Page 32 - Introduction To Investment Management

Note: GII stands for Government Investment Issue and is another form of marketable government debt securities
issued by the Government of Malaysia to raise funds from the domestic capital market to finance the
Government’s development expenditure. GII is Islamic securities issued in compliance with Shariah
requirements and is an alternative debt instrument for the Government.
MGS – Malaysian Government Securities (Government Bond).
Source: Bank Negara Malaysia. FAQ: Government Investment Issues(GII) 2012

C. Shares

Investment in shares is a long-term investment. This is because the shares have

no maturity period, and it continues to exist if the companies still exist. Shares can be

divided into two types: ordinary (or common) shares and preference shares. Ordinary
share is a financial instrument that represents ownership of a company.

Common stockholders are the true owners of the company and have the right to

vote and determine the direction of the company in the future. Apart from having the
right to vote, they are also entitled to earn any dividends or profits of the company,

however, the dividends of ordinary shares are flexible due to company’s’ financial
performance.

In the situation where the company suffered a loss, the liability of shareholders is

limited to the number of shares they invested in. The ordinary shareholders will have the
right to make a claim on company’s property when all the debts have been settled.

Although common shareholders bear more risk than preference shareholders, they have

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