Glossary · Investing Basics
Ordinary Shares
The most common form of share capital, entitling holders to proportional ownership of a company. Ordinary shareholders may receive dividends, subject to profitability and directors' recommendations, and typically retain voting rights.
01—What is Ordinary Shares?
The definition — and what it means in practice.
Ordinary shares are the standard form of a company’s share capital. Each ordinary share represents proportional ownership in the business, so holders share in profits and losses through the share price and, when declared, dividends. Ordinary shareholders typically have voting rights on key matters such as directors and major corporate decisions. Dividends on ordinary shares are not fixed and depend on profitability and the board’s recommendation.
definition matters because most PSX-listed equity investments are ordinary shares, so they are the main way retail investors participate in a company’s growth. Your potential return comes from price changes and any cash dividends or other equity corporate actions. Voting rights also matter in practice: they are exercised through the company’s annual general meeting and can influence governance, even if small shareholders’ votes are individually limited.
If a company has 1,000 ordinary shares and you own 10, you own 1% of it and can receive dividends if declared and vote on shareholder matters.
- Ordinary shares are the most common equity instrument and represent proportional ownership.
- Dividends are variable: they are paid only if profits allow and the directors recommend them.
- Ordinary shares usually carry voting rights on major company decisions.
- Returns can come from share-price movement and corporate actions, not dividends alone.
- Ordinary shareholders are not paid a fixed amount like many preference shares.
02—How ordinary shares works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the Pakistan Stock Exchange (PSX), retail investors most often buy and sell ordinary shares of listed companies. Shares are held electronically at the Central Depository Company (CDC), and trades clear through NCCPL. After you trade, settlement is T+1 (one business day), meaning delivery of shares and funds happens the next business day under the market’s settlement process.
Dividends on PSX-listed ordinary shares are commonly discussed using face value. Most listed shares have a Rs 10 face value, and companies declare dividends as a percentage of that face value (for example, a “100%” dividend equals Rs 10 per share). Cash dividends are subject to withholding tax: 15% for income-tax filers and 30% for non-filers.
In day-to-day trading, ordinary shares are quoted and traded in board lots (typically 100 shares) and are subject to daily price limits for most equities: ±10% or Re 1 around the previous close (LDCP), whichever is higher. A PSX investor encounters ordinary shares through corporate announcements (such as dividends or rights issues) and trading sessions that include a pre-open period followed by continuous trading on business days.
03—Common misconceptions
Where investors most often get this wrong.
Ordinary shares always pay a dividend every year.
Dividends on ordinary shares are not guaranteed. They depend on profitability and the board’s recommendation, and a company may reduce, skip, or reinstate dividends.
A “100% dividend” means I doubled my money.
On many PSX shares, dividends are stated as a percentage of face value. With a Rs 10 face value, “100%” typically means Rs 10 per share before withholding tax, not a 100% return.
Voting rights mean small investors control company decisions.
Ordinary shareholders usually have voting rights, but influence depends on how many shares you hold and how votes are organised at shareholder meetings.
04—Using ordinary shares on BSL
Where this term shows up across the platform — with live data.
- Compare listed ordinary shares by sector using the Sectors view.
- Filter for companies with dividend history using the Highest Dividend Yield list.
- Track benchmark movements that many ordinary shares influence via the KSE-100 Index page.
- Read related concepts like dividends and voting on the Glossary page.
05—Frequently asked questions
What investors ask about ordinary shares on the PSX.
Frequently Asked Questions
In most cases, when investors refer to “equities” on the PSX they are referring to ordinary shares. They represent ownership in a listed company and usually come with voting rights and variable dividends, if declared.
Many listed companies in Pakistan declare dividends as a percentage of face value. Since most listed shares have a Rs 10 face value, a “100%” cash dividend typically corresponds to Rs 10 per share before withholding tax.
No. Ordinary shares do not have fixed returns. The share price can rise or fall, and dividends are paid only when the company is profitable and the board recommends a payout.
Cash dividends are subject to withholding tax in Pakistan. The rate is 15% for income-tax filers and 30% for non-filers, deducted at source when the dividend is paid.
PSX trades settle on a T+1 basis, meaning settlement occurs one business day after the trade. Shares are held electronically at the CDC, and clearing is done through NCCPL.
06—Related terms
Keep building the picture.
A class of shares that rank above ordinary shares in terms of dividend payments and asset distribution in the event of liquidation. Preference shareholders typically receive a fixed dividend regardless of the company's performance, but generally do not have voting rights.
A direct payment made by a company to its shareholders, usually from profits, expressed as a rupee amount per share. Subject to withholding tax in Pakistan.
A portion of a company's profits distributed to shareholders. Can be in the form of cash, bonus shares, or a combination of both.
A yearly meeting held by a listed company where shareholders receive financial updates, vote on key decisions, and elect or re-elect board directors. Pakistani listed companies are required to hold AGMs under the Companies Act 2017.
An offer by a listed company to existing shareholders to purchase additional shares at a discounted price, in proportion to their current holdings. Used to raise new capital.
Additional shares issued to existing shareholders free of charge, in proportion to their current holdings. A company may issue bonus shares instead of or alongside a cash dividend.
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