Getting Started in Shares - Part 8 : Being a shareholder comes with responsibilities | Sunday Observer

Getting Started in Shares - Part 8 : Being a shareholder comes with responsibilities

Buying a stock means ownership in a company and ownership gives you certain rights. As a shareholder, knowing your rights is an essential part of being an informed investor. Although the regulatory bodies attempt to enforce a certain degree of shareholder rights, a well-informed investor who fully understands his or her rights is much less vulnerable to risks.

As a shareholder, you may need to make decisions about taking up various rights and benefits offered by the companies you have invested in. In each case, you should keep your investment goals and strategy in mind and consult an adviser.

Annual General Meeting (AGM): CSE-listed companies conduct an AGM where shareholders vote on electing new directors to the board and other resolutions relating to the company’s business.

The Chairperson of the board and company Chief Executive Officer usually address the meeting.

You will be sent a notice of meeting outlining when and where the AGM is to be held. Many investors see the AGM as a good opportunity to hear what the senior management have to say. This also is an ideal platform for an investor to ask any question he/she may have with regards to the functionality of the organisation.

Reports and information: CSE-listed companies issue annual and interim financial reports to shareholders. Reading these reports is a good way to keep in touch with the company’s business and future prospects whilst keeping abreast of the financial performance of the organisation.

Corporate actions: This refers to a company making changes to its securities distribution. For example, a rights issue carried out by a listed company would result in an increase in the number of shares issued.

These can be complex and they can affect the share price, you should consider consulting an adviser before acting on these.

Time for your final step

Experience is one of the best teachers and as an investor you will learn from your successes and your mistakes.

It’s best to start off with a small investment to learn how it works and gradually increase the value of your portfolio. The first thing to do is contact a stockbroker.

You do not have to start trading, but setting up a CDS account is a useful starting place.

Next, keeping up to date with the market is a great way to build your knowledge and confidence. After a study on the market dynamics, you would be able to identify the right time to enter and with the assistance of your investment advisor identify the correct stock to purchase.

How to find out more about CSE

There are many sources of investor education, both for the novice and the more experienced investor.

The CSE Website (www.cse.lk)

Publications of the Colombo Stock Exchange

CSE Daily, Weekly, Monthly and Quarterly

Data Library; Annual Report of the Colombo Stock Exchange

Social Media: CSE Twitter, Facebook, Instagram and LinkedIn pages

CSE Android and iOS Mobile App

Seminars and workshops conducted by the CSE; Branches of the Colombo Stock Exchange (Matara, Kandy, Kurunegala, Negombo, Jaffna, Anuradhapura, Ambalantota and Ratnapura).

Should you have any queries with regards to investment and if you do wish to learn more about stock market investment, please contact our investor education team on 011-2356514. - Courtesy the Colombo Stock Exchange

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