Bursa Malaysia is the stock exchange in Malaysia where you can buy stocks from different companies and trade them as you wish.
Investing in the stock market is actually easy, however, there are subtle differences in the way you do things depending on the stock exchange you’re in.
In this article, I will go over the things that you need to do in order to start trading in Bursa Malaysia.
1.Know About the Lot
I want to start this article by telling you something about the “Lot” system. In Bursa Malaysia, the term “Lot” is used to signify the products or services which can be utilized to add everything in a particular transaction. So in essence, it is a collection of those products and services.
However, the term has a different use in, say, the financial market. It is being used to refer to the quantity of shares that are used for trading.
There are also terms such as “Board Lot” and the “Odd Lot” that you need to know as well. The Board Lot is a term used to quantify a set of shares. In Bursa Malaysia, a board lot is just equivalent to 100 shares. This is used to simplify things and to make transactions even easier than before.
The Odd Lot in the basic sense just refers to any number of shares that is below the standard (in this case, 100). Although this is okay for other stock exchanges, the use of Odd lots is prohibited in Bursa Malaysia.
2.How to Start Trading?
To start trading in Bursa Malaysia, you need to have an investment or savings account in a financial institution like a bank.
You could go directly to your bank and ask them to create an account for use in stock trading. They will then guide you through the process.
You would also need a trading account. In Malaysia, the trading account is called the CDS or the Central Depository System Account.
This can be made in a brokerage firm and the stockbroker or remisier will be the one to create the account for you.
Take note that you can only create a CDS account if you are at least at the age of 18. Once the account has been opened, you will receive a confirmation and you can then proceed to begin trading!
3.The Process of Trading
Your stockbroker is going to facilitate the trades for you. In order to make a trade, here are some things that you will relay to your remisier (stockbroker):
- The name of the stock or the stock’s code
- If you’re going to buy or sell stocks, you will have to specify your order by using lots or board lots
- The share price you want to set (if you sell) or the price that you want to bid (if you will buy). Do note that you still have to use the lot system, which means that the minimum quantity of stocks that you can trade is 100.
After giving your broker those details, you will then proceed to pay the fees before a transaction can be completed. Here is the breakdown if you want to know:
- Brokerage Fee= 0.07% of the transaction
- Clearing Fee= approximately 0.04% of transaction
- Stamp Duty= 1 Malaysian Ringgit per 1000 shares