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Stock Price Valuation And Beta Calculation

1247 words - 5 pages

There are many choices in the market for the investors to generate more money and income with the capital that they able to invest. These tools are categorized into many different types of market such as equity market, bond market, and mortgage market, according to their characteristics. The markets are well-growing and establishing all around world due to the people’s awareness of investment, the globalization, the governments’ policies, and the change of technology. Equity market is one of the well performing markets. The companies raise fund from the public by listing themselves in the stock exchanges. Such objective can be done by distributing the common stock, preferred stock, and convertible securities. The voting rights, priority claim, ownership, and types of compensation are determined by their characteristics. The investors will purchase the stocks based on their requirements and preferences. Two types of market are found in the stock markets, which are the primary and secondary market. The primary market enables the companies to gather the funds directly from the investors when the secondary market provides the liquidity to the shares by enabling the investors to trade among themselves.
Stock price valuation
In Malaysia, the only stock exchange is the Bursa Malaysia. The Kuala Lumpur Composite Index (KLCI), also known as the FTSE Bursa Malaysia KLCI, is the main stock index. The basket consists of the 30 largest market capitalization companies in Malaysia (The Edge Malaysia, 2009). 70 % of the market capitalization for the local bourse is made up by these 30 companies (The Edge Malaysia, 2009). Its performance will signal the investors about the market condition in Malaysia. Next, Genting Berhad (GENTING, 3182) is a leading company in the trading and service sector under the Genting Group. Currently, the company has the market capitalization of RM 41,182.75 million and 3,716.86 millions of outstanding shares (Bloomberg, 2012). Kien Huat Realty Sdn Bhd is the main shareholder of Genting Berhad, which is owned by the Tan Sri (Dr.) Lim Goh Tong’s family with 39.7% of shares (Genting, n.d.). The company started to operate on 30 July 1968 with its original name of Genting Highlands Hotel Sdn Bhd (Genting, n.d.). After it operated for 3 years, it became a listed public company with the name of Genting Highlands Hotel Berhad and changed to the present name of Genting Berhad after listed for 7 years (Genting, n.d.). Currently, Genting Berhad is the investment holding and management company of Genting Group (Genting, n.d.). The company operates the businesses in different industries such as palm oil production, electricity power generation and supply, and the paper manufacturing. A stock price valuation on Genting Berhad and the comparison between Genting Berhad’s and KLCI’s 30 days data will be done.
"stock price=" dividend/(required rate of return)
The equation above will be used to conduct the Genting Berhad’s stock price valuation....

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