TEXT: It has never been more important to save money than it is now. Saving money helps us to meet our expenses for emergencies, child(ren)’s education, big purchases, or accumulating wealth for future use. However, with costs of staples, daily items, utilities, fuel, transportation and other items rising on a frequent basis, everyone is caught in the web of inflation. Making ends meet and fulfilling one’s responsibilities towards home and family expenses has become a matter of deep concern for all. Inflation not only makes it very difficult for the common man to make ends meet but it also eats into our savings resulting in loss of value of money if kept aside and not invested. In such a scenario, it is important to make arrangements to tackle the inflation dragon and deal with it head-on. While there are several possibilities how one can do that, such as investing in bonds, National Savings Scheme, gold or other asset classes, the returns from investing in the stock market outweigh those from other asset classes. Investing in securities on the stock market for the long term can result in fruitful gains for the investor as passive investment has its own significant benefits.
While Pakistan’s macro-economic indicators are on the mend, more is needed to control the galloping inflation in the country which directly affects the standard of living of the nation. With inflation at 26% in 2023, whereas it was 11.9% in 2011, the value of Rs 100,000/- in 2011 is equivalent to Rs 34,867 as of 2023 and will be equal to Rs 12,157 in the next ten years if we use the average inflation of 10%. This is illustrated by the graph below:
Keeping the above factors in mind, it is important to earn additional income in order to beat inflation and make ends meet. While getting a second job or starting a new business may not be for everyone, for most middle class consumers it is an uphill task to meet the rising costs of living. In such a scenario, the stock market may well prove to be the proverbial knight in shining armour and save the day.
To invest in the stock market, the first step is to open an account. For those members of the public who are pressed for time or find the account opening process cumbersome, the Sahulat Account is the ideal solution to their quest of opening an account to invest on the stock market. Even for those members of the public who do not have salaried income, who are students, housewives, novice investors or others who cannot fulfil stringent account opening requirements, the Sahulat Account is the optimal solution. All licensed Securities Brokers are offering the Sahulat Account facility. This facility was initially introduced in 2016 to facilitate small to medium range individual investors. Until recently, the limit to invest in the said account was Rs 800,000/- which has now been revised upwards to Rs 1 million.
The Sahulat Account presents a simplified account opening process which involves filling out a simple account opening form which contains details requested such as the name, address, income details, bank details etc. Precise and convenient KYC requirements are included for the retail investor. Moreover, only basic identification documentation such as the CNIC is required to fulfil the documentation requirement of the account.
Some of the key features of this account is that only an individual investor is entitled to open and maintain one Sahulat Account with his/ her selected Securities Broker as a single account and not as a joint account. In Sahulat Account, buying and selling is allowed only in Ready Delivery Contract Market. Sahulat Account can be converted to a normal trading account anytime the account holder wants. An individual investor who already has a normal trading account, by undergoing full KYC with a Securities Broker, will not be allowed to open Sahulat Account.
More information on the Sahulat Account is available at the following web-page:
https://www.psx.com.pk/psx/resources-and-tools/investors/sahulat-account
Pakistan Stock Exchange, as a frontline regulator, is committed to make investment on the stock market a convenient process for all, specially the retail investors. The Sahulat Account facility has been introduced to facilitate new customers who fall in the low-risk category. This account keeps the interest of the retail investor at the forefront while making the account holder’s entry in the market a simple process.
Disclaimer:
The contents of this article comprising of information pertaining to financial products, including but not limited to securities, derivatives products, listed companies or companies proposed to be listed on PSX and any content of third parties are strictly of a general nature and are provided for informative and educational purposes only. Such content/ information is not intended to provide trading or investment advice of any form or kind and shall not under any circumstances be construed as providing any recommendation, opinion or indication by PSX as to the merits of the said product, security or company and also not be interpreted as comprehensive and interpretive of all applicable regulatory provisions.
Raeda Latif
Copyright Business Recorder, 2023