There are several investment instruments where people are
more familiar with gold or property. However, not many people know about
investment options through the capital market.
By choosing to invest using the capital market or capital
market, it does not only provide opportunities for the public to gain profits.
However, it also plays an active role in improving domestic economic conditions.
The capital market is an activity related to public
offerings and securities trading, public companies related to the securities
they issue, as well as institutions and professions related to securities.
Meanwhile, according to Bruce Lloyd, the capital market acts
as a liaison between investors and companies and government agencies through
trading in long-term instruments such as bonds, stocks, and others.
History of the Capital Market
Securities transactions have been going on since 1880, but
according to the book "Effectengids" published in 1939 by Vereniging
voor den Effectenhandel, they were done without a formal organization so that
records of these transactions are insufficient. A company called Dunlop &
Koff, the ancestor of PT. Prime, was established in 1878 for the purpose of
community and securities trading.
It was only in 1912, on December 14, the Amsterdamse
Effectenbueurs opened a stock exchange branch for the first time in Indonesia,
which was located in Batavia (Jakarta).
This capital market is the fourth oldest for the Asian level
after Bombay, Hong Kong, and also Tokyo. In the beginning why the Dutch
government set up a stock exchange in Batavia was because at the beginning of
the 19th century various plantations were being developed on a large scale.
In order for the development process to run well, the Dutch
colonial government of course needed capital. So one of the sources of capital
used at that time was savings from Europeans and also the Dutch who had incomes
above the average.
Based on this, this market was formally founded on December
14, 1912, under the name Vereniging voor de Effectenhandel. The name of the
organization is Securities Trading Association in Indonesian. Stocks and bonds
are exchanged in this market, which is situated in Batavia
Capital Market Function
• Capital market as a means of increasing capital for
businesses
Companies can obtain funds by selling shares to the capital
market. These shares will be purchased by the general public, other companies,
institutions, or by the government.
• The capital market as a means of equalizing income
After a certain period of time, the shares that have been
purchased will provide dividends (part of the company's profits) to the buyers
(owners). Therefore, the sale of shares through the capital market can be
considered as a means of equalizing income.
• Capital market as a means of increasing production
capacity
With the additional capital obtained from the capital
market, the company's productivity will increase.
• The capital market as a means of creating employment
The existence of the capital market can encourage the
emergence and development of other industries which have an impact on the
creation of new jobs.
• The capital market as a means of increasing state revenues
Any dividends distributed to shareholders will be taxed by
the government. The additional income through this tax will increase state
revenue.
• The capital market as an indicator of the country's
economy
The increasing (dense) activity and volume of
sales/purchases in the capital market indicates that the business activities of
various companies are running well. Vice versa.
Capital Market Investment Instruments
The capital market is also known as the stock exchange. In
it, you can find various types of securities that are traded every day. These
types of securities include:
• Share
Shares are securities that are proof of ownership of a
company. Investors who own shares in a company are entitled to receive
dividends or profit sharing.
• Mutual funds
Mutual funds are known as investment instruments that serve
as a vehicle for collecting and managing the funds of several investors. These
funds are then managed by investment managers into various instruments, such as
money markets, bonds, stocks or other securities.
• Debentures or bonds
Bonds are another type of security that is available on the
capital market. Debt securities have transferable ownership and the right to
interest payments and debt repayment at a defined time.
• ETFs, or exchange-traded funds
Since both of these securities and mutual funds are compiled
collectively, they are truly comparable. EFT can be traded on the stock
exchange exactly like equities, that's all.
• Alternatives
There are securities in the form of derivatives as well.
These securities are referred to as derivative shares. The Indonesian capital
market offers two different forms of derivatives: rights and warrants.
Capital Market Benefits
The capital market has benefits for issuers (Parties
conducting Public Offerings, namely Securities offerings made by Issuers to
sell Securities to the public based on procedures regulated in applicable laws
and regulations), as well as for investors.
Capital Market Benefits for Issuers
- The amount of funds that can be collected is large
- The funds can be received all at once when the primary market is over
- There is no convenant so management can have more freedom in managing funds/companies
- High company solvency thereby improving the company's image
- The dependence of issuers on banks is becoming smaller
- Capital Market Benefits for Investors
- Investment value grows following economic growth. This increase was reflected in the increase in share prices which achieved capital gains
- Obtain dividends for those who own or hold shares as well as floating interest for bondholders
- Can simultaneously invest in several instruments that reduce risk
Bonds as a Profitable Investment Product
If you are new to investing, maybe you can consider bonds as
the best investment product. Indeed, bonds do not have the popularity of stocks
as an investment product, but bonds can be your entry point to start investing
which can increase your income while you are still productive at work.
As an introduction, bonds are an investment product that can
be found in the capital market. Bonds are in the form of debt statements issued
by related parties, usually coming from the government or corporations, but can
also be issued by individuals. Bonds as the best investment product can also be
applied to both long-term and short-term investment types, because they usually
have maturities ranging from 1 year to 10 years.
Bond investment holders will usually be given a sign of
ownership in the form of coupons or interest. If you choose bonds issued by the
government or corporations, you will usually receive coupons which will be
given periodically. This coupon is proof or a sign of the profit you have when
investing in bonds. The advantage of getting a steady income makes bonds one of
the best investment products you can have.
As a CIMB Niaga customer, you also have the opportunity to
implement your best investment plan in the form of bonds. As one of the best
investment products, bonds at CIMB Niaga offer benefits in the form of periodic
coupon income, potential increase in your initial capital, as well as your data
as a registered investor with a custodian bank to provide you with security. In
addition, bond transactions at CIMB Niaga can also be done online via OCTO
Mobile & OCTO Clicks, making it easier for you to invest. What are you
waiting for? Immediately find the complete info and start investing here.
Comments
Post a Comment