Affin Hwang Investment Bank

A broker is an individual or a firm who arranges transactions between a Buyer (usually an Investor) and a Seller for a commission when the deal is executed. A Broker who also acts as a Seller of Buyer in it’s own right becomes a Principal Party to the transaction. A broker also refers to the role of a firm when it acts as an agent for a Customer, and charges the Customer a commission for its services.

Also known as brokerage firm. Brokerage refers to the financial institution that facilitates the transactions between a Buyer and a Seller. Brokerage firms typically serve a clientele of Investors in stocks, shares, bonds and other investment products.

Also known as Brokerage Fee, and can be interchangeable. Brokerage commission is the payment made to the brokerage for executing transactions between a Buyer and a Seller. The amount is based on a percentage of the value of the transaction. In certain situations, the Brokerage Fee can also be a flat fee.

Bursa Malaysia is the only stock exchange of Malaysia. It is located in Kuala Lumpur, and was previously known as the Kuala Lumpur Stock Exchange. Shares, stocks and other securities are traded on this exchange on a day-to-day basis. Any companies who wish their shares, stocks and other securities to be bought and sold in the open share market must be listed with Bursa Malaysia. Any company wishing to do so must meet with the requirements set by Bursa Malaysia.

CDS refers to Central Depository System, and represents the ownership and movement of securities. A CDS Account is therefore an electronic account which is maintained by Bursa Malaysia, and is used to keep track of the movement of shares and stocks.

Compound interest (or compounding interest) is interest calculated on the initial principal and the accumulated interest of previous periods of a deposit or a loan. For the former, it is the result of reinvesting interest, rather than paying it out, so that the interest earned in the next period will be higher.

Equity is the value of shares issued by a company. Equity is often used to refer to an ownership interest in a business, such as stockholder’s equity. Equity can also be a source of finance for any company, giving Investors rights to share profits or claim on assets.

Foreign Share Trading is the trading of shares, stocks, bonds and other investment products that occur within a foreign share market. Examples of Foreign Share Trading would be the trading of shares in the UK, USA, Australia, Singapore etc.

Futures Trading happens when a Futures Contract between a Buyer and a Seller is agreed upon. A Futures Contract are standardized agreements that typically trade an asset on an exchange, and is defined as an agreement to buy or sell an asset at a future date at an agreed-upon price. Most transactions in Futures Trading are settled in cash. The actual asset is usually a commodity.

An idle asset is an asset that is not being used, and therefore does not generate any revenue for the owner of the asset. Frequently, an idle asset will have a maintenance cost associated with it.

Inflation is a general increase in prices and the fall in the purchasing value of money. It can also be considered to mean the rate at which the prices of goods and services rise. It is often expressed as a percentage, and also indicates a decrease in the purchasing power of a country’s currency.

The Islamic Capital Market is where shariah-compliant financial assets are transacted. It works parallel to the conventional capital market, and helps investors find shariah-compliant investment opportunities.

KLCI stands for Kuala Lumpur Composite Index. It was originally introduced in 1986. In 2006, it became the FTSE Bursa Malaysia KLCI, and is also known as the FBM KLCI. It is composed of the 30 largest companies listed in Bursa Malaysia by market capitalization that also meets the eligibility requirements of the FTSE Bursa Malaysia Index Ground Rules. This index is also representative of the performance of the stock market in Kuala Lumpur.

Local Share Trading is the trading of shares, stocks, bonds and other investment products that occurs within the local share market.

Purchase Contract is a document that outlines the conditions for purchase of an asset. Once the purchase contract has been signed, it will constitute a binding offer from the Buyer to a Seller for the asset.

Sales Contract is a document that outlines the conditions for the sale of an asset. The Sales Contract will define all the terms of the sale of the asset.

SBL is a temporary loan of securities between the Lender and the Borrower. This system allows Traders to borrow shares that they do not already own, or to lend the shares that they do own but do not intend to sell immediately. The Lender will receive a lending fee from the Borrower. SBL can also be considered as a way to generate revenue from an idle asset.

Share Margin Financing is a revolving credit facility that allows Investors to finance their share trading and investment activities. Investors are able to buy shares on borrowed money, which is secured by an acceptable collateral.

The Share Market is the meeting place of share Buyers and Sellers. It is a share and stock exchange that allows Brokers to trade shares, stocks and other securities. In Malaysia, the share exchange is known as Bursa Malaysia. A company’s shares, stocks and other securities can only be bought and sold if it is listed on the exchange.

A Share Trading Account is required for an individual or company who wishes to trade in shares and stocks. A Share Trading Account can be both local and global, and must be opened with a financial institution which has been licensed to do so. Some brokerage fees are applicable, the amount varies depending on the different financial institutions.

Shariah Broking is the trade of shariah-compliant financial assets. This takes place in the Islamic Capital Market. Shariah Broking is defined by the principle of Mubarahah or profit sharing.

Trade Contract is a contract or a binding agreement between a Buyer and a Seller for an asset. In the financial services context, the asset could be stocks, shares, bonds or other investment products.