CHAPTER 3 • Public offering of new issues

• Private or direct placement

• Rights offering
• Capital Raiser
• Investor
• Investment Banker
• The issuing company sells securities directly
to one institutional investor at agreed price
• Does not involved underwriter purchased are

SECURITIES
• Sale of shares to employees (middleman ) fully guaranteed
• Public is informed of the private placement
thru newspaper

MARKET
• Investor is not allowed to sell the shares
within the stipulated time period
Public offering
The sale of of new issues
securities can

3.1
be channeled
THROUGH

PRIMARY MARKET Private or

direct
PRIMARY SECONDARY Market where new shares are issued. The seller of the placement

MARKET MARKET
securities is the firm that issues the securities

Sale of shares Rights

to employees offering

As a mechanism for bringing

together buyers and sellers
• Effort taken by company to give an
• The company sells shares to the existing owners based
of financial assets to facilitate opportunity to the employee to own equity of
the company • upon their proportional share thru pre-emptive rights
trading. • Purpose to retain loyal staff & key executives • Share are sold at lower prices compared to market price
• Shares offered to employees are fully
• An offer of rights is made thru Provisional Allotment Letter
underwritten
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 CHAPTER 3
1. Main board
• new name Main Market • Main Board : RM 60M • Main Board : At least 0.10 and no maximum
2. Second board • Second Board : RM 40M • Second Board : least RM0.10
• new name Main Market • MESDAQ : RM 2M • MESDAQ : least RM0.10

SECURITIES
3. MESDAQ (The Malaysian
Exchange of Securities Dealing
and Automated Quotation)

MARKET
• new name ACE Market
minimum paid up par value of
Capital (RM) ordinary
shares (RM)

Is made up
of
SECONDARY MARKET
PRIMARY SECONDARY Markets where the share originally issued thru the Initial public
MARKET MARKET
primary markets is traded offering (IPO)
offering
OTC (Over The
Counter)

• An initial public offering (IPO) occurs when a company first sells

As a mechanism for bringing common shares to investors in the public.
• Dealer market that uses a quote system in which
together buyers and sellers • Generally, the company offers primary shares thru IPO
negotiation and dealer quotes determine the price
• For a company to offer IPOs, they need to hire a corporate lawyer
of financial assets to facilitate • It is not a specific institution
as well as an investment banker to underwrite the offer
• OTC market is the result of an intangible relationship
trading. • When the company starts to offer IPOs, they are usually required
among seller and buyers of securities who are linked by to reveal financial information about the company so that
a telecommunications network. investors can make an informed decision.
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 Why companies Raised up capital

get Additional fund provide liquidity for Higher profile

investors. Well managed companies,

listed?
has the potential to raise more funds Greater visibility, publicity
from the existing shareholders thru generated by stock broking
rights issues companies & newspaper

Confidence greater
Expansion better position
investor confidence. Once
to expand operations
listed, the reputation and
overseas due to greater
credibility of a company is
recognition
enhanced

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 3.2 Bursa Malaysia and
Securities
to conduct the business
of a stock exchange in
Malaysia

Commission
Advise the Minister on all
matters relating to
securities and futures Maintains a central
industry market place or facility
Supervision of The role of for buyers
exchanges, clearing Securities Bursa and sellers to transact
house and central Commission Malaysia securities which are
depositories listed on
the exchange
Ensuring proper conduct
of market Governs the conduct of
institutions and licensed members and the listed
person companies in securities
issued by companies,
involving both new
issues and secondary
trading
Regulating all matters
relating to unit trust
schemes
To provide a market
place for the purchase &
Functions of sale of listed shares
Regulating the
takeovers and mergers
Securities
Commission Functions To protect the interest of
of companie of Bursa members and the
Malaysia investing
Promoting and public
encouraging proper
conduct amongst To furnish information on
members of the the financial standing of
exchange, clearing listed companies
house, central
depository and all
licensed person
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