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:
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
Technorati Tags: bursa malaysia, stock trading, KLSE
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Hi,I am WSK. 21 years old.
I am very interested in investment because In need to capitalise and increase my money value. Thus, after I did a few research. I decided to invest in stock market.I had just applied to open a Central Depository System (CDS) account today by approaching to an authorized depository agent ( an investment Bank in KL)
I submitted provide photocopies of IC (identity card) and paid
fee RM10 .But I haven’t receive the account document by e-mail yet.
I have few Questions here. When I asking the dealer representative of the investment bank about trading about. He gave me an answer that made me confused.
First , he asked me to wait for the ACTIVATION e-mail in this 2 days. Then, after I activate it,later, I can start buying shares. He said, for the 1st time, I need to bank in money to their BANK ACCOUNT. This can be done by CASH or CHEQUE. If I bank in money, I have to call him immediately after I put in that $, then he will transfer it / put it to ????( i don’t understand what he explained). After that, he will buy the shares for me.. I also asked about the process of buying and selling shares, and where my $$ go to and how can I get my $$$ back after I sold my shares… However, the procedure, for me, is so complicated and I don’t understand how it work.
Could you please explain it in a simplier way to me? How ,normally, the way of dealing shares purchasing?
is “pledge account” = “trading account”?
i want ask about this question too! that is quite complicated for us.. thanks a lot!
Hi,
It is common for remisier to ask new client( young and salaried employee) to deposit some cash into their investment bank account and later credit the amount to your trading account. Many clients phone their remisers to place buy huge amounts and if the share/counter he bought already makes huge losses before the payment day, it become a risk / liability to the remisier after T=3 (3 days transaction payment). a) For “big” clients which remisiers known for many years, remisier might even want to receive cheque payment . Then, remisier will issue their own cheque to pay out their client transaction at the payment counter.
Some “big” clients straight away wire transfer the transaction amount payment to their remisier’s bank account and within a few minutes, remisier will issue their cheque to pay their client transaction at the payment counter. Some people brings huge cash for payment at the paying counter. I can’t figure why they do that?
Alternatively, Go to Maybank / CIMB / Public Bank and ask for online share trading which is much cheaper in term of brokerage fee.But very careful when puting your buy/sale figure on the lot trading size ( 100 units, 200 units, 400 units or 1000 units ) during online transaction. For Foreign share trading, usually they use online trading and need strict documentations require to open an account unless you work in Multi National Company(MNC) which got business/bank relationships. Have a great day & Enjoy Trading ..
hi k.c,how much is the minimum price i can make profit in each share.let say i buy 0.75sen per share,and i sold it for 0.78sen is that possible.thank you.
it depends on how many share you trade (the volume).
There are minimum cost involved in each trade.
hi KC, im a university student and interested in learning the market. what would you say a good amount of money to start with as a beginner to make a decently diversified portfolio (say strictly on equity stocks at this point)? would, say, RM50,000 be too little?
i might be getting ahead of myself (but i do have RM50, 000 in cash) but just out of curiosity, do experienced, confident traders ever borrow money to trade thinking that they can beat the interest rate? or is stock trading strictly a cash business?
thanks.
It is very risky to invest with borrowed money. As the greatest and wealthiest stock investor, Warren Buffett makes about 25% p.a. return on average.
If you can make that kind of return persistently, then it is worth borrowing money to invest.
You can borrow money to invest if you know what you are doing. Warren Buffett also borrow money, first just after the oil crisis back in the early 1970’s and now. He issued bonds and used the money to invest.
You can open margin account at some reputable bank. But do invest wisely and no wild speculation please!
For beginners go for the high dividend paying stocks with a good track record.
Hi Melati,
RM 50,000 is is quite decent amount to start with. I’m a dealer from OSK, If you need any assistance can drop me at an email at natasha.gvision@gmail.com
hi KCLau.. i’m ivan from malacca.. i’m currently 18++ and i’m very interested in investment as i had started reading books on investment since 16.. the problem is.. i duno where and how to start.. i need a CDS account.. i’m already qualified as in age.. but u said i need an income statement..? i’m stil a student studying in secondary school.. am i eligible?
Ivan, it is better that you meet someone at the securities firm to get more info. I am not sure if income statement is mandatory.
Hi KC,
I wanted to ask a few questions:
(1) What is the minimum budget to be able to trade in stock market?
(2) Any recommendation on good and reliable stockbroking company?
Thank you.
Kenny,
1. a few thousands ringgit can get you start investing
2. they are very tightly regulated by Securities Commission. So just choose the one that’s most convenient to you.
hi kc…im pretty interested in investing and gettin some money back…i just want to know if i can start up with a small amount? because im still a student… and…who can i actually meet to know about this investment in detail?? like, any bank officers or any consultants? because i want to know more about this… TQ
you can visit any broker firm (securities firm) and they will be able to brief you step by step.
HI Sri I’m a dealer from OSK, If you need any assistance can drop me at an email at natasha.gvision@gmail.com tq
hi KC i’m interested in dng this share things… i’m still a student age 20 frm penang.. where cn i get more info bout this in png??? any specfic bank or sumthing… keshivnder111@hotmail.com.. thnks…
hi kc,
Im currently in singapore.i want to know how to trade in singapore stock market.im a malaysian.
hi…
I have created a CDS account with Maybank as well as a trading account. However, when I logged into the Maybank2u.com, then I realised Maybank provides 2 types of trading accounts – named maybank investment account and stock trading account. Do you have any idea what are these about.
Second, would you mind to enlighten me what margin trading and non-margin trading are about.
Thanks
Hi John,
I don’t use Maybank to trade share. So no comment on that.
Margin trading is using borrowed money to buy securities, with the expectation of increasing profits. Margin trading can bring big returns, but is also risky
hi KC…
i was wondering :
can i start invest in local stock market with RM500 only OR less?? * (sorry for the “not so smart question”.)
anyway, i like this blog and keep up the good work..
*i just wanted to minimize risk by investing a small amount of capital.
investing RM500 will not be cost effective because the transaction fees is about RM20.
My company offer a 15% to 20% return each year. Although it is not stock market involve just to share with you guys. Investing is all about potentials and risks. For me stock market is too risky. Until I found my company. Mail me if interested. I shall tell u the rest.
hi, can u explain to me about ur company, for me 15% to 20% is good enough. Tq
I am searching for a short course of how to invest in stock..any suggestion?
Hi KC ..I am very interested in investment because In need to capitalise and increase my money. Anyone here can teach me how to get started in investment. Please drop me your email. Glad to hear good respond from you guys.
Hi, please give some review regarding this web site http://www.plus500.com. Because it allow trader start to trading only with RM100.
I am an Indian citizen. If i want to start trading in Malaysian Stock Exchange what are the formalities??? Kindly revert…
Greetings from the USA, I too would like to start some investing in the Malaysia Stock Exchange. There is a specific stock I’m looking at thats an Equity Stock. I’m looking at investing $5,000USA. Does anyone know the procedures for a foregin investor? Most likely I will invest in the one company stock and hold it for sometime. I will be in Malaysia in OCT, could I open an account in person at a local bank? Thanks for the info, Cheers.
Hello,
I live in UAE and would also like to invest in the Malaysian Stock Exchange. Do you have any idea about how to start? Is it possible to open an account from UAE?
hi kc.. what are your thoughts on online trading? do i have to open a cds account as well.. is it safe to do online trading with companies such as TRADER XP etc.. is it more fun trading thru this sites or doing it the old fashion way? how reliable are this sites.. (trader XP)
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