show a good trend in 2002-2003. This will

provide an opportunity the management of stock exchange to avail maximum

opportunities through policies that will help to grow in future.

The turnover for chairman seat is for short span of time, which is for 1 year. This will not

provide in policymaking experience. The decision by SECP to reduce board of directors

will help to take the quick decision.

The management of ISE is too much dependent on KSE. If the KSE is going on peak than

ISE will also fallow it, in case of down the index of KSE the ISE will also go down. The

transparency in functions is very good sign for ISE whole management. Moreover the

coordination in work and continuous struggle to bring change can help to show more

progress.

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