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

Downloads

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 - 0.03% 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.
  • BursaMalaysia.com

Stock 101 Quiz

Stock Investment Course

Stock Investment Guide

What's the Return on Equity (ROE) and how to calculate it? (Video Tutorial)


KCLau
KCLau

Personal finance author and trainer

    412 replies to "How to Trade Stock at Bursa Malaysia: Investing Basic"

    • Henry

      Hi KC,
      I am new and intend to invest in stock trading. May I know what is the difference to have a stock trading account with the banks (eg: MBB, PBB) compare to online platform such as Rakuten Trade?

      • KCLau

        Hi Henry,

        Normally banks provide margin financing at a lower interest rate compared to non-bank brokers.
        I think all bank-brokers use nominee account for your trade. It means when the stocks declare dividend, mail out annual report, corporate exercises etc, will be mailed to the banks. In this case, banks will cash your cheque and deposit to you for some charges. It means you will have additional service from them.

        But for most non-bank brokers, you info is registered directly and you will get the annual report, cheque etc mailed to your mailing address.

        • Will Lim

          So which one better, any recommendations? hi

    • Sam Liew

      hi kc, since your post this in the year of 2012, may I know is the procedures still the same in the year of 2017?

      • L

        I m not the author, But i can ans you that it still the same Bro.

    • gua

      do all brokerages provide same dividend rate for trading fund per year?

    • Nasser

      Kindly advice if a foreigner can trade at the Malaysian stock exchange ?

    • naim

      hi ,
      Iam uni student, can i open my CDS account?
      iam thinking of using Maybank, it is a good choice?

      • KCLau

        Students are eligible too.

      • Jun

        Hi Naim, I’m Jun from UOB Kay Hian.

        UOB provide consistently educational support such as:
        – market outlook & stockpicks (monthly)
        – fundamental analysis & technical analysis training (biweekly)
        – platform training (biweekly)

        Please do not hesitate to ask me for more details.

        Contact me via http://www.wasap.my/60162413687/uobkayhian

        Thank you.

    • A.M

      Hello there, in the articles it mentions that we need to provide our income statement in order to open a cds acc. But, I’m a student how do I provide it as I’m not working?

      • KCLau

        Income statement is not required.

    • Ariffin

      Good afternoon. How do I calculate the PE of the company

      • KCLau

        Take the price = market cap = number of shares x stock price
        Take the earnings = net profit (from annual report income statement)

        PE ratio = Price per earnings (P/E)

    • kl boy

      HI KCLau , paid RM10 to apply for cds account and after all no more fees will be charge and its permanant?

      • KCLau

        no more fee after that unless you transact.

    • Jun

      I’m Junn, from UOB Kay Hian.

      As low as just ** 0.1% and MIN RM 8 ** brokerage fees.

      *** not require any special T&C, applicable for all.

      No need walk in to our branches. Contact me for arrangement.

      # Consistently educational support
      – market outlook & stockpicks (monthly)
      – fundamental analysis & technical analysis training (biweekly)
      – platform training (biweekly)
      # Special technical analysis tools
      – ChartGenie: monitors your portfolio & alerts you for technical chart break signals
      – TechAnalyzer: screen stocks through technical strategies & patterns
      # Profit & loss calculator
      # provide 2.38% interest per annum in trust account

      Contact me via http://www.wasap.my/60162413687/uobkayhian or ericyapjun@gmail.com

      Happy trading.

    • Rob

      I am Filipino working here in MY. Can I participate in MY’s stock market?
      Thanks in advance

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