Investor transactions: PSX transitions to ‘One-Share Marketable Lot’ system

KARACHI: Pakistan Stock Exchange (PSX) has successfully transitioned to a One-Share Lot system for investor transactions on the regular market, aligning with international best practices for stock market investments.

Previously, the minimum marketable lot sizes for listed companies varied from 20, 50, 100, and 500 shares based on their prices. To enhance investor convenience and streamline stock market transactions, this change has been enacted. PSX as a frontline regulator is committed to add value to its customer experience and facilitate investors and stakeholders.

The transition to the One-Share Lot began on April 19, 2024, and was executed in multiple phases on a weekly basis, to ensure a smooth and efficient transition. The conversion was based on a comprehensive evaluation conducted by the Exchange.

Pakistani companies with market cap of over $1bn at PSX

The new lot size is expected to offer numerous benefits to investors, facilitating seamless, systematic, and efficient transactions in the capital market. Key advantages of the One-Share Lot include increased retail participation, as the smaller standard lot size makes high-priced stocks more affordable for retail investors, resulting in higher liquidity and improved trading volumes. Additionally, this change allows investors to build more balanced portfolios, as those with limited capital can now afford a wider range of stocks.

The new lot size also eliminates the need for investors to trade in odd lot markets at a discount, promoting accessibility. Furthermore, it simplifies operations for investors and securities brokers by removing the need to track multiple lot sizes, thus reducing administrative and operational burdens.

Farrukh H. Khan, MD and CEO of PSX, expressed his satisfaction with the transition, stating this is a significant step forward for Pakistan Stock Exchange, particularly benefitting small investors.

He said the shift to a One-Share Lot aligns with international best practices and moves PSX closer to global standards where trading units consist of one share per lot, enhancing market compatibility, competitiveness, and accessibility. From larger scale achievements like promoting ESG, bringing forth products like ETFs, PRIDE and investor education web-app like My Portfolio, to transaction level improvements such as One-Share Lot trading facility, PSX is right at the forefront to enhance and improve the customer experience.

He thanked the SECP for their support and congratulated all stakeholders and market participants, specially the small investors of the Stock Exchange for this beneficial development of One-Share Lot trading facility.

Copyright Business Recorder, 2024