“People with money but don’t know how to start or run a business; people who know how to run a business but don’t have the money.”
Capital market
Definition of Capital Market
Markets for buying and selling equity and debt instruments. Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors, and users of capital like businesses, government and individuals.The size of a nation’s capital markets is directly proportional to the size of its economy. The United States, the world’s largest economy, has the biggest and deepest capital markets.
Capital markets include primary markets, where new stock and bond issues are sold to investors, and secondary markets, which trade existing securities.
Stock
The stock (also capital stock) of a corporation constitutes the equity stake of its owners. It represents the residual assets of the company that would be due to stockholders after discharge of all senior claims such as secured and unsecured debt. Stockholders' equity cannot be withdrawn from the company in a way that is intended to be detrimental to the company's creditors.Shares
The stock of a corporation is partitioned into shares, the total of which are stated at the time of business formation. Additional shares may subsequently be authorized by the existing shareholders and issued by the company. In some jurisdictions, each share of stock has a certain declared par value, which is a nominal accounting value used to represent the equity on the balance sheet of the corporation. In other jurisdictions, however, shares of stock may be issued without associated par value.Shares represent a fraction of ownership in a business. A business may declare different types (classes) of shares, each having distinctive ownership rules, privileges, or share values. Ownership of shares may be documented by issuance of a stock certificate. A stock certificate is a legal document that specifies the amount of shares owned by the shareholder, and other specifics of the shares, such as the par value, if any, or the class of the shares.
Bursa Malaysia
Is an exchange holding company and offers a variety of products and services for the Malaysian market, such as securities, derivatives, Islamic market, bonds, indices and the Labuan International Financial Exchange (LFX) which offers listing of financial instruments in US Dollars.Before the Internet, we had to either rely on the advice of a broker who was paid only when we bought or sold or we had to dig through mounds of annual reports and an assortment of documents that were months old by the time we got them.
Today, any investor can access powerful research tools that before the Internet were not available and many of them are free. Of course, there are some very sophisticated tools that come with hefty price tags; however, for most investors all the research they will need is free or available for a modest subscription.
Stock Screener
The most basic research tool is the stock screener. This handy program does in nanoseconds what would take you hours and hours of research by hand to do and best of all, there are many of them on the Internet free for you to use. Some of the better ones come as part of subscription packages to the better research sites, but you can get a feel for how they work for free.The concept is simple. You want to identify stocks that meet certain criteria. (Incidentally, this is how you go about building a portfolio, rather than haphazardly investing in whatever stock looks good at the moment.)
Stock screening programs allow you to enter qualifiers such as industry type, market cap, sales, dividends, and so forth. The more sophisticated the screen, the larger number of qualifiers.
After you put in all the qualifiers, the screener looks at all the companies listed on the major exchanges and pulls out those that meet your qualifications. You get a list of the companies. If the list is too large, you can run the screen again with tighter qualifications to reduce the number of hits.
The more sophisticated screeners allow you to run further screens on the set you just generated, while the free screeners tend to leave you with just the list. Either way, you have just saved yourself hours and hours of work by narrowing down the possible candidates.
The better stock screens offer a significant database, presets, relative as well as absolute numbers and flexibility in entering parameters. Here are a few Bursa stock screeners to help you:
Bursa Marketplace Stock Screener
FT Markets Screener
TradeSignum Screener
KLSE Screener V2
Knowing the basics of investing
If you are going to put your money at risk in a stock investment, you should understand a stock is a type of security reflecting ownership in a publicly traded company. But this alone is not enough to begin the journey of informed investing.
Knowledge on how the stock market functions, how stocks compare to bonds and the potential risks and rewards of each, how stocks trade in the primary and secondary markets, and what rights stock ownership provides is crucial . It’s also helpful to know how stocks trade on Bursa Malaysia and realize how market forces and quarterly earnings reports can impact stock prices. This can help us make more informed choices and become great investors!
