A Preferential Stock is typically different from that of an ordinary stock. This is where the stockholders will receive dividends before the usual time frame of announcements of the ordinary stocks’ dividends. Preference Stock means that certain stockholders are given preferential treatment and in most cases come with a fixed dividend rate. If the company wound up, the distribution of assets of the company would first be given to the preference stockholders before the ordinary stockholders.

The Rights Issue is a type of privilege given to certain stockholders to buy stocks in a particular company which is usually below the market price. A Bonus Issue is the free issuance of stocks to a particular stockholder based on the numbers that particular stockholder currently hold. For example, if Ali owns 3,000 shares in company A, the bonus issue would be that he will be given an additional 3,000 more shares in Company A.
Derivatives is where you can trade certain securities that ‘derive’ their price from their parent company’s stock prices. Derivatives have 2 types known as Options and Warrants. Options involve 2 parties known as the writer or seller and the taker or buyer. This is where the writer (seller) writes the option and is then obligated to accept the sale while the taker (buyer) could exercise their right to buy or sell the stocks. They are not obligated in any way for the trade.

Warrants on the other hand usually ‘derive’ their price from the parent company’s stock prices. They are usually issued by financial institutions like banks and are normally classified either for investment or trading purposes.

What the stock market actually offer is a type of side income for individuals who deem their daily job income to be not enough. Apart from that it is also used as a separate investment stream for anyone which supposedly is better than that of the conventional investment schemes like fixed deposits and unit thrusts. There are fundamentals to investing in the stock market where this is concerned so the most important term here would be ‘stocks’ and ‘shares’ which basically mean the same thing.

The Malaysian Stock Exchange – Bursa Malaysia

Bursa Malaysia generally is the name of the Malaysian Stock Exchange and this is the authority that stipulates the rules, regulations and guidelines in share investments. There are currently more than 1,000 public listed companies in Bursa Malaysia that cut across various industries and sectors. They are either listed in the Securities Main Market or the ACE Market which were created to allow companies to ‘go public’ in order to raise more capital in their business operations.
Such an exercise is common among companies who after starting their businesses find themselves short of fund. If their business shows potential, they will then publicly ‘float’ the company whereby certain shares of the company are sold to the public. This is where IPO happens. IPO or Initial Public Offering is where the company announce intent to list the company and a Prospectus is released to the public that reports everything concerning the company. Once the company is listed, its shares could be traded in the market like any of the other public listed companies. The concept is simple, if you buy a share of a certain company, you are practically owning a part of the company which means you will get a share if the company profits and also bear part of the loses if it does.