A Personal Finance Blog for Malaysian: How and what to trade in Bursa Malaysia?

Thursday, October 28, 2010

How and what to trade in Bursa Malaysia?

Traditionally, when we mention KLSE or stock market, we only think of invest in SHARE.

Investing in share of a listed company effectively means you are a shareholder and own a % of the company. However, since your % is so tiny, therefore you are not allow to run the company but can enjoy the success of the company in form of "dividend" (cash flow) and "Value Creation" (i.e. share price move up).

However, there are more than SHARE you can invest in Bursa Malaysia (formerly known as KLSE). Today you can invest in different classes and types of vehicle in Bursa Malaysia such as:-
  • Share (or known as equity) and Warrant
  • Bond
  • Exchange Traded Fund (ETF)
  • Close-end fund
  • Real Estate Investment Fund (REIT)
What do I need in order to trade?
It is now very easy and affordable to trade. First, the trading lot (minimum transaction) has been reduced from 1 lot of 1,000 unit to 1 lot of 100 unit. To invest in Digi, current price at RM23.00 per unit, your minimum investment will be RM23.00 x 100 = RM2,300 for 1 lot.

Bursa Malaysia has make so affordable for ordinary people to buy and sell. Brokerage fee (transaction costs) can be as low as 1% for a complete buy-and-sell transaction.

Example of securities firms' offers
Jupiter Securities - min RM12 or 0.30% per contract
HLeBroking - min RM12 or 0.42% per contract
OSK Investment Bank
Kenanga Investment Bank - min RM28 or 0.70% per contract

You will need to open TWO accounts in order to trade in Bursa Malaysia.

1. Trading Account (like a saving / current account) to be kept with the securities firm.
- it is FREE
- You may earn interest on balance (money deposited there but yet to invest)
2. CDS Account (to electronically park your ownership or share of your investment)
- RM10 payable on registration and free thereafter.

Who is Eligible ?
  • You must be 18 years of age and above
  • You must not be an undischarged bankrupt

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