FIN435: Financial Market And Banking Services Assignment, UiTM, Malaysia Overview of the development of the Malaysian financial system

1. Introduction and Overview of Financial System
Overview of the development of the Malaysian financial system, importance of financial stability Financial system (components and structure)
Financial intermediation functions and benefits
Role, functions and sources & uses of funds of commercial banks and investment banks
Role, functions and sources and uses of funds of non-bank financial institutions (NBFIs)
Islamic Banking (objectives, development, comparison with conventional banks and Shariah contracts and its application on banking products)
Overview of the four financial markets (MM/FX, capital, derivatives and offshore)
Risks of financial institutions

2. Interest rates and the role of a Central Bank
Interest rates (definition, nominal/real rates, determinants of interest rates)
Relationship between interbank rates, OPR, reference rate and lending rates
Bank Negara Malaysia (BNM) [objectives, functions and monetary instruments (brief)]
Reserves of BNM [Components and its currency safeguarding role (reserve backing ratio – calculation)]

3. Money & Foreign Exchange market
Development and structure of Money Market (MM)
Objectives, operations, participants and categories of MM
Description of MM instruments
Calculation of proceeds of (i) yield instruments – NIDs, MGS, REPO, (ii) discounted instruments – TBs, BAs, BNBs
Money market risks and managing of risks
Characteristics, developments and participants of Foreign Exchange market (Forex)
Forex quotations (spot and forward)
Risks, factors affecting forex market
Roles of BNM in forex market
Basic trading strategies (calculation of forex profit/loss)
Minimizing risk [Stop-loss trading strategies (calculation to ‘cut’ loss)].

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