Investment Management. According Husnan (2003) is a market for long-term financial instruments that can be traded, either in the form of debt or equity capital, both published by the government, public authorities, and private companies. According to Usman (1990:62), securities are generally traded in the stock market can be categorized into debt securities and securities that are holdings. Debt securities commonly known name of the bonds and securities are known as stock ownership. Furthermore it can also be defined that is evidence of the recognition bond debt of the company, while the stock is a testament to the inclusion of the company.
Understanding the stock market in general is an organized financial system, which includes commercial banks and all institutions in the field of financial intermediaries, as well as the overall securities outstanding. In a narrow sense, the stock market is a market (where, in the form of the building) who is prepared to trade stocks, bonds, and other types of securities with the services of the brokerage (Sunariyah, 2000: 4). Judging from the above understanding of capital markets, it is clear that the capital market is also one way for the company to raise money by selling the company's ownership rights to the public.
Investment and Capital Market Actors
Today, have developed a model in making decisions about investment proposals that are within a portfolio, where the proposed new project is linked with other projects that exist in a company. Investment projects that have no independent risk Awat (1999: 276).
Profit expectations of a portfolio is a weighted average of expectations of comparable securities gains in the portfolio. The main players involved in capital markets and supporting institutions that are directly involved in the transaction process between the major players as follows Kasmir (2001: 183-189):
1. Issuers.
Company that will conduct the sale of securities or to issue in exchange (called the issuer). In conducting the emissions, the issuer has a different purpose and it is usually stipulated in the shareholders' general meeting (AGM), among others:
- Business expansion, capital obtained from investors will be used to expand the business, market or capacity expansion.
- Improve the capital structure, balance between their own capital to foreign capital. c. Hold a shareholder transfers. The transfer of the old shareholders to new shareholders.
2. Investors.
Investors who would buy or invest in companies that perform emissions (called investors). Before purchasing the securities offered, investors usually do some research and analysis. This study includes the bonafides company, the issuer's business prospects and other analyzes. The main purpose of the investors in capital markets, among others:
- Getting a dividend. Addressed to the benefits to be gained in the form of interest paid by the issuer in the form of dividends.
- Ownership of the company. The more shares owned by the greater utilization (control) firms.
- Trade. Resell the shares at high prices, their hope is in stock that can actually increase the profits from the sale of its shares.
3 Supporting Institutions.
Supporting institutions function, among others, contribute and support the operation of capital markets, making it easier for both issuers and investors in a variety of activities related to capital markets. Supporting institutions that play an important role in the capital market mechanism is as follows:
- Underwriters (underwriter). Institutions that guarantee terjualnya stock / bond until a certain time limit and can obtain the desired fund issuers.
- Securities brokerage (broker / brokers). Mediation in the sale and purchase of securities, the intermediary between the seller (issuer) to the buyer (investor). The activities carried out by the broker include the following: Provide information about the issuer and selling securities to investors Conduct
- Trading of securities (dealer), serves as: 1) Traders buy and sell securities 2) As an intermediary in the sale and purchase of securities Insurers (guarantor). Intermediary institutions between the donor confidence by the recipient trust. Institution that is trusted by investors before the funds invest.
- Trustee (trustee). Trustee services required as a guardian of the donor mandate (investor).
- Trustee activities include: 1) Assess the issuer's property 2) Analyze the ability of the issuer 3) Conducting supervision and development of the issuer 4) To advise to the investors in matters relating to the issuer 5) Monitor the payment of bond interest and principal 6) To act as paying agent
- Company's securities (securities company). Specializes in trading securities listed on stock exchanges. Activities of securities firms, among others: 1) As a stockbroker 2) Guarantor emissions 3) Intermediary trading securities 4) Management of funds
- Fund management company (investment company). Managing the securities that will benefit in accordance with the wishes of investors, consisting of two units, namely as a fund manager and depositors.
- Effects of the administration office. Offices that assist issuers and investors in order to facilitate its administration. 1) To assist the issuer in order to emission 2) Carry out activities to store and transfer rights to the shares of investors 3) To help compile a list of shareholders 4) Prepare correspondence to the shareholders of the issuer 5) Make the necessary reports
Types and Functions of the Capital Market
Capital market can be divided into two, namely the primary market and secondary market:
1. Primary Market (Primary Market)
Primary Market is the first offering of the issuer to the investor during the time set by the issuer (issuer) before the shares are not traded in the secondary market. Usually within a period of at least 6 working days. Stock prices in the primary market ditetukan by underwriters and the companies that went public based on fundamental analysis of companies concerned.
In the primary market, the company will obtain the necessary funds. Companies can use the bond proceeds fund to develop and expand the capital goods to produce goods and services. Moreover, it can also be used to pay off debts and improve the structure of business capitalization. The stock price remains the primary market, the authorities are underwriters and brokers, commissions are not subject to bookings made through sales agents.
2. Secondary market (Secondary Market)
The secondary market is where the transaction of shares among investors after a share offering in the primary market, not later than 90 days after permission is given then the emission of these securities must be listed on the stock.
With the secondary market investors can buy and sell securities at any time. While the benefits for companies, secondary market are useful as a place to gather institutional investors and individuals.
Secondary market stock prices fluctuate according to market expectations, the authorities are brokers, the burden of commissions for the sale and purchase, ordering is done through exchange members, the period is unlimited.
Place the secondary market in two places, namely:
- Regular Stock Exchange is the regular official exchanges such as the Jakarta Stock Exchange (JSX) and Surabaya Stock Exchange (SSX)
- Parallel or parallel Stock Exchange over the counter is a system of organized securities trading outside official exchanges, to form the secondary market are regulated and organized by the Trade Union Money and Securities (PPUE), supervised and trained by Bapepam. Over the counter for a meeting between the seller and the buyer is not done in a certain place but are scattered among the offices of the broker or dealer.
Function of the Capital Market
Meeting place for those who have more money (lenders) to the parties that require long-term funds (the borrower). Capital markets have two functions, namely economics and finance. In the economy, capital markets provide the facility to transfer funds from the lender to the borrower.
Invest funds with lenders expect any return or return of the fund transfer. As for the borrower, the presence of external funds can be used for their business development efforts without waiting for funds from the company's operating results. In finance, by providing the necessary funds by the borrower and the lender without having to be directly involved in the ownership of real assets
