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CAPITAL MARKET (Bond (Characteristic of Bond (Bond Indenture
:pen: a…
CAPITAL MARKET
Types of capital
market
Primary Market
Initial public Offering
:pen: occurs when company issues new share to the investors
:pen: company appoint investment bank as a middleman in issuing new share
:pen: before issuing must get approval from Securities Commission
Sales share to Company
:pen: the company sell new share to their employee
:pen: company will sell their share at discount price
:pen: offer to their employee to have company's equity
:pen: this share are not allowed to sell at specific time
Private Placement
:pen: the company sell their securities directly to their investor
:pen: does not involve middlemen
:pen: this shares not allowed to sell at specific time
Right Offering
:pen: company sell new share to their existing shareholder
:pen: sell share through pre-emptive right
:pen: will sell share at lower price from market price
Secondary Market
:pen: deal with previous securities issued by the company to investor
:pen: investor sell their securities using secondary market
:pen: example secondary market Bursa Malaysia
Bond
where bond issuer interested to raise funds, then bond issuer agrees to pay bond stated capital plus coupon payment to bond holder upon maturity
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Types of bond
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Zero coupon bond
:pen: no periodic coupon paid during life of the bond
:pen: normally sold at discount
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Equity
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Common stock
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Types of Common stock
Blue-Chip stock
:pen: high quality stock
:pen: issued by well establish company
:pen: provide reasonable dividend
:pen: example Celcom
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Speculative Stock
:pen: issued by highly unstable company
:pen: usually pay little or no dividend
:pen: used to seek capital gain
Defensive stock
:pen: price of stock maintain and do well
:pen: less affected by downswing in business cycle
:pen: include shares of public utilities
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