ABDUL

Supervised
HASEEBby:KHAN
(Reg.
SIRNo.
RIAZ
BB-3-05-2871)
AHMED

UMAIR AHMED KHAN (3502)

ABDUL HASEEB KHAN(2871)
S. KANWAL ZEHRA (3629)

Supervised by “ SIR SHAHNAWAZ ”

Banking and Financial Instruments

Financial
Instruments
 SIGNIFICANCE OF THE
STUDY :

üWhat is investment??????????

üInvestment is:
‘The act of committing money or capital to
an endeavor with the expectation of obtaining an
additional income or profit.’

üThe present financial market is flooded with a lot of

investment instruments.
ü
ü
üEach of these vehicles has its own positives and
negatives
ü
üThe ultimate decision of investment is influenced by
the individual’s perception regarding the risk and return
 OBJECTIVES OF “ INVESTMENT”:

The following are some of the objectives of the investor:

1. growth of capital
2.
3. retirement planning
4.
5. balance out inflation
6.
7. safety
ANALYSIS OF
INSTRUMENTS
 Types of Investments

i.Gold
ii.
iii.Equity market
iv.
v.Real Estate
vi.
vii.Forex
viii.
ix.Mutual funds
x.
xi.Bond
xii.
xiii.Fixed deposits
xiv.
xv.Insurance
 GOLD

Gold is an asset class that’s associated with safety.

Its being used for adornment purpose.

It has also served as an asset of the last resort and a

hedge against inflation and currency depreciation.
 GOLD

üDemand of gold in increasing as people are discovering new and

new ways to use
ü
üGold is used in Jewelry, in medicine, in food and drinks, in
industries, Electronics and in chemistry labs

35000

The following graph shows the

30000
25000
20000
15000 Gold prices (Rs) last 6 years of prices of gold.
10000
5000
0
200520062007200820092010
 EQUITY

•Equities are often regarded as the best performing

asset class.
•
•However, equity-oriented investments are also
capable of exposing investors to the highest degree
of volatility and risk.
•
•To eliminate this risk diversify your equity portfolio
i.e., include more stocks and sectors.
 EQUITY

Ø if something were to go wrong with one stock/industry

in your portfolio, other stocks/industries should help you
shore up your portfolio.

Ø
Ø“research on stocks” before begin investing in stock
markets
Ø
Ø returns from the equity market: dividend yield and
capital gains
 REAL ESTATE
•

•Real estate is a great investment option

•
•It gives you capital appreciation and rental
income.
•
•It’s an investment option that fights
inflation.
•
•It is a very good tool for wealth creation
but has high risks.
•
•Careful planning, however, can minimize
the risks.
 FOREX

Forex trading is the trading of buying or selling

certain currency.
 FOREX

• As recently as ten years ago, currency trading was only done by

large banking and institutional firms

• FIA and SBP have put new conditions on sale and purchase of
foreign exchange by the licensed Exchange Companies (ECs).
•
•
• Pakistan's forex reserves rise to $15.04 bln (Thu May 6, 2010)
•
•
•
 Mutual fund

•A mutual fund is a professionally managed

scheme that pools money from many investors
•
•Invests in stocks, bonds, short-term 
money market instruments, and/or other 
securities
 BONDS

•It is a fixed income instrument issued for the purpose of raising

capital.
•
•The central or state government, corporations and similar
institutions sell bonds.
•
•A bond is generally a promise to repay the principal
along with a fixed rate of interest on a specified date,
called the Maturity Date.
•
•The main attraction of bonds is their relative safety.
 BONDS

The yield from a bond is made up of two components

• Coupon Interest
The coupon or coupon rate of a bond is
the amount of interest paid per year
Expressed as a percentage of the face
value of the bond.
•
• Capital Gain
If a bond pays no coupon interest, the only yield will be capital
gains.
 FIXED DEPOSITS

When you want to invest your hard earned

money for a longer period of time and get a regular
income, Fixed Deposit Scheme is ideal.
FIXED DEPOSITS

•Safety
•
•
•Tenure
•
•
•Liquidity
•
•
•Additional benefits
 INSURANCE

Protection against loss for which you pay a certain sum

periodically in exchange for a guarantee that you’ll be
compensated under stipulated conditions for any specified
loss by fire, accident, death, etc
 INSURANCE

•Life insurance has traditionally been looked upon pre-dominantly as an

avenue that double up your investment as a saving instrument.
•
•Life insurance can aid your family on a rainy day
•
•Some plans also assist you in planning for such future needs like
children’s marriage, education or purchase of various household items,
etc.
•
•