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KASB Securities’ $4.5mn bet on creating an apprised generation of stock market investors

KASB Securities’ $4.5mn bet on creating an apprised generation of stock market investors

LAHORE: In a country of over 220 million people, a little over 250,000 people invest in the stock market, and Pakistan’s leading brokerage house KASB Securities wants to change that through its online stock trading application KTrade.

KTrade was launched in 2019 to buy or sell stocks on the Pakistan Stock Exchange (PSX) and in a recent push to increase the number of stock traders in Pakistan, KTrade raised $4.5 million in a funding round led by Hong Kong-based TTB Partners and American HOF Capital. Fintech investor Christian Angermayer and prominent business groups also joined the round.

KTrade is not simply pushing to increase the number of stock market investors in Pakistan. It wants to increase the number of ‘informed’ retail investors that are able to make prudent investment decisions based on research.

In the traditional broker-client setting, High Net Worth (HNW) individuals and institutions get preferential treatment with cutting edge research available to this lot only, while individual investors would be considered as extras. This has also kept the number of stock market investors low.

According to Mahmood Ali Shah Bukhari, the CEO of KASB Securities, the KTrade application eliminates the information asymmetry between High Net Worth individuals and retail investors by making access to research and the content of the research similar for an investor who has Rs1 million in the account as compared to an investor who is starting off with Rs5,000 only.

“Our aim is to hit 10 million retail stock market investors. To get to that number, financial literacy is the primer and our plan is to make the research available to everyone,” says Mahmood.

“Supplemented by the 98 million people that have access to the internet on their phones, there can be a lot more stock market investors digitally that can be trading on the stock exchange and that is what we want to achieve,” says Mahmood Ali Shah Bukhari, CEO at KASB Securities.

“We are also disabusing people of the perception that stocks do not generate better returns than investments in gold or real estate. We carried out a study which substantiated that if someone invests in real estate for 10 years and does the same in the stock market, he would get better returns with stocks,” says Mahmood.

“These are the people who need to be trained to not keep gold or dollars or rely on rental income,” he says.

On the same theme and to set itself apart from competitors, KASB Trading Titans allows users to acquaint themselves with stock market trading in a virtual setting through an account that allows mock trading.

“KTrade presently has 200,000 registered users, most of which are mock traders. We give these traders Rs1 million in virtual currency to invest in the market at real prices,” says Mahmood. “Some of these mock traders have been able to generate returns better than experienced fund managers and we know that our bet is safe,” adds the CEO.

The push to onboard retail investors is vigorous and KASB Securities has recently signed an MoU with JazzCash that will enable JazzCash users to invest in stocks directly from their application, with easy onboarding.

While Ktrade presently only has the option for stock trading, it has already secured a license for commodity trading that will be launched soon, followed by enabling investments into mutual funds on the application.

Mahmood says that with the incoming funds, the company plans to spend on expanding the outreach of KTrade with the opening of facilitation centers, and on promoting the application for people to get acquainted with what is happening in the stock market and educating people about it.

“Technology is going to be at the forefront as well because we want to make the application experience as friendly as possible,” he says.