Learning Goals. Differentiate between primary market and secondary marketBasic types of transactionHow to buy and sell sharesMalaysian Security Market Regulations. Introduction. Securities markets are forums that allow suppliers and demanders of securities to make financial transactions.How fi
1. CHAPTER 2 Investment Market and Transaction
2. Learning Goals Differentiate between primary market and secondary market
Basic types of transaction
How to buy and sell shares
Malaysian Security Market Regulations
3. Introduction Securities markets are forums that allow suppliers and demanders of securities to make financial transactions.
How firms issue securities?
4. Primary Market New stocks, bonds or other securities that offered to the public by investment bankers
Two types of primary market issues of common stock
Initial Public Offering
Seasoned New Issued
5. IPO Process First, obtain the approval of it current shareholders
Auditors and lawyers must also must certify that all documents for the company are legitimate.
Then, finds an investment bank who willing to underwrite the offering.
The company files a registration statement with the SC (Security Commissioner), which includes PROSPECTUS that describes the key aspects of the issue, the issuer, and its management and financial position.
After SC approves the registration statement, the price of the offered to the public securities will be announced.
The investment bankers and company executives promote the company’s stock offering through a road show, a series of presentations to potential investors around the country and sometimes overseas.
6. Reason for getting listed Higher Profile
7. Secondary Market Once securities are issued to the public, investors may trade them among themselves in the secondary market. The secondary market will provide liquidity to the sellers.
is an organized exchange which securities are traded after they have been issued.
8. Development of the Malaysian Securities Industry
1930 - Singapore Stockbrokers’ Association – the first formal organization in the securities business in Malaysia.
1937- Re-registered as Malayan Stockbrokers’ Association, but still no public trading of shares.
1960- Malayan Stock Exchange formed and public trading of shares began on 9 May.
1964- Stock Exchange of Malaysia formed.
1965- With the secession of Singapore from Malaysia, the common stock exchange continued to function but as the Stock Exchange of Malaysia and Singapore (SEMS).
9. 1973- With the termination of currency interchangeability between Malaysia and Singapore, the SEMS was separated into The Kuala Lumpur Stock Exchange Bhd (KLSEB) and The Stock Exchange of Singapore (SES). Malaysian companies continued to be listed on SES and vice-versa.
1973- A new company limited by guarantee, The Kuala Lumpur Stock Exchange (KLSE) took over operations of KLSEB as the stock exchange. In 1994, re-named Kuala Lumpur Stock Exchange.
2004- Kuala Lumpur Stock Exchange became a demutualised exchange and was re-named Bursa Malaysia.
10. Regulatory Structure Securities Industry Act 1983
Securities Industry (Central Depositories Act) 1991
Securities Commission Act 1993
Companies Act 1965