A stock split is a corporate action where a company increases the total number of its outstanding shares by dividing existing shares into multiple new shares. While this increases the number of shares you own, it proportionally reduces the price per share, meaning the total market value of your investment remains unchanged immediately after the split.
For example, in a 2-for-1 stock split on the PSX, if you own 100 shares at PKR 50 each (total value PKR 5,000), you would then own 200 shares at PKR 25 each (total value PKR 5,000).
Companies typically conduct stock splits to:
Increase Liquidity: By lowering the per-share price, shares become more affordable and accessible to a broader range of investors, including retail participants, which can increase trading volume.
Improve Marketability: A lower share price can make the stock appear more attractive and less intimidating to potential investors.
It's important to note that a stock split does not change the fundamental value or market capitalization of the company; it's simply a change in the number of units that represent ownership.
Recent Stock Split Announcements/Actions at PSX
Company Name | Stock Split Ratio |
10-for-1 | |
5-for-1 | |
10-for-1 | |
5-for-1 | |
2-for-1 | |
5-for-1 | |
5-for-1 |