investasi--pengenalan

7/28/2019 Investasi--Pengenalan

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Chapter 13

THE INVESTMENT SETTING


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Chapter 1 Questions

What is an investment ?

What key issues should investors

always consider?What types of investments can onemake?


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An investment is the current commitment

of resources for a period of time in the

expectation of receiving futureresources greater than the current

outlay.


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Is hiding money in a

mattress or keeping

it in a piggy bank aninvestment ?

No! The safe-

keeping of money

does not involve anyexpected

compensation.


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WHY DO WE INVEST ?

(JONES)To improve our welfare

To manage our wealth effectively


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REASONS FOR INVESTING

(Reilly and Norton)Income: investments are made in thehopes of generating income.

Capital preservation: investments aremade with the goal of preservingcapital, or the original value.

Capital appreciation: investments aremade so that funds will appreciate, orgrow in value, to provide for a futureneed such as retirement or childrens

college education.


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Issues That Investors

Should Always ConsiderThere is a trade-off between risk andexpected return.

Developed financial markets are nearlyefficient.

Focus on after-tax returns, net of

expenses.Diversify across asset types, industries,and even countries.


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Risk-Return Trade-Off

Because investors tend to be risk averse,

it makes sense that they will only take

on riskier investments if they expect toearn more than with lower risk

investments.


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Market Efficiency

An efficient market is one where Information is quickly and accurately reflected in

asset prices,

So What appears to be news is not useful in

predicting future asset prices,

With the result that Investors cannot systematically and consistently

beat the market without the aid of either insideinformation or loads of luck.


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Implications of Market

EfficiencyIts what is unexpected that moves the

market (the genuinely new information

in news).We should be skeptical of investment

strategies that claim to be able to beat

the market on a consistent basis.


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The Paradox of Market

EfficiencyIf markets areperfectly efficient, itmakes no sense toseek out superiorinvestments.

But if nobody seeksout superiorinvestments, themarket would notremain efficient!


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Take Taxes and

Expenses Into AccountIts what you get to keep that counts!

Taxes affect investment decisions

Some allow for lower or no tax burden

(Municipal bonds)


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Diversify, Diversify,

DiversifyDont put all of your

eggs in one basket!

Diversificationreduces risk without

necessarily

sacrificing expected

return.

Its a no-brainer!


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What types of

investments can one

make?Real assets vs. Financial assets

Tangible assets vs. Claims on assets

Direct vs. Indirect financial investments

Individual securities vs. pools of assets

Derivatives

Futures, options


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TYPES OF INVESTMENTS

Investments

Financial Assets

Real Assets

Investor Aset-AsetFinansial

Persh. InvestasiII DI

DI


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Financial Markets

Financial

Markets

Foreign Exchange

Market

Derivatives

Traditional

Financial

Markets

(Long-term)Capital

Market

(Short-term)Money

Market

T-Bills

CDCP

BA

Repos/Reverses

Federal funds

LIBOR market

Bonds

Stocks

T-Notes/BondsMunicipal bonds

Corporate Bonds

ABS/MBS

Whole sales market

Retail market

Forward

FuturesOption

Swap


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Performance by market sectors


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Risk vs. Return by market sectors


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Represent the performance of the stock market as a

whole, e.g., DJIA, S&P500, Wilshire 5000, etc.

Useful to track average returns of the stock market

Useful as a benchmark for the performance of fund managers

Used as base of derivatives

Many kinds of stock indexes exist

Representative? Broad or narrow? How is it weighted?

Price-weighted index

Dow Jones Industrial Average (30 blue-chip stocks)

Market value-weighted index Standard & Poors 500, NASDAQ Composite, Wilshire 5000

Equally weighted index

Value Line Index

Stock Indexes


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Basic Investment

PhilosophiesIn forming an investment portfolio, several

questions are paramount:

In what types of securities should I invest? Asset Allocation

Within each security type, how do I selectwhich assets to purchase?

Security SelectionFinally, how active should I manage myportfolio? Should I be an active or passive investor?


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Ethics in Investments

Financial markets are vitally important to a

well-functioning economy.

Trust in information and faith in fairness areessential.

Codes of ethics for financial professionals

and strict regulations attempt to create such

an environment where financial markets canefficiently fulfill their economic function.


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Jobs in Investments

Sales Registered representative of a brokerage firm

Financial planners

Investment Analysis and PortfolioManagement Brokerage firms, banks, money managers, mutual

fund managers, insurance companies

Professional Designations Chartered Financial Analyst (CFA)

Certified Financial Planner (CFP)


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How firms issue securities?

Primary Markets

New securities are issued to the public For stocks

Initial public offerings (IPO)

Seasoned equity offerings (SEO)

For bonds Public offering

Private placement

Issuer receives the proceeds from the sale

Secondary Markets Subsequent trading occurs, where existing

owners sell to another party

Issuing firm is not directly involved24


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How Firms Issue Securities

Investment Banking

Shelf Registration

Private Placements

Initial Public Offerings (IPOs)


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Investment Banking (IB) IBs are specialized in advising and marketing public offerings of

stocks or bonds, and are called underwriters An underwriting syndicate is formed to share the responsibility of large

offerings

IBs provide services such as valuation, marketing plan, roadshow,bookbuilding, pricing, allocation, and price support in

aftermarkets IBs tend to offer a bargain price to induce potential investors to submit

their interest in the bookbuilding process

This tendency commonly causes underpricing of IPOs, which isreflected in price jumps occurring on the first date of trading (New

Issue Puzzle)

Besides underwriting fees of about 7%, such underpricing is animplicit cost to the issuing firm

Highly expensive for small firms, and internet IPOs introduced

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I t t B ki


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Investment Banking

Arrangements

Underwritten vs. Best Efforts

Underwritten: firm commitment on proceeds

to the issuing firm

Best Efforts: no firm commitment

Negotiated vs. Competitive Bid

Negotiated: issuing firm negotiates terms with

investment banker Competitive bid: issuer structures the offering

and secures bids


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Figure 3.1 Relationship Among a Firm

Issuing Securities, the Underwriters and

the Public


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Shelf Registrations

SEC Rule 415

Introduced in 1982

Ready to be issued on the shelf

P i t Pl t


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Private placement: sale to a limitednumber of sophisticated investors notrequiring the protection of registration

Dominated by institutions Very active market for debt securities

Not active for stock offerings

Private Placements


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Initial Public Offerings

Process

Road shows

Bookbuilding

Underpricing

Post sale returns

Cost to the issuing firm


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Secondary Markets

Organized exchanges

OTC market

Third market

Fourth market


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Organized Exchanges

Auction markets with centralized order flow NYSE, AMEX, and regional exchanges

Listing requirements

Dealership function by Specialists at NYSE Have exclusive right to make the market in a

specified stock on the NYSE

Must maintain a fair and orderly market

Can be competitive or assigned by the exchange

Traded securities:

stock, bonds, futures, options contracts33


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OTC Market

An informal exchange of brokers and dealers negotiatingtrades, without centralized order flow

NASDAQ: largest OTC market since 1971 Computer-linked system providing information on dealers

quotation of bid and ask prices

Nasdaq National Market System Nasdaq SmallCap Market

Lower volume securities

OTC Bulletin Board

Pink Sheets from NASD

Traded securities: Stocks, bonds and some derivatives

Most secondary bonds transactions


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Third Market

Trading of exchange-listed securities

away from the exchange

Institutional market, facilitating trades oflarger blocks of securities

Involves services of dealers and brokers


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Fourth Market

Investors trading directly with other investors

Originally developed for institutional trading

Technological developments lead to individualinvestors trading directly, without the need of

market makers Advent of ECN

Computer networks allowing direct trading

Captures about 30% of the trading volume forNASDAQ-listed stocks in 2001

Competing with Nasdaq and NYSE for volume Implication of future structure of stock exchanges

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How to place an order?

Instruct your broker the following orderspecification Online vs. offline

Name and type of the security to trade

Indicate a purchase or sale

Order size round lots vs. odd lots

Order type market vs. limit orders, etc.

Length of time of the order

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Types of Orders

Market order Buy or sell orders are to be executed immediately at thebest price currently available

Limit order

Specify prices at which buy or sell orders are executed Stop-loss order

Sell stocks when price falls below a stipulated level

This is to stop further losses from a long position

Stop-buy order Buy stocks when price rises above a stipulated level

This is to limit potential losses from a short position


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Costs of Trading

Brokerage commission Fees paid to broker

Full-service vs. discount broker

Explicit cost of trading

Bid-ask spread: implicit cost of trading Bid: price that a dealer is willing to buy from you

Ask: price that a dealer is willing to sell to you

Typically, Ask > Bid

and the difference ask bid is called as bid-askspread, which is dealers gain for the market-making service


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Margin Trading

Only a portion of the investment proceed comes from your

own money Remaining portion is borrowed from a broker

Bet on a rise in the price of the security

Higher leverage, magnifying upside and downside risks

Stocks purchased on margin must be maintained with the broker ascollateral for the loan

Initial margin Currently 50%, set by the Fed

You can borrow up to 50% of the stock value

Maintenance margin: Minimum amount of equity maintained in the account

Margin call: call from a broker to put up more equity funds

Margin arrangements differ for stocks and futures

M i T di


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Margin Trading

Initial Margin

X Corp. $70 current price

1,000 Shares Purchased

50% Initial Margin

40% Maintenance Margin

Initial Position

Stock $70,000 Borrowed $35,000Equity 35,000

M i T di


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Margin Trading

Maintenance Margin

If stock price falls to $60 per share,

New Position

Stock $60,000 Borrowed $35,000

Equity 25,000

Margin (%) = Equity in account / Value of stock

= $25,000 / $60,000 = 41.67%

Rate of return = (25,000 35,000)/35,000 = -28.57%

Rate of return if own money of $35,000 is used to buy 500 shares

= (30,000 35,000) / 35,000 = 14.28%


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Margin Trading

Margin Call

How far can the stock price fall before getting amargin call?

Margin (%) = Equity in account / Value of stock

= (1,000P - $35,000) / 1,000P = 40%

P = $58.33

If stock price falls below $58.33, one gets a margin call


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Short Sales

Opposite case of the margin purchase, i.e., only a portion ofthe securities are supplied by the seller

Remaining portion of the securities are borrowed from a broker

Bet on a decline in the price of the security

Higher leverage, magnifying upside and downside risks

The proceeds from the short sale must be maintained with the brokeras collateral

Mechanics

Borrow stocks from a broker

Sell it, and deposit the proceeds and margin money in an account

Close out the position by buying the stock and returning it to the lender

Short-seller must pay any dividends paid during the short sale to thelender of the stock


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Struktur Pasar Modal Indonesia

Bapepam ( Badan Pengawas Pasar Modal )

Melakukan pembinaan, pengaturan dan

pengawasan harian kegiatan pasar modal,dgn tujuan mewujudkan terciptanya kegiatan

pasar modal yang teratur, wajar dan efisien


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Bursa Efek Jakarta (BEJ)

- Pertama kali berdiri, Bapepam sbg pengelola- Setelah itu diserahkan kepada lembaga

swasta PT. BEJ

- Sekarang menggunakan Jakarta Automated

Trading System (JATS), sistem perdagangan

efek berbasis komputer.

- Tiga bentuk pasar dalam BEJ:

1. Pasar reguler: sistem tawar menawar, jumlahminimal 500 lembar ( 1 lot )


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2. Pasar Non Reguler

Sistem negoisasi dibedakan dlm 4 jenis:a. Perdagangan block sale: minimal 200 ribu saham/ 400

lot

b. Perdagangan odd lot: kurang dari 500 lembar

c. Perdagangan tutup sendiri: transaksi jual beli yg

dilakukan oleh satu pialang dalam jumlah dan hargayang sama

d. Perdagangan porsi asing untuk saham yang porsiasingnya telah mencapai 49%

3. Pasar Tunai

Negoisasi langsung dgn tunai. Diperuntukkan bagi pialangyang gagal menyelesaikan transaksi pada pasarreguler atau non reguler


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PT. Kliring Deposit Efek

Indonesia

Berfungsi untuk merancang,

mengembangkan dan mengoperasikan

mekanisme kliring dan penyelesaian

transaksi efek (settlement, penyerahan

barang/uang) sehingga aktifitas dapat

efisien.


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Lembaga Penunjang Pasar

Modal

1. Bank Kustodian

2. Wali Amanat

3. Biro Administrasi Efek


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Profesi Penunjang Pasar

Modal

1. Akuntan Publik

2. Notaris

3. Konsultan Hukum4. Perusahaan penilai (appraiser)

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