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, i am jasmine, 20 years old.
I have just created my CDS account few days ago. What am I going to ask is for the online trading, we must go to the bank and request for the that? because I think i have done everything while creating the CDS account already. My remiser did not say anything or teach me anything too. I am now waiting for the account activation via email. Thanks for your reply.
Hi WSK,
DO NOT issue a cheque made payable to your remisiers!! there has been many scam on this issue in this industry. Authorities have made it very clear that all cheques must be made payable to the stockbroking house/investment bank ONLY! If you are making payment in cash, you may do it over-the-counter at your broker’s office.
ACCOUNT
CDS Account – an account with BURSA MALAYSIA where all your shares will be kept. RM10 being opening fee. You will be granted a CDS number which is followed by broker code-branch code-personal number e.g. 123-123-123456789
WSK – please call the broker to check if your account has been opened. Dont be surprise if the forms are not submitted for account opening.
Trading account – an account you open with the broker for trading purposes i.e. buying and selling of shares. This account is linked to your CDS account. All your contracts, money that you have in the account, losses will be reflected in this account.
You can open a CDS account without opening a Trading account, however you will not be able to trade. On the other hand, you cannot open a trading account if you dont have a CDS account.
Once your CDS and Trading account is opened, you may start trading. No activation is required unless your CDS account is dormant/inactive. The rule says that opening of account is usually within the same day, otherwise latest by the next business day.
TRADING
On the day of purchase, in the financial term is called T-day (transaction/trading day). You are given 3 days grace period to make payment/settlement, which means settlement is on T+3 by 12.30pm. Your shares will be delivered to your CDS account on T+3 9am =)
PAYMENT
Payment can be made using cheque, TT or cash.
Cheque – Remember cheque is only made payable to the broker only. DO NOT ISSUE A CHEQUE IN FAVOUR OF YOUR REMISIER!!
TT – you need the bank’s account number. After you TT over, call your remisier to inform them on the transaction. You may need to fax/email the supporting over to your remiser. Your remisier will then inform the treasury department to credit the amount into your account.
Cash – you can do it OTC. some remisier provide added services by collecting on your behalf.
SELLING
If you feel that you are already profiting before settlement date, you can sell your shares. Thus you shall be expecting to receive contra gain. There are 2 payment method i.e. credit into your account or to issue a cheque in favorable to you. You may need to advise your remisier on the preferred method.
FORCE SELLING
If you do not make settlement by T+3, the broker has the right to force sell your shares on T+4. Contra gain will be absorbed by you, likewise any losses will be borne by yourself.
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 Ivan,
if you do not have an income statement, Bursa Malaysia will also accept bank-in receipts. photocopied of your check book. Easiest way is to bank in RM10 into your personal bank account and submit the bank in slip to the bank as a supporting for registration for e-Dividend.
Note that Bursa Malaysia only accept saving / personal account.
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
Ziwen, Can you put in your email, or return a email to me, jackreacher@mail.com
Hi Ziwen, Can you provide some details on the 15%/20% that you are talking about? my email: srvanan.a@gmail.com
Hi ziwen
Please tell me abt the investment plan u hv. U may drop me an email at jaclyn.thorn@gmail.com
anybody interested in 24% then?
best part is, you don’t have to put it in for a year
it’s 2% per month…..
Are you talking about gold investment?
he’s talking about scamming you by promising high returns. RULE: If anyone tells you about an investment promising more than market rates (i.e. more than FD ~ 3%/annum) and doesn’t tell you what they are investing in, its a scam. You WILL lose your money. You can see from the comments here that there are many ready victims just waiting to throw their cash down the drain.
I am searching for a short course of how to invest in stock..any suggestion?
yes.. i am giving shorts course for free to those who are really keen. just email me for appointment. thank you.
Hi wh, i am interested to learn about Investment. Can i have your email address for an appointment with you? Thanks.
Hi wh, i’m interested to learn about investing in stock market. this is my email justinnpe@yahoo.com.my
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.
yes. i giving lesson to those who are willing to learn. is free
wh, is it still applicable for now?
thanks. n contact me miroyin0406@yahoo.com
yes, i want to learn also
where to start the course at?
i cant understand a risk on investing in trade market, would you like to clarify it to me? i need to own a business of small and low cost investment, what would you advise me to do. i need to notify to you that i have no knowledge on business but i need to start something to make money.
Hi wh, i’m interested in stock exchange n want to learn more bout it. How to attend your free lesson? reply me at samy_palan@yahoo.com
Thanks.
Hi, please give some review regarding this web site http://www.plus500.com. Because it allow trader start to trading only with RM100.
Is reality the company can make u started to trade with RM 100 cause they company using the leveraj system , lets say the leveraj they use is 1:50 example lets say one unit share is RM1 of course one lot will cozt RM 1000 right? But this is before leveraj , after the make the leveraj u maybe RM 20 ribut the lot of the share .. This is why they can let u started resdung with RM 100 but make sure u fully understand all the terma and condition before u started to trading . Hope u can success in your investment. .. Hope u can understand my explanation..
I am an Indian citizen. If i want to start trading in Malaysian Stock Exchange what are the formalities??? Kindly revert…
Hi Vikas,
You may open an account with any broker in Malaysia to start trading. Just bring along your passport and Ringgit Malaysia 10 being account opening fee.
Foreigners are exempted from registering of e-Dividend.
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.
Hi Ray,
You may open an account with any broker in Malaysia to start trading. Just bring along your passport and Ringgit Malaysia 10 being account opening fee.
Foreigners are exempted from registering of e-Dividend.
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)
Hi Valerian,
Online trading is of cos more convenient. You are also entitled to a discounted brokerage (negotiable). maximum 30%. The reliability of the online trading solely depends on the platform provided by the stockbroker/investment bank
Hi KC,
Im a 16-year-old student. I wonder if i can sign up for a personal CDS account. Or can i somehow sign up under my parent’s name?
The minimum age is 18. So I dont think you cna have a CDS account under your name.
hi, can u tell me what is a trading pin number? thnx
hi KC,
I got a few questions
1. Let says I buy 1000 shares at RM1=RM1000 (cost). Then when market closed, share price go down at 20cent. Am I realized the 20cent loss if i’m not selling the shares yet? only the market was closed.
2. Currently my investment related directly to stock price, my return around 5% per month and I make average 60% return p.a on my investment, if I trade in KLSE, am I subject to pay tax on my profit???
Hi Joey,
1. The loss is not realized yet. Which means it is just a paper loss.
2. No tax on capital gain.
I just want to know at least how much I can start .I mean moneys is RM how much at least.
Hi Yuzaki,
it all depending on the stock/counter purchased.
normal charges are:
1. brokerage fee at 0.7% (minimum is RM40 per contract)
2. clearing fee at 0.03%
3. stamp duty at RM1 for every thousand.
Honestly you dont even need a cent when you trade. This is because you are given 3 days grace period to pay for your purchase. If the market has gone up and can make a profit from selling, you may proceed to sell. Thus making profit at no cost.
However, if the market is going against your position you have 2 options.
1. Sell off the share which will result in a contra losses; or
2. Make payment for the shares you bought initially, and hold on to it until a better time to sell.
e.g purchase 10,000 Genting shares @ RM2
Brokerage = (10,000xRM2) x 0.7% = RM140
clearing fee = RM6
SD = RM20
total contract amount = RM20,000 + RM140 + RM6 + RM20 = RM20,166
Hi Mr. Lau,
I would like to buy OTC stock of US. Do you know which brokerage firms provide this service?
thanks,
stone
Maybank can buy OTC stock of US but the order must go through phone call during office hours. It is quite risky to buy OTC stocks unless you’re pretty sure that it will be raise up very fast in short time.
Hi, I am wondering whether I can hav a cds account even I am 19 years old but jobless ?
thanks,
Jun
Hi Jun,
You must be 18 years and above to qualify to open an account. Being jobless does not disqualify you from opening an account, however may affect your credit rating. More often than not, you will be advise to trade base on collateral basis i.e. limit will be given based on the amount of money or shares you have in your account.
hi. i am just begin to invest in the stock market. however, i am still not really familiar with the bursa rules and regulation.
here are my doubt:
1. let say the share A is RM2.50. i wish to buy only rm1.00. is it possible? is there any different of the remiesier + processing charges compared to the normal trading where buy one unit.
2. if i buy the share all the time with the unit less than one, any obstacle when the time i want to sell it?
i am appreciated for ur advises.
thanks
Hi KP,
Question 1…it is only possible for you to enter at RM1 for share A if the trading price has fallen, otherwise…nope.
Question 2…buying less that 1 unit is what they call it ‘odd lot’ (which is equivallent to 1000 shares). You may refer to Bursa Rules Securities under Chapter 7 for odd lot trading.
Hi KC,,I’m 21 years old.I’m still studies in Business course, I’m very interested in this INVESTMENT..Is it OK to open the CDS without my income statement…????
I don’t think you will need income statement to open CDS account
Hi KC, i would like to ask about the online trading and exactly how does it work??
Hi FR,
Bursa Malaysia has made it a requirement that you sign up for e-Dividend as well during account opening. Purpose if for your traded counter dividend to be credit directly into your bank account.
if you do not have an income statement, Bursa Malaysia will also accept bank-in receipts. photocopied of your check book. Easiest way is to bank in RM10 into your personal bank account and submit the bank in slip to the bank as a supporting for registration for e-Dividend.
Note that Bursa Malaysia only accept saving / personal account.
hi Sir,
I would like to invest in Malaysian stock, pl help how i can invest as a non Malaysian citizen.
thanks in advance for helping me in this regard.
regards
obaied
Hi Obaied,
Non-Malaysians are allowed to open CDS & trading account. Go to a stockbroker/investment bank and bring along your passport and RM10 being account opening fee. The bank will conduct a check to ensure you are not a bankruptcy or defaulter.
Certain stockbroker/investment bank may impose their own bank policy or credit rating for foreigner. You may need to inquire the bank further on this.
hi kc,
is that possible to make 0.03sen profit on each share unit.
U said u started as student
but how u apply without income statement?
Dear KC,
Im invest/trad in malaysia stock & buy share below Rm0.10/unit. Starting for RM 1k ++ only. 1st time i made profit Rm300.00 for 1month. yesterday i got profit Rm 400 + for 1week +.
Question:
which market can make more profit? Malaysia/us/spore.
How to make profit daily?
Which share can make profit? <%volume/<%change
I hope u can share with me.
Thanks.
i want work of share market of malaysia. what is salery.
Dear KC,
I am thinking of open a cds account.
Can u advise me which one is better?
OSK securities or Maybank..
Waiting for your reply.
Thanks.
Anyone that’s convenient for you.
Dear KC,
I want to ask what is mean L.Vol , Volume,and TO/CP for investment stock?
Thanks~
I think first you need to find out what’s the short code stand for.
Volume is the amount of stock traded in that particular trading day.
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