By: Dr. Idah Zuhroh
Financial investment has important benefits from a macro and micro economic perspective. The perspective mentioned first is to become a source of enormous potential development funds through community involvement in the purchase of financial assets (securities) of private and government companies that go public. Investments in securities by RTs and institutions will be able to replace the position of dependence on bank debt, which is usually relatively small in value compared to direct financing by investors on the stock exchange. Massive fundraising involving most of the people with middle to upper economies as long as it is not highly concentrated on key securities holders will have an impact on the strength of the capital market which is capable of accelerating economic growth and equitable distribution of public income.
From a microeconomic perspective, the ownership of securities in publicly traded companies will be able to provide profitable investment opportunities for those with sufficient knowledge. The choice of securities investment in companies with good performance will be able to distribute the company's profits to securities holders far higher than simply placing funds in the banking sector. The fundamental difference between the placement of funds in banking and the capital market is the aspect of risk and fairness. When investing in banking, depositors expect the results to remain without risk while in the capital market, apart from fluctuating results, of course they must also be prepared to share losses if the company loses and vice versa. Actually, in the capital market, there are also options for investing in fixed yield securities, in this case bonds (using the interest system) and sukuk (using the sharia system).
Financial investment will provide opportunities for households and institutions to own part of the company's shares or part of the assets / projects run by an experienced company rather than having to carry out a project or open their own company. Various problems arise for households and institutions if they have to start an independent business, except for those with entrepreneurial mentality. Usually an independent business requires sufficient capital, experience, understanding of the supply chain, processes, and distribution to the final consumer. Difficulties in starting a business can be directly overcome if it is done in a focused, consistent manner and always innovating to get good competitiveness. Based on studies in developed countries (America), companies can begin to be declared strong if they have entered the age of 10 (R Baye, 2008 p. 230) or if they are not successful, they will be closed. While the experience in Indonesia, successful entrepreneurs (building medium and large businesses) are not more than 3% of the population.
In contrast to capital cooperation either in the form of shares or sukuk, investors have left it to the manager to be able to develop the company according to the owner's goals, namely being able to share profits periodically. The role of investors is to monitor the performance of managers through progress reports that are submitted periodically to the public. An investor has the right to transfer its financial assets to another company if it is assessed that the financial assets it currently holds are not profitable, which is indicated by weakening asset prices in the capital market.
For institutions, efficient and productive financial management is needed in order to provide financial resources capable of supporting organizational performance. Financial managers are not only required to manage the funds that are already available, but are able to find new sources of funding. One of them is to avoid idle funds to be allocated to investment options that are profitable and liquid. The challenge of providing liquidity usually places their choice on the banking sector which provides very small returns. The latter decision usually does not sort out the level of liquidity maturity requirements, so the opportunity to produce financial assets has not been utilized properly.
Investing in financial instruments is relatively easy, considering that company ownership shares, assets or projects (sukuk) require less capital than having to establish a company or open their own project. As previously mentioned, not only capital is needed in a real investment, but the complexity of the problems we will face starting from the input to the market. Ownership of large companies does not have to have 50% shares / sukuk, but even a small percentage is allowed. Regardless of the percentage of share ownership / sukuk by investors, it can be stated that they officially own a certain large company / project (which has been listed).
Is investing in financial assets profitable enough? The answer to this question is certainly not easy unless it is supported by the latest data (as of November 2017) on the performance of the Indonesian Stock Exchange (BEI). When viewed from the movement of the composite stock price index (IHSG) has reached 6021, whereas in the previous year it was still 5297 or in one year it reached a market return of 14%. This figure is relatively high when compared to bank returns which only reach 4% / year. The figures that have been mentioned have not yet considered investment options and efforts to combine company securities so that it is possible that the returns obtained by investors can reach a higher percentage. If the investment value is too small, investors can submit their asset management to fund managers through the purchase of mutual fund shares.
So are you still hesitant to invest in financial assets?
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Dr. Idah Zuhroh currently serves as Dean of the Faculty of Economics and Business (FEB) University of Muhammadiyah Malang. Dr. Idah is an expert in Islamic economics and Islamic banking. Dr. Idah can be contacted via email: zuhrohida@yahoo.co.id |