1. Economic Growth
2. Capital Market
3. Technology
4. Security
5. Politics and Development
Part A
A country’s economic growth is often regarded as the catalyst for stock market growth. Over the years, the stock market in Malaysia has developed into one of the fastest growing markets in the region (Ang 2009). The Malaysian economy ensures that the stock market is well structured as this will stimulate investment opportunities in the long run by recognizing and financing productive projects that leads to economic activity, allocation of capital proficiency and facilitation of exchange of goods and services (Mishkin 1998). In the Malaysian economy, stock markets play an important role by changing investments according to what is needed and it is the avenue where the public savings are generated to industries and business enterprises.
Part B
The capital market serves as an avenue for buyers and sellers to engage in the trade of financial securities, which consists of a primary and secondary market. A primary market allows investors to purchase financial products directly from an individual whereas the secondary market is a venue for business between investors.
For instance, the capital market laws were amended to encourage innovation and promote market efficiency. The amended law provides issuers with avenues to better optimize their capital structure and raise finance at competitive costs in meeting their business needs. Simultaneously, investors will benefit from broader choice of options to match their investment profiles and risk appetite. This new structure enhances consent efficiency without compromising investor protection because the new structure differentiates listed and unlisted capital market prod...
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Malaysia is known in leading the Islamic fund management companies and Islamic stock-broking companies that offer Islamic fund management and stock-broking services. The ICM in Malaysia is remarkable, two main reasons have been identified that support the emergence of this market are the 1997 Asian Financial Crisis, and the liquidity problem that arose because of the availability of surplus funds in the Islamic finance industry (IOSCO, 2004).
Besides that, the issuance of licenses to foreign Islamic financial instituitions promoted healthy competition and added to the dynamism of the Islamic financial industry. Malaysia’s ICM market grew deeper over the years as multinational corporations found Shariah-complaint products such as sukuk to be an attractive means of raising capital (Malaysia International Islamic Financial Centre 2014).
"Financial Management in the International Business." Hill: International Business: Competing in the Global Marketplace, Sixth Edition. : The McGraw−Hill Companies, 2007. . Print.
One of the most common ways for a firm to operate or finances its assets is capital structure. Capital structures refer as a combination of equity, debt and hybrid securities that used in the firm operation. In a perfect market, transaction or bankruptcy cost, inefficient information and taxes will not exist. Therefore, Modigliani and Miller created a theory of capital structure in a perfect market. The use of capital structure is important as it affect the firm profitability.
Robert J. Hodrick Geert Bekaert, 2013. International Financial Management. International ed of 2nd revised ed Edition. Pearson Education Limited.
Stock exchanges perform important roles in national economies. Most importantly, they encourage investment by providing places for buyers and sellers to trade securities. This investment, in turn, enables corporations to obtain funds to expand their businesses.
...adopted to maintain stability and social ethics for observing law and order (Ash and Greene 61). Through the legislative governance, the investors became free to invest as restrictions for trade were eliminated and this catapulted the revenues in foreign exchange to match that of developed countries. Although it encountered some problems during its transition, the investment opportunities it bore helped project the economic growth to its current position of among the fastest growing economy (Chakrabarti 71).
The modern Islamic Finance industry is young, its timeline begin only a few decades ago. However, islamic finance is involving rapidly and continues to expend to serve a growing population of muslims as well as conventional.
Saudi Arabia’s capital market is considered to be young compared to other financial markets in the region. Saudi financial markets have been developing slowly because most enterprises in the country are either government owned or family-owned, most of which was funded through state budget, and as a result reduced the need for financing. In the recent past, Saudi Arabia has focused on a careful measurement for structural developments and regulatory changes. However, different phases of historical development of the capital market which can be classified into three phases; pre-industrialization phase, post industrialization phase and growth phase that sparked changes and shaped the kingdom 's capital market on
The evolution of the banking industry in Malaysia has led to conventional banking products and services , such as deposits and loans / hire purchase , taking the characteristics of a more sophisticated and advanced as mobile banking , phone - a- loan , auto pergajian , auto debit, ATM , online shopping and banking. This feature is facilitated by the development of advanced technologies that allow customers to enjoy the manner and process more convenient for their daily banking .
Capital markets are markets "where people, companies, and governments with more funds than they need (because they save some of their income) transfer those funds to people, companies, or governments who have a shortage of funds (because they spend more than their income)" (Woepking, ¶3). The two major capital markets are stock and bond markets. Capital markets promote economic efficiency by moving funds from those who do not have an immediate need for it to those who do. Individuals or companies will put money at risk if the return on the intended investment is greater than the return of holding risk-free assets. An example of this would be those that invest in real estate or purchase stocks and bonds. Those that invest want the stock, bond, or real estate to grow in value or appreciate. An example of this concept would be if an individual or company invested an amount saved over the course of a year. While investing may be riskier, these individuals hope that the investment will yield a greater return than leaving the money in a savings account drawing nominal interest. In this example the companies that issue the stocks or bonds have spending needs that exceed their income so the company will finance their spending needs by issuing securities in the capital markets. This is a method of direct finance because the "companies borrowed directly by issuing securities to investors in the capital markets" (Woepking, ¶5).
Every company listed on the Bursa Malaysia has nearly identical objective that is to maximize company’s profit and to maximize shareholders’ wealth. To achieve this, the company must have sound financial planning; good financial decision, and improve profitability which will then increase the value of the firm. In order to obtain success, the company must have a well plan and execution of its capital structure.
Historical function of the investment banks in Malaysia. Discuss the function of banks as early as in the 50s-60s and make comparison with the 70s & 80s as well as what is new in the year of millennium.
In addition, this study can help managers and investors to plan their investments so that they can sustain and maintain competitive in the market. This study also shed light to the audience
As the world has recently passed through the global financial crisis that begun in 2008 in the USA with the banks’ collapsing, analysts are giving different opinions and making new economic hypothesizes about the origin of, as well as the process of different countries escaped from the crisis. Among all these new “theories”, the case of Islamic banks is interesting in terms of its nature and consequences. In my essay, I will try to highlight the basic principles of the Islamic finance, the reasons of the restriction of interest, the most important tools used by Islamic banks in economic activities and brief explanation of them, and finally my view point of the probable future improvement of the Islamic financial system.
Following the trend of economy, it is important to investors to understand that strong economy creates strong stock market. To elaborate further, as stock prices are increased by current and future expectations of earnings, thus without a strong economy it would be difficult for the companies to increase and sustain their earnings (Kong 2013). The economy development is usually calculated using the gross domestic product of a countries. On the other hand, a change is the stock price can also cause a major impact to the consumers and investors directly. Hence, a loss in confidence by investors can cause a downturn in consumer spending in the long term, which will also affect the economy’s output (Aysen 2011). The graph below shows the relationship of stock market price (KLCI) and the GDP of Malaysia in 2009. Thus, it can be concluded that the economy and the stock market has a positive relationship.
A stock market is a place where stocks and bonds are regularly traded. The stock market plays an important role in the economy where the prices of the stock reflect upon the growth of the country’s economy. Companies who choose to list themselves in the stock market are known as public listed companies where their company assets are open for investment to the public. The stock market connects the buyer and seller where companies are in need of funds and investors are looking for a place to invest their money in. Investors who have invested money into the stocks of the public listed company are now shareholders of that company, where investors now own a part of the company. The purpose of investors investing their money into the stock market is for the financial return, also known as profits. If the company or firm makes a profit, shareholders will be rewarded with dividends however, if the company is making losses, shareholders will also be making a loss in their investment. The stock market prices are volatile where prices rise and fall on a daily basis therefore, investors who invests in the stock market should be aware of the risks involved.