To understand the concept of share price, first, we should know what does share mean
A share is a single unit of proprietorship in a company or rather a financial asset. It is essentially an exchangeable piece of the value of a company or an asset that can fluctuate up and down depending on market factors. Shares are also known as stocks. Share is a separate fragment of the issued share capital of a company. A person, company, or organization that holds stocks in a given company is a shareholder.
A share price is the price of a single share of several marketable stocks of a company, derivative, or another financial asset. So, in layman’s terms, the stock price or share price is the highest amount of money which someone is ready to pay for the stock, or it can be the lowest amount that the stock can be bought for.
The shares of any company are tradable between 9:15 am and 3:30 pm every day. So a few people might be vending those shares and some might be buying them. At any given point of view during this trading session, if there are more sellers than buyers of a particular share, then that share’s price in the stock market falls. Alternatively, at any given point of the trading session, there are more buyers than sellers of a particular share, then that share’s price in the stock market rises.
The stock market, share market, or equity market, all three have the same meaning. These are the markets where anyone can sell or buy a company’s shares. Buying shares of a company means purchasing some percentage or ratio of ownership of that company. If that company makes a profit, some percentage of that profit would be also given to you. If that company experience a loss, a ratio of that loss would also be borne by you.
How Share price is determined:
The share price is determined by the interaction of supply and demand.
Demand is a amount of a good that buyers are ready and able to purchase at different prices. Supply is the willingness and ability of a producer to create goods and services to take them to the market.
- If demand for a share is more than supply then the share price should rise.
- A falling share price indicates excess supply.
Comprehending the law of supply and demand is simple; understanding demand can be complicated. The price movement of a stock indicates what investors feel a company is worth but how do they determine what it is worth? One factor, surely, is its current earnings: how much profit it put together. But investors often look beyond the numbers. That is to say, the price of a stock not only mirrors a company's current value it also reflects the prospects for a company, the development that investors anticipate of it in the future.
The share price of a private company:
- Initially set when shareholders or investors subscribe for their shares.
- Subsequently, only determined when shares are bought or vended.
- No active market in the shares of a company, so it is hard to judge the current value.
The share price of a public company:
- Highly transparent means displayed particularly in real-time.
- Share prices are widely published and traced.
- The share price of a public company is significantly influenced by market expectations of business performances.
The share price of a private limited company:
1. HASCOL Petroleum Limited:
HASCOL Petroleum Limited was integrated in Pakistan as a private limited company on March 28, 2001. On September 12, 2007, the Company was transformed into a public unlisted company. The Company is engaged in the business of procurement, storage, and marketing of petroleum, chemicals, LPG, and related products. The Company acquired an oil marketing license from the Ministry of Petroleum and Natural Resources in the year 2005 as well as obtained assets of LPG licensed company in the year 2018.
HASCOL share price:
GAIL share price: