PAKISTAN STOCK EXCHANGE

 A stock exchange is a platform where stockbrokers and traders can buy and sell securities like stocks, bonds, and other financial instruments. It also facilitates the issue and redemption of these securities and capital events like income and dividend payments. Securities traded on a stock exchange include listed companies' stock, unit trusts, derivatives, pooled investment products, and bonds. Stock exchanges often function as "continuous auction" markets, with transactions conducted via open outcry at a central location or via an electronic trading platform.

To trade a security on a stock exchange, the security must be listed there. Modern markets use electronic communication networks for increased speed and reduced transaction costs. Trade on an exchange is restricted to members' brokers. However, electronic communication networks, alternative trading systems, and "dark pools" have taken much of the trading activity away from traditional stock exchanges in recent years.

Stock markets involve initial public offerings of stocks and bonds in the primary market, followed by trading in the secondary market. A stock exchange is a crucial component of a stock market, with supply and demand driven by various factors. Stocks can be traded off-exchange or over-the-counter, as is the case with derivatives and bonds. Stock exchanges are increasingly part of a global securities market, allowing for more efficient and transparent trading.

Stock exchanges provide liquidity to shareholders and facilitate efficient share disposal. However, the increased ease and speed of exchanging stocks on digital platforms have also led to increased market volatility.Companies with diverse owners tend to improve management standards and efficiency to meet shareholder demands and stricter rules imposed by public stock exchanges and the government. This can be attributed to the price mechanism through stock shares, which fluctuates when management is poor or good, making the firm less vulnerable to takeover. Publicly listed shares offer greater transparency, allowing investors to make informed decisions about purchases. Public companies, owned by shareholders who trade on public exchanges, are alleged to have better management records than privately held companies, which are often owned by founders, their families, or a small group of investors.

Corporate governance has been criticized for slippage in some public companies, particularly in accounting scandals. Examples include the dot-com bubble in the late 1990s and the subprime mortgage crisis in 2007-08. Companies like Pets.com, Enron, One.Tel, Sunbeam Products, Webvan, Adelphia Communications Corporation, MCI WorldCom, Parmalat, American International Group, Bear Stearns, Lehman Brothers, General Motors, and Satyam Computer Services have all faced media attention for their mismanagement. Securities identification numbers (ISIN) are used globally by banks and companies to uniquely identify securities. However, when poor financial, ethical, or managerial records become public, stock investors often lose money and the company loses value. Shareholders of underperforming firms are often penalized by significant share price decline and dismiss incompetent management teams.