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CHAP 2 : SECURITIES MARKET - Coggle Diagram
CHAP 2 : SECURITIES MARKET
2.1 PRIMARY MARKET
Primary market = a market for company or government to issue new securities tp the public to raise fund
INITIAL PUBLIC OFFERING
Initial public offering (IPO) = occur when company issues new share to the investors
IPO = first time company issues the securities to the public
Company (capital raise) = will appoint invesment bank as a middlemen in issuing the new share
SALE SHARES TO EMPLOYEES
Company sell new share to their employees called by Employee Share Option Scheme (ESOS)
Company sell the securities at discount price to their employees
RIGHT OFFERING
ADVANTAGES
Company sell at discount price for right of offering
Shareholders are able to maintain percentage of ownership in the company
DISADVANTAGES
Shareholders may not able to suscribe to the rights
Share price may be below than market price due to the market condition
PRIVATE PLACEMENT
Company use this to sell new securities. Company find the institutional as their investor & they willing to buy
Procces does not involve the underwriters
Investors is not allowed to sell shares within a specific time period
BONUS ISSUES
SEASONAL OFFERING
2.2 SECONDARY MARKET
The market in which securities are traded after they had been issued
MAIN MARKET & ACE MARKET
MAIN MARKET
Main market = merged between main board & second board
Is for established company to raise fund
Mininmum price for IPO = RM0.50 each share
ACE MARKET
Access, Certainty, Efficiency (ACE) = an evolution from MESDAQ
Is an alternatives market for all companies or sectors to raise fund
No minimum price for IPO
REASON FOR LISTING
To raise capital
Confident
Expansion
Higher Profile
TYPES OF TRANSACTION
MARGIN TRADING
CASH TRANSACTION
CONTRA TRANSACTION
TYPES OF ORDER
MARKET ORDER
Is an order to buy & sell stock at best price
LIMIT ORDER
Is an order to buy or sell at a specified price
CENTRAL DEPOSITORIES SYSTEM (CDS)
Is operating under Bursa Malaysia Depository Sdn. Bhd.
Is a scrip less trading system of Bursa Malaysia
Used the principle of book entry where CDS representing ownership
2.3 REGULATOR BODIES IN MALAYSIA
BURSA MALAYSIA
Was established since 1930 & first formal organization involves in securities known as Singapore Stockbroker's Association
Acts as a regulatory to make sure the transaction is in good manner
Provides Rule of Bursa Securities (RBS)
RBS engage in conducting the business, trading, settlement & others
1990 = set up Malaysian Central Depository Sdn Bhd for operation of CDS
CDS involved shares transaction for clearing & settlement trading
SECURITIES COMMISSION
Was established at 1 March 1993,
Governs under Securities Commission Act 1993
The roles include supervise exchange, clearing house & central depositories & regulates all matters related to capital market
SC is responsible to regulate the merger & take over of company
SC approved license in dealing the securities
2.4 STOCK BROKING COMPANY
Is a intermediary in trading the equity
Is a company carrying in dealing with the securities
Investors will look for stock broking company when they want to buy securities
Investment bank = is an institution that can raise capital, trade the securities & manage corporate merger
2.5 GLOSSARY USED IN BURSA MALAYSIA
BID PRICE
Price which a broker willing to buy
ASK PRICE
Price which a broker willing to sell
SHORT SELLING
Investors sells the securities but does not own that time of selling
BULL MARKET
When the share price in rising trend
BEAR MARKET
When the price in decreasing trend
ANNUAL REPORT
I t is a compilation of company's activities & financial statements of company
BUY ORDER
An order to buy shares