Capital Market Master Plan 3 - what does it mean to me and you?

By ZAIDI ISHAM ISMAIL
editor@dagangnews.com

KUALA LUMPUR Sept 23 – Malaysia's capital market was abuzz on Monday with the launch of a new masterplan on how to elevate the sector to a higher level.

The Securities Commission which takes care of the sector which was valued at RM3 trillion last year, renewed its pledge to bolster the sector further.

But what is the capital markets all about? How does it affect you and me? Let's take a look.

What is the capital market?

In layman's terms, capital is just a fancy name for money and it is traded at a marketplace for listed firms called Bursa Malaysia.

Everywhere in the world, there is a market place to trade capital such as the Singapore Stock Exchange, Shanghai Stock Exchange and so many others.

In the case of Bursa Malaysia, it is a marketplace for over 1,000 listed companies.

This is where the rakyat can have a slice of the pie as their investments grow with the companies.

Why is the capital market important?

The capital market in a way is a barometer on the health of our economy.

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It is a place where money is raised by the listed firms via numerous financial instruments.

These include rights exercise, private placement and many other corporate jargons.

It is important that the Securities Commission, the sector's watchdog agency continue to nurture and bolster the capital markets.

This is because when the market is in the pink of health brimming with financially solid companies, it will attract more and more investors to Bursa especially foreigners.

These investors come in droves to invest and plough further their cash in the capital markets.

When foreign funds come in, it is an indication that the economy is doing well and investors see this as a sign that the country is economically solid and subsequently, they will come in droves and pick up our stocks.

What does a capital mart mean to you and me?

The capital markets might be alien to the rakyat but it is actually essential.

This is because these listed firms pay tax to the government which is used among others to finance schools, roads and hospitals.

Unit trust agencies such aa Permodalan Nasional Bhd also own shares in these listed firms.

When the companies do well, they share their profits with the rakyat via Amanah Saham Bumiputera and others.

So, there is more to the capital market and what it can do for the rakyat.

The Securities Commission must encourage locals to invest by simplifying the rules and make the shares more affordable.

As more and more Malaysians become financially literate, so will their living standards and the country will become a haven for investments which augurs well for the rakyat. – DagangNews.com