Investment Management (5th ed.) (review)

This book, which is in its fifth edition, will be indispensable for readers interested in enhancing their knowledge of investments in general and in the case of Singapore. It provides both a theoretical understanding of investments and locates it in the institutional context of Singapore. It begins with a chapter on the “Types of Financial Assets”, which indicates the author’s concern that those wanting to increase their knowledge of investments should have a good understanding of the basic concepts of investments such as the different types of shares, notes, receipts, securities, futures and trusts that are available for investment. The explanation of the concepts is both precise and clear and is written with the reader in mind as the book is eminently reader-friendly. To further assist the reader, it also contains a comprehensive glossary of terms used in the book.

To place the discussion in perspective, the second and third chapters provide a clear and scholarly exposition of the various regulations governing the securities industry in Singapore and the evolution of the Singapore Exchange and its functions and activities. Before an in-depth discussion of the trading of securities, the reader is given a detailed introduction on New Issues and the requirements and procedures of the Singapore Exchange in relation to public offerings, rights issues and bonus issues. This is followed by a vivid description of the trading of securities, which includes the classification of shares, delivery and settlement of shares, trading hours, transaction costs and bond, option and fund trading.

The procedures for securities lending, borrowing and transfer are also described in detail in Chapter 6 of the book. It is quite remarkable that a considerable amount of institutional, legal and historical material together with a discussion of basic finance concepts are provided in the first six chapters. This provides essential reading to equip the reader for the chapters on Unit Trusts and Government Securities, which is explained in considerable detail in Chapters 7 and 8 of this book, which was first published as Investment Management in Singapore in 1989.

The book has also incorporated recent changes in the product and regulatory structures in the securities industry in Singapore, including changes to the Central Provident Fund (CPF) Investment Schemes. Among the more advanced topics that are presented in an elegant and clear style are market price indicators, technical analysis, fundamental analysis, the Efficient Market Hypothesis (EMH) and Portfolio Analysis. Beginners and practitioners will have a deeper understanding of the merging of theory with practice after reading this book. For those interested in the growth of the securities market and its indicators, they will find Chapter 12 indispensable.

The fifth edition of the book, which was published in 2011, also contains a new chapter on the fast-growing and important field of Islamic finance. The book explains the salient characteristics of Islamic finance including the origins of Islamic Finance, the principles of Islamic finance, Islamic bonds, unit trusts and REITS (Real Estate Unit Trusts), Islamic savings deposits and how transactions are conducted in Islamic finance. It is written in an easy to understand manner, especially for those familiar with conventional finance but unfamiliar with Islamic finance principles such as riba, gharar and Islamic finance transactions such as Mudaraba, Murabaha, Musharaka, Istisna, and Ijarah. The exposition of these technical Islamic terms is concise, clear and accurate. The chapter on Islamic finance also introduces the reader to the business opportunities opened up in this fast-growing area of Islamic finance in the world of finance.

The book will be of immense value to students who are in diploma and degree courses in the polytechnics and universities and those studying for the Trading Representative Examination. It will also appeal to professionals working in the securities industry and investment firms and to individual investors, who would rather not be naıve investors. Those who already have a working knowledge of investments may also find the exposition of concepts and theories and institutional materials to be very value enhancing in terms of the clarity of the exposition. It also...