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?
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:
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.
- brokerage fees - maximum 0.7% of the value of total shares traded, normal practise is 0.6%
- Clearing fees - 0.03% of contract value subject to cap of RM200
- 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.