Page 13 - Introduction To Investment Management

potential and attractive according to their financial capability. At the same time,
households also make financial planning for their retirement by allocating part of their

income in retirement schemes or unit trust that set up by government or corporate.

Nevertheless, some of them are also more interested in stocks, bonds and
financial instruments that have higher return with higher risk. Thus, this situation

depends on the consideration of household willingness to accept risk on their investment.
Hence, there are so many financial instruments either conventional or Islamic with various

features today as to attract households to make fair judgments on investment.

ii. Business/Private Sectors

If the household sector is more focused on the question of where and how to
invest their money, businesses are more focused on how and where they can obtain

financial resources to fund their business. Capital funding is needed to build factories, buy
machinery and equipment, paying wages and salaries of workers and allow their business

operations running smoothly.

In the company's efforts to get their capital, they have a number of approaches
which - to borrow capital from a finance company / bank or issue a mortgage and bonds.
Another method is to issue shares by taking new partners. The objective for issuance of

shares by the company is to get the best price for the securities issued and also has a

lower cost of capital as compared to bank loan. Table 1 shows the components of shares,
warrants and other debt securities issued by various private sectors in Malaysia for the

year 2013 and 2014 (Source: Bank Negara Malaysia and Kementerian Kewangan Malaysia
– Malaysia Economy First Quarter 2014 report).

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