Guide for Beginners: Investing in Malaysia's Stock Market

Bursa Malaysia is Malaysia's main place for buying and selling stocks. It's located in Kuala Lumpur and used to be called the Kuala Lumpur Stock Exchange (KLSE). Bursa Malaysia helps people trade stocks, exchange currencies, and manage their money, offering various services like trading, clearing, and savings.

Gateway to Dynamic Capital Markets:

As per Bursa Malaysia's website, there are over 900 companies involved in diverse economic activities aimed at raising capital. Its primary index, the Kuala Lumpur Composite Index (KLCI), now called the FTSE Bursa Malaysia KLCI, consists of the top 30 companies listed on the exchange.

A diverse range of financial securities are traded on Bursa Malaysia, including equities, bonds, derivatives, exchange-traded products (ETPs), and real estate investment trusts (REITs). Additionally, there's a dedicated Islamic market segment aimed at promoting Shariah-compliant capital markets to serve Malaysia's Muslim majority population. This segment encompasses domestic and offshore Islamic assets as well as Islamic banking services, facilitated through a Shariah-compliant trading platform launched in 2009.

Bursa Malaysia's Three Market Tiers:

Bursa Malaysia operates with three distinct markets, each market has specific criteria for companies wishing to list. Here's a brief overview:

1. Main Market: This is the primary market for larger companies with established operating histories and profit records. Companies must have a minimum market capitalization of RM500 million upon listing.

2. ACE Market: Designed for smaller companies with high growth potential, the ACE Market is sponsor-driven and doesn't require a minimum profit or operating track record for listing.

3. LEAP Market: This market serves as a fundraising platform for underserved SMEs. Unlike the other markets, companies listed on the LEAP Market do not need to demonstrate any operating or financial track record. This market is only accessible to sophisticated investors and is adviser-driven.

Initiating Your Venture into Malaysian Stock Market:

Investing into Malaysian stocks can be broadly classified into two parts , first is opening a demat account and second choosing stocks to invest.

Step 1: Opening a Demat Account  

• Open a Central Depository System (CDS) account through authorized depository agents like brokerage firms or banks.

• Provide basic documents to complete the process.

• Consider opening a demat trading account concurrently with a stockbroker or bank for convenience. The process typically takes around 3 to 7 working days.

• Another option is opening a Nominee trading account, where you appoint your broker to hold shares on your behalf. This means that your name will not appear directly on the registration book of existing shareholders; instead, it will show your stockbroker's name.

Step 2: Choosing Stocks to Invest  

• Understand your risk appetite by calculating how much risk you are willing to take.

• Gain knowledge and experience in stock selection, encompassing understanding market fundamentals, ratios, latest news, and utilizing Technical Analysis for informed decisions.

• If seeking consistent returns, start with the guidance of advisors and gradually acquire skills to make profits.

Note: Remember that wrong stock selection can lead to high risks, so proceed cautiously.

Bursa Malaysia's Trading Hours:

Bursa Malaysia operates as a fully integrated exchange, providing a comprehensive range of exchange-related services including trading, clearing, settlement, and depository services. Here are the trading hours for the local market:

• Monday to Friday (excluding public holidays):

• Pre-Open: 8:30 am – 9:00 am

• Continuous Trading: 9:00 am – 12:30 pm

• Pre-Open: 2:00 pm – 2:30 pm

• Continuous Trading: 2:30 pm – 4:45 pm

• Pre-Close: 4:45 pm – 4:50 pm

• Trading at Last: 4:50 pm – 5:00 pm

• Close: 5:00 pm