How to Trade Stock at Bursa Malaysia: Investing Basic

I started trading at KLSE (Kuala Lumpur Stock Exchange) back in my university years. As a young investor, I was eager to learn how to do investment and earn money without hard work. I was proven wrong that investing takes hard work, unless I want to be a passive investor that will be a different story. To trade stock at Bursa Malaysia ( previously named KLSE), the first question I asked is: How to have a trading account and start buying shares?


Want to read some history about Bursa Malaysia? The best articles are:
Bursa Malaysia at Wikipedia
Bursa Malaysia at Answer.com

Do you qualify to trade at Bursa Malaysia?
You have to be at least 18 years old. If not, wait until your 18th birthday.

Step by Step Guide:

Stock Investment Guide Infographic

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    You might need to “right-click” and “save link as” to download this PDF file to your computer.

1. Open a Central Depository System (CDS) account: you can do this by approaching an authorized depository agent such as stockbroking company and some banks.

  • provide photocopies of IC (identity card)
  • fee RM10

You will receive the account document by mail.

2. Open a trading account with stockbroker: this will be done simultaneously when you open the CDS account.

  • need to provide income statement
  • fill out trading account form
  • the stockbroker will check your credit status at CTOS (Credit Tip-off Service) and stockbrokers’ defaulters’ list – in order to qualify you and set your trading limit

What do you need to know about CDS account?

  • it allows you to buy and sell shares
  • it also allows you to trade non-equity counters such as bond and warrants
  • it is something like a bank account – you keep cash in bank accounts, you keep shares in CDS accounts.
  • you can have more than one CDS account
  • there are two type of CDS accounts: direct and pledge
  • if you have a direct account, you will receive the dividend checks and prospectus mailed to your house.
  • if you have a pledge account, the stockbroker will receive the dividend payout and prospectus on your behalf. Then the stockbroker will bank in to your account.
  • normally banking stockbrokers will require you to open a pledge account.
  • you will get CDS account statement monthly. If there is no activity, you will still get the statement on June and December.

3. Get a remisier: normally your stockbroker will appoint one to you if you don’t have any particular preference.

  • remisier has to be licensed by the Securities Commission
  • remisier helps you make the order: sell? or buy? at what price?
  • get someone you like and trustworthy as your remisier

4. Buying and Selling Shares: You can key in your order at online system provided by your stockbrokers, or call your remisier to make the order. If your buying order match a selling order, you will get a trade confirmation. The stockbroking firm will then send out contract notes to you specifying details of transaction.

5. Payment: When you buy share of company S, your CDS account will be credited with share S at 9am on T+3 (T=transaction date). The 3 days only include working days. Your payment had to be made on 12.30pm that day. If not, your share will be forced sold at a contra loss or contra gain.

Fees involved:

  • brokerage fees – maximum 0.7% of the value of total shares traded, normal practise is 0.6%
  • Clearing fees - 0.04% of contract value subject to cap of RM500
  • stamp duty – RM1 for every RM1,000 worth of value

Free Resources about Bursa Malaysia:

  • TradeSignum.com – provides charts, counter history and analysis tools. Free to join as member
  • TheStar.com.my – provides almost real time stock prices. You can register to monitor your stock portfolio up to 25 counters. Also free to join as member.
  • BursaMalaysia.com

Stock Investment Course

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260 Comments

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  • Goh

    Reply Reply June 3, 2013

    May I know which is the best Online trading platform for stock? Are you trading online as well, if so which platform you recommmend?

    • KCLau

      Reply Reply June 11, 2013

      There are many. I personally only tried OSK, Alliance Bank and Public Bank. All are not bad. We just use the platform to do transaction anyway.

  • Tong

    Reply Reply July 13, 2013

    Is it possible for a college student to open a trading account as I don’t have any income currently

    • KCLau

      Reply Reply July 15, 2013

      Yes, I think you can. I opened my first CDS account when I am in university, without any income.

  • Francis Salvador

    Reply Reply July 16, 2013

    I am a Filipino working in Singapore. I already had opened a savings account with Maybank in Johor. For some reason they did not ask me anything. I currently trade on different markets and I am interested in KLSE. I wouldn’t have problems opening a trading account with them right?

  • rita

    Reply Reply July 18, 2013

    How much money do i need for a start up? i am clueless about stock trading but very interested, where do you suggest i start?

    • KCLau

      Reply Reply July 18, 2013

      @Rita, you can definitely start with a few thousand ringgit.

  • Francis Salvador

    Reply Reply July 18, 2013

    Kindly disregard my question. I just finished opening an account with Maybank Securities. Thanks!

  • Chan

    Reply Reply July 22, 2013

    I’m a college student and have no income, it seems that i can open CDS account, but then can i buy shares? Thanks.

    • LAI SENG CHOY

      Reply Reply July 26, 2013

      Yes. As long as your CDS account is active, you can start your share trading right away.

      Do note that your CDS account shall become dormant if it is inactive more than a year. You have to reactive it back by contacting your brokerage firm.

      • Chan

        Reply Reply July 31, 2013

        Thanks for the feedback. I just opened a CDS account. :)

    • KCLau

      Reply Reply July 28, 2013

      @Chan, yes you can buy share with cash if you have a CDS account.

  • Ang Kee Wei

    Reply Reply July 22, 2013

    hi, i am new to stock market. would like to ask 1 lot equivalent to how many units? 100 or 1000 units?

    thanks 1st.

  • Kishannair

    Reply Reply July 27, 2013

    I need to ask you how much can i make if i invest around rm4000.sorry about that i am new here and i would certainly love to start investing.by the way,i am still a university student.

    • KCLau

      Reply Reply July 28, 2013

      @Kishannair, it is advisable to learn about the company profitability. When you buy a share, it is owning a piece of a real business.

      • Sandy

        Reply Reply September 10, 2013

        May i ask KCLau, do u hear Callabdput.com before?

        • Sandy

          Reply Reply September 10, 2013

          Sorry typing error… should be Callandput.com

          • KCLau

            September 18, 2013

            @Sandy, so sorry that I’ve never heard of this website before. So no comment on it.

    • LAI SENG CHOY

      Reply Reply August 1, 2013

      @Kishannair, the return is very much subject to how much do you know about you investment. Of course, this include the nature of business, the industry the business in, its financial performance as well as performance consistency. The investment timing is also playing an important role.

    • ZFS

      Reply Reply August 6, 2013

      Even knowing the company is profitable doesn’t guarantee you will make money, it’s all depend on your investing length which coincide with the market climate at the period of your investment. If you have no luck, you will be caught investing in downturn and submerge in a loss for quite some time. Of course, if you invest in profitable company, chance of making a return is higher than invest in a not so profitable company in any climate

  • Hari

    Reply Reply August 12, 2013

    Hi, im a fresh grad. just planning to start my trading career. hehe. Ive played the OSK investment challenge before. Is it how the real environment is? and I have read about ‘Trading Options’ in some books, do such thing exist ? If yes..how do we implement it? through a stockbroker? or can be done online?

  • Chan

    Reply Reply August 12, 2013

    I wonder whether can i buy for instance 100000 shares at price of 0.005, and wait until it rises up to 0.015 or higher then sell it. Is that feasible? Because 0.005 seems like the lowest price a stock can go. This question might sound silly, forgive me I am a new trader.

    • Peter Lim

      Reply Reply August 25, 2013

      No, that is not feasible because the stock can get delisted or bankrupt which means the stock becomes worthless. Thus, your potential loss is 100% even if it’s just 0.5 cents per share.

  • pk

    Reply Reply August 21, 2013

    can give me example of fee that need to pay per transaction?

  • Jamie

    Reply Reply August 29, 2013

    Hi I’m newbie too. I am very confuse about definition of lot. All these while my understanding is 1 lot = 1000 units. But in online many says 1 lot = 100 shares? Are the two saying same?
    If the price for a share is RM1.50. Using online trading, I key in [10]x100shares. I paid RM1500. In this case, I have purchased 1 lot or 10 lots?
    Thanks..

  • Owen

    Reply Reply August 29, 2013

    Jamie, I think you are confused.. correct me if i’m wrong. with the clarification, i guess the 1 lot = 100 shares is not identical to 1 to 1000.

    here is what i think. 1 lot is equal to 100 shares and 1 lot is equal to RM1,000, hence 100 shares is equal to RM 1,000. but in terms of trading with remisier, i guess when you buy or sell a share, you sell but “1 lot” and not “1 share”. i think this is what i understand. hope this can clarify things

  • Jamie

    Reply Reply August 29, 2013

    Thanks Owen. Yes I’m confused that’s y I’m here. haha.
    I know when we buy/sell shares, we transact in the term “lot”, such as minimum 1 lot. What I would like to know is:

    1) Is 1 Lot = 1000 Units ?
    2) Based on one of the answer above by Lai Seng Choy, he wrote 1 lot = 100 share. So is “1 Lot = 1000 Units” and “1 lot = 100 share” refer to the same thing?
    3) If the price of a share called ABC is RM1.50, so if I want to buy 1 Lot, I need to use RM150 or RM1500 to buy it?

    Sorry as I’m really new in stock market. Hope any expert here can help to clear my doubts. Thank u very much.

    • naim

      Reply Reply January 16, 2014

      hi jamie. Ok lets start 1 by 1.

      1 lot contains 100 unit. A lot is 100 times larger than a unit. If you want to buy let say TENAGA (search it on bursamalaysia.com) you need to buy minimum of 1 lot that is 100 unit times RM11.6 =1160. With RM1160, you made your first lot in Bursa Malaysia.

      Depends on which counter you prefer, it varies accordingly. Let saya you interested in IRIS RM0.45 times 100 unit= you got 1 lot at RM45.

      1 lot IRIS and 1 lot TENAGA is the same quantity of unit. But different in value..

  • David

    Reply Reply September 24, 2013

    I’m new investor. For the public bank share trading account is the same as Central Depository System (CDS) account?

  • rishinder

    Reply Reply October 2, 2013

    Hello Guys,

    I have a few questions and i’d be grateful if anyone could answer it.

    1.how much komisyen or payment do trading platform take from you.
    2.Which is the best online trading platform in term of lowest komisyen/deduction.
    3.can I buy stocks and sell in on the same day and do it over and over again ?(would I get charged for every transaction or only when I withdraw $)

    Thanking you in advance

    • naim

      Reply Reply January 16, 2014

      1.how much komisyen or payment do trading platform take from you.

      Differ on which broking house you choose.
      I’m using Jupiter currently.
      Kindly refer to this website: http://klse.i3investor.com/jsp/hti/brokers.jsp

      2.Which is the best online trading platform in term of lowest komisyen/deduction.

      Find it on http://klse.i3investor.com/jsp/hti/brokers.jsp

      3.can I buy stocks and sell in on the same day and do it over and over again ?(would I get charged for every transaction or only when I withdraw $)

      Yes. Let say i buy at 0900am. and the price goes up at 3pm. I sell at 0330pm. I will be charged separately. so, make sure the profit can telan all the rate and charges. If you have 10,000 above, just buy penny stocks. Don’t thinking of getting TENAGA or BAT..

      • naim

        Reply Reply January 16, 2014

        If you have 10,000 ABOVE, just buy penny stocks. Don’t thinking of getting TENAGA or BAT..

        typo:
        If you have 10,000 AND LOWER, just buy penny stocks. Don’t thinking of getting TENAGA or BAT..

  • Austin T.

    Reply Reply October 7, 2013

    Hi, I am a newbie in this field as well.
    Yes, just wanted to know, is it eligible to have CDS account & Trading Account for foreigners?
    I am holding a Expatriate Permit in Malaysia, and having bank account in Public Bank and May Bank. Hope to hear from you guys!

  • jyteng

    Reply Reply November 13, 2013

    I opened a cds and trading account with kenanga. Now how do I deposit money into my cds account from my maybank saving account to start trading? Please guide me, thank you.

  • Eirc

    Reply Reply January 11, 2014

    I am currently a college student which is very interested in learning how to trade. Can someone please talk to me about this?

  • Chua Yuan

    Reply Reply February 9, 2014

    For a newbie which company will you all suggest for us to start invest?

    • KCLau

      Reply Reply February 10, 2014

      Buy the company you understand that’s profitable and have future income growth.

  • Kevin

    Reply Reply February 10, 2014

    Hi, I have question regard the brokerage fee. As you mentioned the brokerage fee will be charged based on total shares traded. So if let say, I bought 1 lot today and bought another lot next day, the brokerage fee is charged on these two different transaction or is charged during the point when I sell all the lots? Please advise, much appreciated.

    • KCLau

      Reply Reply February 10, 2014

      You will have to pay each and every time you trade – whether buy or sell. This means you pay when you buy, and you again when you sell the same lot later.

  • TanCS

    Reply Reply February 20, 2014

    Mind if I ask if there is any stock simulator for newbie to get the look & feel before dipping into the real sea? If yes, how different would these simulators be to the real world? Is it really helpful?
    Appreciate all advises…

  • AT

    Reply Reply March 21, 2014

    hi i am new, would like to know the following :-

    1. What is penny stock
    2. just say I want to buy some simple and cheap stock to make short term
    extras, can subscribe to maybank2u to view and trade stocks
    3. My friends told me the “MAS shares” is at 10 – 20 cents, and advice me to
    buy, how do I purchase this share

    so sorry, i new to this

    • KCLau

      Reply Reply April 3, 2014

      Hi AT, regarding your questions:
      1. Penny stock – stocks trading at very low price e.g. 5 sen, 30 sen, or even 50 sen
      2. You can open any trading account for whatever purpose ( not money laundering of course :) )
      3. I would not advice investor to buy MAS. You can speculate with MAS share (like gambling), but certainly not investing in it.

  • ling

    Reply Reply April 1, 2014

    Hi,I’m new to stock market also. I’m using the online trading. I have buy the shares for 2 days already, but the shares cannot match, so it become expired at the end of day. Is it normal process? Anyway can speed up the process?

    • KCLau

      Reply Reply April 3, 2014

      Hi Ling, when the order expired, you will need to enter the order again the next day. It is normal that some orders are not matched because there is no willing buyer/seller at your asking price.

  • YK

    Reply Reply April 5, 2014

    Hi,

    I’m newbie and i would like to know the following;
    1. I have applied an CDS account and i would like to make trading via online, what i should do?

    2. Can trade all equity via online? what about warranty and bond?

    Regards,
    YK

    • KCLau

      Reply Reply April 7, 2014

      @YK, all you need is a trading account. CDS account will be open at the same time. Just visit any securities firm (Public Bank, CIMB, Maybank, RHB, HwangDBS etc) to get it done. And you will be able to do all the above.

  • winelim

    Reply Reply April 5, 2014

    any comment for xdl-wa?

  • Satheesh

    Reply Reply April 8, 2014

    hi, I am a non-Malaysian and i am currently working in Malaysia so is it possible if I able to open a CDS account will I be able to buy shares?
    Thanks

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