The document discusses various aspects of investment securities, including the role of the Johannesburg Stock Exchange (JSE) in facilitating business investments, types of investments (short-term vs long-term), and detailed descriptions of different investment methods such as angel funding, venture capital, and unit trusts. It explains the benefits and characteristics of preference shares, ordinary shares, bonus shares, and government retail bonds, along with the concepts of returns, dividends, and interest types. Emphasizing the importance of professional management and diversification in investment strategies, it highlights how businesses can raise capital and enhance economic growth.

1. INVESTMENT SECURITIES
BUSINESS INVESTMENT OPPORTUNITIES

2. WHAT IS THE MEANING OF INVESTMENT?
WHY DO BUSINESSES INVEST?
HOW CAN BUSINESSES INVEST?

3. JOHANNESBURG STOCK EXCHANGE (JSE)
• IS A FORMAL MARKET THAT ALLOWS PEOPLE AND ORGANISATIONS TO BUY AND
SELL SHARES IN AN ORGANISED AND CONTROLLED MANNER FROM LISTED
COMPANIES
• CONSISTS OF STOCKBROKERS (THE MIDDLE MAN)
• THEY ADVISE THE CLIENTS WHEN AND WHICH SHARES TO BUY AND SELL
• THEY ORGNISE ALL THE PAPERWORK
• THEY CHARGE A BROKERAGE FEE

4. FUNCTIONS OF THE JSE
• CREATES OPPORTUNITIES FOR BUSINESSES TO RAISE CAPITAL
• PUTS REGULATORY PROCEDURES IN PLACE FOR BUYING AND SELLING IN A FREE
TRADE ENVIRONMENT
• IT EHNANCES JOB CREATION AND INCREASES ECONOMIC GROWTH AND
DEVELOPMENT

5. TYPES OF INVESTMENTS
BUSINESS INVESTMENTS

6. …………CONTINUATION………..
SHORT-TERM INVESTMENTS
• ALLOWS A BUSINESS TO ACCESS ITS
MONEY WITHIN A SHORT PERIOD OF
TIME.
• THE RETURN ON INVESTMENT (ROI) IS
NOT GOOD AS THE LONG TERM ONE
• EXAMPLES INCLUDE : BANK SAVINGS
ACCOUNT
LONG-TERM INVESTMENTS
• BUSINESSES GETTER A BETTER
INVSETMENT IN THE LONG TERM BUT
DO NOT HAVE ACCESS TO THE
MONEY IN THE SHORT TERM
• EXAMPLES INCLUDE: FIXED DEPOSIT
ACCOUNTS

7. …………..CONITINUATION………….
ANGEL FUNDING
• A START UP CAPITAL PROVIDED BY
ENTREPRENEURS IN EXCHANGE FOR A
SHARE IN THE BUSINESS
• WEALTHY ENTREPRENEURS WHO
OFFER FINANCING IN EXCHANGE FOR
A SHARE
VENTURE CAPITAL
• AMOUNT OF MONEY PROVIDED TO
START A BUSINESS OR EXPAND A
BUSINESS IN RETURN FOR SHARES IN
THE BUSINESS.

8. TYPES OF SHARES
PREFERENCE SHARES
• SHARES THAT ARE PAID OUT BEFORE
ANY OTHER SHARES
• DIVIDENDS ARE PAID TO THE
SHAREHOLDER AT A FIXED RATE
• THERE ARE NO VOTING RIGHTS BUT
GAURANTEED SPECIFIC PERCENTAGES
ON THE COMPANIE’S PROFIT
ORDINARY SHARES
• SHARES THAT ARE PAID OUT
ACCORDING TO THE PERCENATAGE
OWNERSHIP IN THE BUSINESS, AND
AFTER THE EARNINGS ON
PREFERENCE SHARES ARE PAID OUT
• THERE IS NO GAUARANTEE FOR
DIVIDENDS BUT SHAREHOLDERS ARE
ALLOWED TO VOTE

9. BONUS SHARES
• ARE SHARES THAT ARE MAINLY GIVEN TO THOSE SHAREHOLDERS WHO ALREADY
HAVE OTHER SHARES.
• THEY ARE NORMALLY ALLOCATED ACCORDING TO THE NUMER OF SHARES THE
SHAREHOLDER ALREADY HAS.

10. UNIT TRUSTS
• REFERS TO A NUMBER OF DIFFERENT SHARES AND SECURITIES ALL PUT
TOGETHER AND MANAGED BY A FUND MANAGER.
• INSTEAD OF A PERON BUYING SHARES IN ONE COMPANY, THEY ARE ABLE TO
BUY A GROUP OF SHARES AND SECURITIES FROM A VARIETY OF COMPANIES
• POOLS TOGETHER A COLLECTION OF INVESTMENTS

11. BENEFITS OF THE UNIT TRUST
MANAGEMENT
• FUNDS ARE MANAGED
PROFESSIONALLY AND RESEARCH IS
CONSTANTLY BEING DONE ON THE
FINANCIAL SITUATION OF THE
ECONOMY
AFFORDABILITY
• ITS AFFORDABLE TO INVEST ON A
UNIT TRUST THAN IN INDIVIDUAL
SECURITY AS THE MONEY IS POOLED
WITH MANY OTHER INVESTORS.

12. ……..CONTINUATION……….
DIVERSIFICATION
• INVESTORS ARE ABLE TO DIVERSIFY
AND SPREAD WHERE THEY PUT THEIR
INVESTMENTS, WHICH LOWERS THE
RISK OF LOSING MONEY
LIQUIDITY
• IT IS EASY TO BUY AND SELL UNIT
TRUSTS AND CAN BE A BETTER FORM
OF SAVING THAN OTHER SHARES.

13. GOVERNMENT RETAIL BONDS
• ISSUED BY THE NATIONAL TREASURY OF SOUTH AFRICA
• IT IS A SAVING SCHEME THAT HAS NO FEES OR COSTS AND IS SAFE AND SECURE
• INVEST A MINIMUM OF R1000 OVER 2,3 AND 5 YEARS
• MONEY CAN BE WITHRAWN BEFORE THE MATURITY DATE, BUT THERE ARE
PENALTIES TO BE PAID

14. BENEFITS OF A GOVERNMENT RETAIL BOND
• THERE ARE GUARANTEED RETURNS
• NO RISKS ATTACHED AS THERE ARE FICED INTERESTS RATES
• CONVINIENT AND ACCESSIBLE
• NO EXTRA CHARGES OR COMMISION FEES

15. RETURNS
DIVIDENDS
• THIS ARE RETURNS OR PROFIT
EARNED FROM A SHARE IN A
COMPANY
• THE MORE THE OWNERSHIP OF
SHARES THE MORE THE DIVIDEND
THE SHAREHOLDER GETS
• CAN BE IN A FORM OF CASH, SHARES
AND PROPERTY.
INTERESTS
• IS THE AMOUNT YOU GET BACK FOR
LENDING YOUR MONEY (INVESTMENT)
• IT IS THE MONEY NEEDED TO BE PAID
BY THE PERSON/COMPANY
BORROWING THE MONEY
• INTEREST IS FIXED AND DOES NOT
CHANGE ACCORDING TO THE PROFIT
MADE

16. TYPES OF INTERESTS
SIMPLE INTEREST
• THE INTEREST THAT IS EARNED ON
THE ORIGINAL AMOUNT THAT IS
INVESTED
• ANY AMOUNTS THAT ARE EARNED AS
INTEREST DURING THE COURSE OF
THE INVESTMENT PERIOD ARE NOT
INCLUDED
• SEE PG 255
COMPOUND INTEREST
• IS CALCULATED USING THE ORIGINAL
AMOUNT PLUS ALL THE ACCUMULATED
PAYMENTS (DURING THE MONTH ETC)
• YOU ARE EARNING INTEREST ON THE
INTEREST THAT YOU EARNED IN
PREVIOUS YEARS AND ON THE
ORIGINAL AMOUNT INVESTED
• SEE PG 255 - 256