P

Glossary · PSX term

Penny stock.

A penny stock is a very low-priced share, often of a small or troubled company.

Definition

These stocks can be highly volatile and illiquid, with wide spreads and a higher risk of manipulation. Low price alone does not make a stock cheap in value terms.

Worked example

A struggling textile company trading at Rs. 3 with thin volume would be considered a penny stock.

Related on PSX Clarity

Small-cap stock

More glossary terms

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Price-to-earnings ratio

The price-to-earnings ratio compares a company's share price with its earnings per share. It is a valuation shortcut, not a complete investment case, and should be compared within the same sector.

Price-to-book ratio

Price-to-book ratio compares a company's market price with its book value per share. It is often used for banks, insurers, and asset-heavy PSX companies.

Price return measures how much a share price has moved over a period, excluding dividends and other income. It is different from total return.

Payout ratio shows how much of a company's earnings are distributed as dividends. It helps investors assess whether the dividend appears conservative or stretched.

Proxy voting lets a shareholder authorise someone else to vote their shares at a company meeting.

A price band is the allowed range between the highest and lowest price a stock can trade at in a session.

Pakistan Investment Bonds (PIBs)

PIBs are longer-term government bonds issued by Pakistan, typically 3 to 30 years.

The policy rate is the benchmark interest rate set by the State Bank of Pakistan.

The PEG ratio divides the P/E ratio by the company's earnings growth rate.