Thursday, February 15, 2007

Share price determination

Ultimately, at any given moment, an equity's price is strictly a result of supply and demand. The supply is the number of shares offered for sale at any one moment. The demand is the number of shares investors wish to buy at exactly that same time. The price of the stock moves in order to achieve and maintain equilibrium.

When buyers outnumber sellers, the price rises. Eventually sellers enter, and/or buyers leave, achieving equilibrium between buyers and sellers. When sellers outnumber buyers, the price falls. Eventually buyers enter, and/or sellers leave, again achieving equilibrium.

Thus, what a share of a company at any given moment is determined by all investors voting with their money. If more investors want a stock and are willing to pay more, the price will go up. If more investors are selling a stock and there aren't enough buyers, the price will go down.

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What is Equity Investment

Equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.

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Equities in Malaysia - Malaysian Stocks Market (Bursa Malaysia)

Equities in Malaysia are traded under Bursa Malaysia or formerly known as Kuala Lumpur Stock Exchange (KLSE). Malaysia Equities have benefits from China Stocks Market Boom. There are numbers of Companies in Malaysia joint ventures or supply raw materials to China. Malaysia is the largest exporter of Crude Palm Oil (CPO).

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Why Invest in Malaysian Stocks Market (Bursa Malaysia)

Products available in Malaysian Stocks Market (Bursa Malaysia)

Ordinary Shares - Ordinary shares give holders the rights of ownership in the company.
Preference Shares - These are shares which carry the right to dividend (normally fixed) which ranks for payment before that of ordinary shareholders. Preference shares may be preferred also as regards to distribution of assets upon dissolution of the company.

Exchange Traded Fund is a new investment product made available on Bursa Malaysia. It represents a portfolio of securities either in the form of equities, fixed income or commodities designed to track performance of an index, offering investors an innovative way to get effective exposure to specific markets or sectors.

FTSE Bursa Malaysia 30 Index
This tradable index comprises the 30 largest companies in the FTSE Bursa Malaysia 100 index by market capitalisation.

FTSE/ASEAN Index
A benchmark index providing an indication of the financial performance of the top 180 large and mid cap companies from the five ASEAN regions: Indonesia, Malaysia, Philippines, Singapore and Thailand.

FTSE/ASEAN 40 Index
A tradable index consisting of the top 40 constituents from FTSE/ASEAN index, ranked by market capitalisation.

Bursa Malaysia Derivatives (MDEX)is wholly owned by Bursa Malaysia Berhad.

Labuan International Financial Exchange (LFX), is wholly owned by Bursa Malaysia Berhad. Based in Labuan, the offshore exchange in Malaysia facilitates the listing and trading of various financial instruments and securities which are based on both conventional and Islamic principles.

KLCI (FKLI) Futures
KLCI (OKLI) Options
Crude Palm Oil (FCPO) Futures

3-Year Malaysian Government Securities (FMG3) Futures
5-Year Malaysian Government Securities (FMG5) Futures
10-Year Malaysian Government Securities (FMGA) Futures
Crude Palm Kernel Oil (FPKO) Futures
3 Mth Month Kuala Lumpur Interbank Offered Rate interest rate KLIBOR(FKB3) Futures

Single Stock Futures (SSFs) - can be an addition to almost any portfolio. They provide an avenue to hedge your share exposure risk, as well as to speculate on share price movements. SSFs offer gearing and are cheaper to trade than direct share investment. You can buy or sell SSFs at any time, with no up-tick rule to worry about.

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Stock, Investment and Trading

Investment is something that everyone should learn and explore.
Stock is something that is not teached in school but should be learn after school.

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