Financial Investment Tools

Financial Investment Tools

Securities are one of the main instruments that are dealt with in the financial market. The securities represent an instrument that gives the holder the right to obtain part of the return or the right to part of the assets of the company or the two rights together. The securities are issued by economic institutions whatever the nature of their activities. Securities take many forms, including stocks, bonds, and derivatives.
This topic will be addressed in the following:

  • shares;
  • bonds;
  • Financial derivatives.
    First requirement: shares
    Stocks constitute one of the instruments of financial investment, including several characteristics and types that are addressed through the following points:
  • definition of shares and their characteristics;
  • Stock types.
  1. Definition of shares and their characteristics
    Stocks have several definitions and characteristics that can be listed as follows:
    Definition of shares
    Shares are defined as long-term securities, or Sukuk, which have the right to common shares in the share capital of the issuing company, allowing the owner to become a proportionate partner in the company. These securities are also a major financing instrument for the formation of the capital of the money company.
    A share is the right of the shareholder in Amwal Company, which is the instrument that proves this right and is negotiable according to the rules of the commercial law. To receive a portion of the company’s profits when liquidated due to expiration.
    It is also defined as a deed that proves to its owner the right to a common share in the ownership of the net assets of a joint-stock company or a stock recommendation, and, as the case may be, guarantees the right to receive a share of the company’s profits commensurate with his shares, and the liability of the shareholder shall be limited to the extent of his shares.
    Through the above definitions, it can be said that stocks are long-term securities, which enable the holder to take a share of the capital of the issuing company, in addition to a part of the dividends from the profits. These securities are tradable in the stock market. These securities are a tool to form the capital of the company or to raise its capital when the institution needs financing. This paper also allows obtaining privileges such as membership in the general assembly of shareholders.
    Each of them is characterized by a nominal value, book value, and market value.

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