Picture a shareholder who sees a dividend announcement, buys the stock the day before the book closure starts, and waits for the cash. It never arrives. Or someone who reads “10% bonus” and assumes the investment just grew by 10 percent. Bonus shares, right issues, book closure, and ex-dividend dates are the vocabulary of every PSX shareholder, and the confusion around them costs real money through missed dividends, unnecessary tax, and rights allowed to lapse. So, here I am going to share with you about ex-dividend date and bonus shares in Pakistan. This will be a complete shareholder’s guide you can follow along.
This guide explains each term in plain language, with worked rupee examples and a calendar, built on PSX’s own rules and current tax law. Figures in the examples are hypothetical, so use them to learn the mechanics, not as a forecast for any company.
Table of Contents
The Four Terms in One Table
| Term | What It Means | What It Does to Your Holding |
|---|---|---|
| Cash dividend | A cash payout per share | Cash arrives, the share price falls by roughly the same amount |
| Bonus shares | New shares issued free to existing holders in proportion to what they own | More shares, lower price per share, same total value |
| Right issue | An offer to buy new shares, usually at a discount, in proportion to your holding | You choose whether to pay up |
| Book closure | A window in which the company freezes its share register to decide who is entitled | Transfers of registered ownership pause, but trading continues |
How Book Closure and the Ex-Date Work Under T+1
If you are investing in PSX you have to know Ex-Dividend Date and Bonus Shares in Pakistan. When a company declares a dividend, bonus, or right, it announces a book closure period. The register of shareholders is frozen for that window, and only the people on the register at the cut-off receive the entitlement. Trading does not stop during book closure. Only the transfer of registered ownership pauses.
The ex-date is the first day the stock trades without the entitlement. Buy on or after it, and the payout goes to the seller. PSX’s rule book says that when a company closes its books to determine an entitlement, the exchange determines the ex-price using a prescribed mechanism, so the opening price is adjusted for you.
Since PSX moved to T+1 settlement on 9 February 2026, the timing is tighter than older guides suggest. A share bought today settles tomorrow, and your name has to be on the register before the books close. As a result, the ex-date generally falls one business day before book closure starts, and the last day to buy with the entitlement is two business days before it. Many guides still online were written for T+2 and subtract two or three days, so check each notice or your broker’s platform for the exact ex-date. Notices usually state the book closure dates, not the ex-date.
A hypothetical calendar. Suppose a company’s book closure runs from Tuesday 3 November to Monday 9 November 2026.
| Event | Date | What It Means |
|---|---|---|
| Last day to buy and be entitled | Friday 30 October | Your purchase settles on Monday 2 November, before the register freezes |
| Ex-date | Monday 2 November | Purchases from this day settle on 3 November, too late, so the seller keeps the payout |
| Book closure begins | Tuesday 3 November | Register frozen for transfers |
| Book closure ends | Monday 9 November | Register reopens |
Cash Dividends: Why the Price Drops
Most listed PSX shares have a face value of PKR 10, and dividends are often announced as a percentage of it. “50 percent” means PKR 5 per share, not a 50 percent return on what you paid. Check the notice for the face value.
A worked example. You hold 1,000 shares at PKR 200, worth PKR 200,000, and the company declares PKR 5 per share.
| Filer | Non-Filer | |
|---|---|---|
| Gross dividend (1,000 × PKR 5) | PKR 5,000 | PKR 5,000 |
| Dividend tax (15% or 30%) | PKR 750 | PKR 1,500 |
| Net cash received | PKR 4,250 | PKR 3,500 |
| Share price after ex-date | About PKR 195 | About PKR 195 |
| Shares are now worth | PKR 195,000 | PKR 195,000 |
| Total value (shares plus net cash) | PKR 199,250 | PKR 198,500 |
| Change versus before | Down PKR 750 | Down PKR 1,500 |
The price drop equals the dividend, so you gain nothing from receiving it, and you lose the tax. That is why buying just before the book closure to “capture” a dividend does not work. The dividend tax rates, 15 percent for filers and 30 percent for non-filers, were left unchanged by the Finance Act 2026 and are discussed in the budget article in this series. Registrars also deduct Zakat from dividends unless you have filed an exemption, as explained in the Zakat article in this series.
Bonus Shares: Re-Slicing the Pie
A bonus issue creates new shares from the company’s reserves and gives them to existing holders. Nothing new flows into the company, so the total value of the business does not change. There are simply more shares, and each is worth proportionally less.
A worked example. A 10 percent bonus gives you 1 new share for every 10 you hold. You own 1,000 shares at PKR 200, worth PKR 200,000.
- You receive 100 bonus shares, for 1,100 in total.
- The ex-bonus price adjusts to PKR 200 divided by 1.1, about PKR 181.82.
- Your holding is worth 1,100 × PKR 181.82 = PKR 200,000. Nothing was gained.
- If earnings per share were PKR 20, they become about PKR 18.18 on the larger share count. The price-to-earnings ratio stays at 10 either way.
The tax catch. Bonus shares are taxed under Section 236Z, introduced by the Finance Act 2023, and the tax is final. According to FBR’s rate card, the company withholds 10 percent of the bonus shares for filers and 20 percent for non-filers. A company’s own notice to PSX described how it works in practice: it retained those shares, sold them, and deposited the proceeds with FBR. You can usually pay the tax in cash within about 15 days to receive the full allotment, otherwise the company may sell shares to cover it.
| Filer | |
|---|---|
| Bonus shares declared (10% of 1,000) | 100 |
| Withheld for tax (10%) | 10 |
| Bonus shares credited | 90 |
| Holding after ex-bonus (1,090 × PKR 181.82) | PKR 198,182 |
| Change versus before | Down PKR 1,818, which is the tax |
So a bonus issue is not free money. At best it is neutral, and after tax it costs you something. A bonus can be a positive signal about a company’s confidence or liquidity, but the arithmetic is not a gain.
Right Issues: A Decision, not a Gift
A right issue invites existing shareholders to buy new shares, usually at a discount to the market price, to raise money for the company. Under the rules described in PSX’s index methodology, a company that declares a right issue has to close its books to determine entitlements within 30 days of the declaration. Unlike a bonus, a right asks you to put in cash.
A worked example. A 20 percent right issue offers 1 new share for every 5 held, at PKR 100 (face value PKR 10 plus a PKR 90 premium), while the stock trades at PKR 140. You hold 1,000 shares, worth PKR 140,000, and are entitled to 200 right shares costing PKR 20,000.
The theoretical ex-right price blends the old and new shares: (5 × PKR 140 plus 1 × PKR 100) divided by 6 = PKR 133.33. The actual ex-price comes from PSX’s mechanism, so treat this as an approximation.
| Your Choice | What Happens | Total Value |
|---|---|---|
| Subscribe in full | You pay PKR 20,000 and hold 1,200 shares × PKR 133.33 = PKR 160,000 | Neutral: PKR 140,000 plus PKR 20,000 paid in |
| Sell your right, if the company allows trading of the letters of right | You receive about PKR 33.33 per right, or PKR 6,667, plus 1,000 shares × PKR 133.33 | Neutral: about PKR 140,000 |
| Do nothing | You hold 1,000 shares × PKR 133.33 = PKR 133,333 | Down PKR 6,667, about 4.8 percent |
The costly mistake is doing nothing. Your shares are diluted and you collect nothing for the right you let lapse. If you do not want to invest more cash, check whether the right can be sold and what the deadline is.
Why the KSE-100 Does Not Jump
PSX adjusts the free-float capitalization and the index divisor for bonus and right issues, so the index level stays continuous, as the PSX indices article in this series explains. The same logic applies to your own charts. A chart that does not adjust for corporate actions will show a sudden drop on the ex-date that is not a real loss.
What to Check Before an Ex-Date
| Check | Why It Matters |
|---|---|
| The exact ex-date and book closure dates | Missing them forfeits the entitlement |
| Whether it is cash, bonus, or right, or a combination | Each has a different tax and cash effect |
| The face value | Percentages are quoted against it, not your purchase price |
| Whether you pay tax in cash on a bonus | You may be able to keep the full allotment |
| The deadline to accept or sell a right | A lapsed right is a real cost |
| Whether your shares are in a CDC account in your own name | The entitlement is credited to the registered holder |
Common Mistakes Shareholders Make
Treating a bonus as a profit. The total value stays the same, and tax is withheld.
Buying before the ex-date to “capture” a dividend. The price falls by about the dividend and you pay tax on it.
Reading “100% dividend” as doubling your money. It refers to the face value.
Letting a right issue lapse. You are diluted and receive nothing.
Using T+2 timing rules from older guides. Under T+1, the cut-offs moved, so check each notice.
Panicking at an ex-date price drop. It is an adjustment, not a loss in value.
Forgetting the tax on bonus shares. The company withholds shares before you receive them.
Mixing up book closure for a dividend with book closure for a meeting. Companies also close the register for AGMs, which carries no payout.
Conclusion
Corporate actions look complicated, but they all reduce to two questions: what changes in your total value, and what changes in your tax. A cash dividend moves value from the share price into your pocket and then taxes it. A bonus issue re-slices the same value and withholds some shares for tax. A right issue asks you to decide whether to add money or sell the right. None of them is free money, and each has a deadline.
Before the next ex-date on a stock you own, read the notice, work out the cut-offs under T+1, and run the numbers in the tables above with your own holding. Ten minutes of arithmetic keeps the vocabulary from costing you.
Further reading and official sources:
- Pakistan Stock Exchange, financial and corporate announcements including book closure notices: dps.psx.com.pk
- Pakistan Stock Exchange, rule book (Rule 10.6 on ex-prices): psx.com.pk
- Federal Board of Revenue, withholding tax rate card (Sections 150 and 236Z): fbr.gov.pk
