C3

• Role of Bank Negara Malaysia


  Issue currency. Arrange printing of currency notes and the minting of coins; issue, re-issue and exchange notes and coins at its office and at such agencies as it may, from time to time, establish or appoint; arrange for the safe custody of unissued stocks of currency and for the preparation, safe custody the money.

  
  

  Maintains reserves to safeguard the value of currency. Holdings in the form of gold, reserves position in various investments.
• 2) Role of bank negara malaysia

  iii. It acts as a banker and financial adviser to the government, manages the national debt and the raising of government loans, both locally and internationally, though well managed loan program.

  iv. It acts on behalf of government in dealing with borrowing money from external sources e.g in the issue of Malaysian Government Securities.

  v. It intervenes in the foreign exchange markets to stabilize the value of the

  Ringgit.
• 3) role of Bank Negara Malaysia

  vi. It supervises the banking system and promotes monetary stability and a

  sound financial structure.

  vii. It acts as a agent for the government in carrying out its monetary policies.
• Money markets: short-term, highly liquid debt securities, maturities of one year or less. Securities trade in large denominations, largely dominated by the major banks and financial institutions. E.g. Treasury Bills, Commercial Papers etc.

  Capital markets, markets for long-term debt and corporate stocks with maturities more than one year. Examples, bond, loan stock and shares. formed by security exchange that provides a forum for debt and equity transactions.
• Debt market. trading debt securities, holder receive fixed amount of money as interest. E.g. bond is a type of securities traded in debt market.

  Equity market. trading of shares, shareholders are owners of company. shareholder have dividend after debtholders receive their payments, e.g. common stocks.
• Spot markets. Financial assets are for " on the spot" delivery. Exp: Bursa Malaysia.

  Future markets. Financial assets for future delivery. Exp: Trading in Derivatives Market. Futures Trading and Options Trading.

  Primary markets: Securities offered for sale for first time. Investors purchases new securities. Exp: initial public offer (IPO). Net proceeds from sales of new securities go to issuing company.

  Secondary markets: market deals existing securities. Securities and financial assets traded among investors after issued by corporations.
• Different types of financial intermediaries:

  Commercial banks: Any person carries on business of receiving money on current or deposit accounts, paying and collecting cheques drawn by or paid in by customers, making advances to customers.

  Investment banks, help companies raise capital, design securities, buy from corporations, resell to savers, guarantees firms raise needed capital: underwrites.
• Diffrent types

  life/general insurance companies. Take savings in form of premium; invest funds in stocks, bonds, real estate, mortgages. Life insurance: payment paid upon death, maturity/surrender of policy.

  Lembaga Tabung Haji (LTH). Established in Agust 1969, promote & coordinate activities related to fulfilment of religious obligations by Muslims. manages funds largely comprise long term savings of prospective Muslims. Investments made with compliancy of Shariah.