Capital Market

Do not worry if your investments have decreased in value, this does not necessarily mean any abuses or mistakes by your brokerage company. This could be due to normal market fluctuations. Remember, investing in the Stock Market involves risk, and there’s no guarantee of always making money. The Stock Market is a two-way street, with both potential gains and losses.

Some investors in the market follow this investment policy but sometimes it does not represent a successful policy. A better approach is to buy undervalued stocks in solid companies but avoid buying just any stock that is dropping.

  • Coupon Value

A set amount of profit per share distributed to stockholders annually

  • Earnings multiplier

Compares the current share price of a company with its per-share earnings

  • Highest Price

Indicates the highest point the stock reached in terms of price during trading session.

  • Lowest price

Indicates the lowest point the stock reached in terms of price during trading session

It is a digital tool coupled with the electronic editor and has a distinctive character that allows the identification of the person who signs and distinguishes his signature from others. It is used to conduct any process that requires proof of signatory’s identity. In addition, it is used in online financial, commercial and administrative transactions as well as in some e-government services such as e-signature on tax forms, banking transactions, online trading and others. It is a power of handwritten signature to provide data protection and inability to deny or falsify.

Certain actions taken by securities companies represent abuses and violations of the legislations governing Capital Market.

These include:

  • Brokerage Company recommends an investment that doesn’t align with your investment goals, risk tolerance, or financial situation
  • Brokerage Company deals on your account by selling or buying without your knowledge.
  • Brokerage Company executing transactions that do not match your orders.
  • Brokerage Company refrains from executing your orders without giving any real reasons or motives causing you financial losses.
  • Brokerage Company hides crucial details of an investment, hindering your ability to make informed decisions and potentially leading to financial losses.
  • Brokerage Company includes charges for fees or commissions not stated in your contract, even though they have no legal justification to do so.
  • Brokerage Company promises guaranteed protection from losses in the market.
  • Brokerage Company provides financing options for clients to buy securities outside of margin trading
  • Brokerage Company unduly distinguishes one of its clients from the rest of the clients, thereby incurring losses.
  • The broker does not pay the utmost care to secure the best possible outcomes for your investments, potentially leading to financial losses.
  • Trading on insider information
  • Using manipulative schemes to affect stock prices during buying or selling

Dear investor upon taking your decision to start investing in securities, you need to follow some procedures that put your decision into practice. Therefore, you need to be well aware of the nature of the institutions that act as financial broker and the basic principles of stock trading

  • Brokerage Companies

Investor in the Stock Exchange must ensure that the brokerage company is licensed by the Financial Regulatory Authority which protects him from manipulation of some companies that rely on improper practices. Brokerage companies shall provide data and information about listed companies if they have a licensed research unit which helps the investor to make a wise investment decision.

  • Second: Portfolio Management Companies

You can choose one of the licensed Portfolio Management Companies if you do not have enough time to follow up on your investments or when you lack the knowledge or experience to make investment decisions.

  • Mutual Funds

Mutual funds are established through banks or insurance companies after FRA’s approval. One of the specialized investment fund management companies licensed by the Authority shall manage these funds. Small investors, especially those who lack knowledge and experience in stock market often turn to investment funds.

Consider spreading your risk.

Some may advise you to concentrate your investments in a single security with a continuous high market price to maximize market profit.  Dear investor you should know that listening to such advices might cause serious losses. Therefore, spreading your investments around (diversification) is a safer way.

There are some misconceptions about the Stock Market and some wrong practices done by brokerage companies. These issues may lead to confusion, ambiguity, inconsistency of information and huge problems that even hinder the smooth functioning of Capital Market.

Do not believe this saying. The most reliable way to make money in the Stock Market is through careful and thoughtful investing. So, study the market and invest wisely. On the contrary, listening to and exploiting insider information, even if it is true, and listening to rumors ultimately leads you to speculation that may lead to huge losses.

Stock Market makes you the owner of part of the company in which you buy shares and you have all the rights and obligations of the owner towards the company. The main purpose of trading in the Exchange is to invest your savings for future to achieve your life goals.

If you decide to limit your transactions to buying and selling quickly in the hope of achieving quick gains, then, this is speculation and you may experience significant losses, especially if you are a small investor who is not familiar with investing in the Exchange, its nature and risk.

So, do not fall prey to those who convince you that speculation is the only way to gain, but wise and sound long-term investment has a clear impact and benefits and helps you realize your dreams and those of your family. Just make sure you follow the wise investment steps.

This concept is wrong because anyone with some savings can invest in the Stock Market. So, if you are comfortable researching and managing your investments, you can open an account with a brokerage firm. They will provide you with info and tools to make informed decisions.  However, if you are a beginner and have no time to follow upon on your investments, you can consider mutual funds managed by licensed investment manager. If you have significant assets, you can consider portfolio management companies which invests on your behalf.

Dear Investor: There are number of steps you should follow to maximize your returns and minimize risk.

You must know that understanding these steps and procedures is crucial before you start taking your investment decision, as it will set the foundation for your investment journey

Investment success often stems from a combination of sharp market analysis and meticulous stock selection.

–   Avoid brokerage companies that lack qualified staff

–   Do not rely on technical and financial studies that adopt rumors and incorrect trends.

–   Do not make an investment decision that does not fit your investment objectives.

–   Do not follow a brokerage company that resorts to pressure you to carry out operations to bring benefit to the company regardless of your benefit.

–   Don’t engage with firms asking you to violate Capital Market Regulations.

–   Carefully consider all options before selecting a Brokerage Company or Portfolio Management Company

–   Explore all avenues for growing your investment.

–   The market dictates gains and losses, regardless of your broker’s expertise.

–    Diversifying your investments reduces investment risk.

–    Don’t forget to schedule a monthly review of your brokerage account statements to monitor your balance and track all your investment activity.

If you have a complaint against a brokerage company or one of its employees, you must submit a written complaint to the Financial Regulatory Authority (FRA) or register it on complaint’s form issued on FRA’s website for this purpose. One of FRA’s employees operating in Complaints and Grievances Department shall review and study your complaint.

Last modified: April 7, 2024

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