Shares

A share is a security which represents a portion of the owner's capital in a business. Shareholders are the owners of the business and share the success or failure of the business. The performance of the business can often be measured by the amount of dividends shareholders receive and by the price of the share, quoted on the stock market. (Shares are also commonly referred to as stock).

The different types of shares which are traded on Bursa Malaysia include:

1. Ordinary Shares

   Also called equity shares, this is the risk capital of a company. Ordinary shares give holders the rights of ownership in the company, such as the right to share in the profits, the right to vote in general meetings and to elect and dismiss directors. Obligations of ownership are also conferred and this may result in the loss of an investor's money if the company is unsuccessful. Ordinary shares usually form the bulk of a company's capital and have no special rights over other shares. In the event of liquidation, ordinary shares rank after all other liabilities of the company.

2. Preference Shares

   These are shares which carry the right to dividend (normally fixed) which ranks for payment before that of ordinary shareholders. Preference shares may be preferred also as regards to distribution of assets upon dissolution of the company. 

   Preference shares generally carry no voting rights, but voting rights may be made contingent upon failure to pay dividends on preference shares for a certain period of time.