Development of the Malaysian Capital Market
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Development of the Malaysian capital marketCapital market is the securities’ market that provides longer period for business enterprises and governing to raise their long-term funds. The Malaysia capital market is divided into two types, which are primary market and secondary market (Chakra, 2009). They are developed by government at the end of 1980s. (Shimomoto, 1999)The primary market is also called as New Issue Market (NIM). The primary market is the place for new issued securities to be created and traded. The new securities issued by governments, corporations, and companies are stocks and bonds due to raise their own capitals. Therefore, they will earn the money directly after the investors have bought the securities. This process is called as Initial Public Offering. (World, 2013)The secondary market is where investors resale the securities which are purchased by them in primary market without involvement of issuing companies. The resale value of securities is depended on the fluctuation of interest rate. The secondary market is divided into auction market and dealer market. The auction market is the area concentrated by investors and institutions to announce the prices and the selling willingness. The dealer market is operated through electronic networks. (Staff, 2014)The capital market is controlled and managed by KLSE that started to responsible fully at the end of 1989, including the development of capital market infrastructure, the introduction of computerized trading and settlement system. In addition, KLSE is responsible to promote regulatory framework established by government to enhance and measure capital market infrastructure, for examples are credit rating agency (1990), and bond information and dissemination system (1997) (Shimomoto, 1999). Capital Market Master Plan is executed by government from 2010 to 2010 for directing the development of the Malaysian capital market. (Chakra, 2009)Conventional and Islamic financial products that are available in MalaysiaConventional and Islamic financial institutions play important role in the economy of Malaysia. Conventional financing is the standard and internationally financing system that provides various services to people globally. Besides that, Malaysia plays as an International Islamic Finance Centre (Jeng_llot, 2009) so Islamic financial institutions are managed properly by Bank Negara Malaysia as well as Conventional financial institutions.All Islamic financial institutions have set up Shariah Committee to guide any matter or action in manner of Shariah principles for submitting the way of life shown by Muhammad SAW (Islamicfinanceinfo, 2011). Therefore, there are a lot of differences between Conventional and Islamic financial products:

ProductsConventional Financial SystemIslamic Financial SystemDepositThe reward of deposit is fixed. The return of long-tem deposit is higher and return of short-term is lower.Risk is born by Conventional financial institutions and the reward belongs to them after servicing the depositors at fix rate. (Hanif, 2011)The deposit are accepted through Mudharabah and Wadiah Yad Dhamanah where is variable reward. Islamic financial institutions share profit of depositors but depositors need to bear the losses alone when facing losses cases.The risk and reward both shared by depositors. (Hanif, 2011)LeasingA conventional leasing contract is a contract between a lessor and a lessee for hire a specific asset within a series of payment paid by lessee.Leased asset must not been a “limited use” object in contract.(Ijarausa, 2014)An “Ijarah” contract is the leasing contract when lessee has specific service or benefit against a specific consideration or agreed rent from the asset owned by the lessor.Leased asset must been a “non-fungible” which means should not perish in usage. (Ijarausa, 2014)House Financing Flexi Home Loan is a conventional house financing. It is a mortgage product linked to current account of borrowers.The loan instalment that includes interest will be automatically deducted from the linked current account. (Team, 2012).BBA house financing is an Islamic house financing. It is a buy-and-sell concept that starts from Islamic financing institutions buys property at current market price and sell it back to customers at a agreed price.Customers and Islamic financing institutions will make a term of instalment without charging interest because Riba concept in Islam.(Team, 2012)Identify the types of foreign exchange risks and how to mitigate the risks exposures faced by a companyForeign exchange risks are the risk of investments’ value changing due to the uncertain movement or change in currency exchange rates. It is also known as “exchange-rate risk” or “currency risk”. Foreign exchange risks are categorised to transaction risk, translation risk, and economic risk. (Investopedia, 2014)Transaction risks are the risk of exchange rate fluctuation between transaction date and settlement date (Bank, 2012). The longer differentiate between those date has a higher transaction risk. Transaction risks primarily associate with import and export and affect the cash flow of a company. Therefore, companies can hedge market rate through insuring to mitigate the effect of unexpected change in exchange rates. Hedging helps companies to reduce risk, not making profits. Besides that, measuring and monitoring is a method in controlling transaction risks. (Stalin, 2012)

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Development Of The Malaysian Capital Marketcapital Market And Securities’ Market. (April 20, 2021). Retrieved from