STOCK TRADING IN MALAYSIA

Welcome to Stock trading in Malaysia

Ewen Chis's Fast Track Cash!

10 Great Ways to Learn Stock Trading as a New Investor

New investors taking their first steps towards learning the basics of stock trading should have access to multiple sources of quality education. Just like riding a bike, trial and error coupled with the ability to keep pressing forth will eventually lead to success.

One great advantage of stock trading lies in the fact that the game itself lasts a lifetime. Investors have years to develop and hone their skills. Strategies used twenty years ago are still utilized today. The game is always in full force.

So for new investors wanting to take their first steps, I offer 10 great answers to the simple question, "How do I get started?"

1. Open a Stock Broker Account

Find a good online stock broker or Investment Bank and open an account.  Familiarized with the layout and to take advantage of the free trading tools offered by their system.  You may find a broker and known their commissions and fees at  http://klse.i3investor.com/jsp/hti/brokers.jsp 

2.  Read books

Books provide a wealth of information and are usually inexpensive. Here on the site I have a full list of 20 great stock trading books for investors to consider. My personal all time favorite is How to Make Money in Stocks by William O’Neil, founder of CANSLIM Trading (find more books written by William O'Neil).

3. Read Articles
Articles can serve as a fantastic resource and are usually easy to understand and follow. Our free Stock Education page here on Stock Trading To Go lists over 100 unique investment articles broken down into categories. Everything from ETFs to margin trading and technical analysis basics are covered. I also recommend checking out investopedia.com.

4. Find a Mentor
A mentor could be a family member, a friend, a past or current professor, co-worker, or any individual that has a fundamental understanding of the stock market. A good mentor is willing to answer questions, provide help, recommend useful resources, and keep spirits up when the market gets tough. All successful investors of the past and present have had mentors during their early days.

5. Ask Lots of Questions
Having a place to ask questions and receive answers is a huge asset for any new investor. In school asking questions to a teacher/instructor/professor or leveraging online stock forums there is always someone readily available to help the cause. Some popular stock forums include Elite Trader and Trade2Win.

6. Browse Financial News Sites
News sites such as http://klse.i3investor.com serve as a great resource for new investors. By reading headline stories investors can expose themselves to different stock terms for example. Pulling quotes and observing fundamental data can also serve as another good source of exposure.

7. Consider Paid Subscriptions
Paying for research and analysis can be both educational and useful. Some investors may find watching or observing market professionals to be more beneficial than trying to apply newly learned lessons themselves. There are many paid subscription sites available including Dan Zanger, Investors.com, and Morningstar just to name a few.

8. Watch TV
Watch the business news on source for financial news. Even turning on some channels for 15 minutes a day will broaden an investors knowledge base. Don't let the lingo or the style of news be a nuisance, just simply watch and allow the commentators, interviews, and comments to soak in. Note though, over time you may find that a lot of the investing shows on TV are more of a distraction and overall full of crap. This is a natural occurrence; you are not alone.

9. Go to Seminars
Seminars can provide valuable insight into the overall market and specific investment types. Most seminars will focus on one specific aspect of the market and how the speaker has found success utilizing their own strategies over the years. Note all seminars have be paid for either. Some seminars are provided free which can be a beneficial experience, just be conscious of the sales pitch that will almost always come at the end.

10. Sign up for some groups and online forum

Knowledge are being shared with useful info on the overall market and also analysis on each stock at http://www.tradesignum.com

Stock analysis and forum

http://klse.i3investor.com/jsp/hti/brokers.jsp
INVEST IN MALAYSIAN STOCK MARKET

STEP BY STEP TO INVEST OR TRADE BURSA MALAYSIA

Step 1 – Open trading account

You have to open trading accounts with stock broker or participating organization that is registered with Bursa Malaysia. You can find the list of stock broker companies at Bursa Malaysia webpage. You are recommended to visit their office to open an account so that their representative can verify your documents.

Some stock brokers allow account opening via internet but you need to get your documents certified by Notary Public.

Step 2 – Choose between Nominee or Direct Trading Account

Normally, stock broker provide two different trading account namely Nominee and DirectTrading Account.

For Nominee trading account, basically you appoint your broker to hold shares on your behalf.  It means that, once you buy shares, your name will not show on the registration book of existing shareholders directly, instead it will show your Broker Name.

The advantage is, you do not need to do any paperworks such as fill up forms for bonus issue, right entitlements and others.  The most important is your broker have to remember the dateline for all the paperworks, not you.  But you still need to instruct them on what to do.

However, the disadvantage of nominee account are you are not eligible to apply for IPO and you may not receive the annual report or some gift vouchers easily.

Direct Trading account is exactly the opposite of Nominee Trading account.

You may choose to open nominee account with one broker and direct account with another broker.

Step 3 – Choose between Cash Upfront or Collateralised Account

Some brokers have an option for you to choose between Cash Upfront or Collateralised Account. For Cash Upfront account, total trading limit of the day is equal to the amount of cash you have in your trust account. The advantage of Cash Upfront account is lower brokerage fee.

For Collateralised Account, you are allowed to trade beyond the amount of cash that you have in trust account.  Normally, broker allows at least 2 times the amount cash that you have. On top of that, if you have shares in the attached CDS account, they also can be used as collateral to increase your trading limit.

Trust account is an account where your broker keep cash that you deposited.  They may pay interest on the money keep in this account.

Step 4 – Decide to invest Online or Offline

To invest or trade in Bursa Malaysia you can have either do it via Offline or Online but now, most of the brokers in Malaysia provide online trading platform.

For Offline Trading account, you will have a real people called remiser who will handle all your orders. You will have to contact your remiser through what ever means for buy or sell shares.

For Online Trading Account, all of your orders are made through internet application which nomally load through internet browser of your computer. Some stock broker also allow to do transaction via PDA phone or mobile phone.

The main advantage of Online trading Account over Offline Trading account is lower brokerage fee. For online trading account, you may call helpdesk for trading but they may impose high brokerage fee.

You can look at the list of stock broker companies that offering online trading here.

Step 5 – Open Central Depository System (CDS) account

Next, you have to open CDS account. Your chosen Stock Broker will assist you to open CDS account.

CDS account is an electronic account which maintain by Bursa Depository or formerly known as Malaysian Central Depository.

CDS account is used to keep track or your shares or stocks movement. Shares will be credited to your account when you buy and debited from your account when you sell on due date.

You need to fill and sign in CDS Opening Account Form (FMN01). At the same time you have to sign two copies of specimen cards and provide copies of your identity card (NRIC).  The fee for CDS account openning is RM10.

If you have multiple trading account, you have to open separate CDS account for each trading account. Sharing CDS account is not allowed.

You may choose from the long list of approved Stock Broking, Securities and Investment Banks :

LIST OF MALAYSIA STOCK BROKING, SECURITIES AND INVESTMENT BANKS

Other relevant post :

1. How to Determine Trading Settlement in Bursa Malaysia?
2. How to Buy and Sell Shares in Bursa Malaysia?
3. Comparison Between Direct CDS and Nominees CDS Account
4. 2011 Top 15 Largest Stock Brokers Trading in Bursa Malaysia
5. 2010 Top 15 Largest Stock Brokers Trading in Bursa Malaysia
6. How to Calculate Profit, Loss and Brokerage Fees in Stock Market Trading?
7. New Exciting Online Stock Trading at ecmmoney.com by ECMLibra
8. How to Invest or Trade in US Stock Market for non-US Citizen?
9. Prohibited Trading Activities in Bursa Malaysia
10. Comparison Between Online Stock Broker in Malaysia

How to Determine Trading Settlement in Bursa Malaysia?

Step 1 – Understand Settlement Date

In Bursa Malaysia, all buy or sell order have to be settled at 12.30pm on day T+3 where T is the day of transaction.

Basically, what it means is that you have to pay your purchase or deliver you sell transaction on the third day following the transaction day. However, weekend and public holiday are not counted.

If you buy shares, and fail to pay at T+3, your broker have the right to sell unpaid shares at T+4 morning at any price. We call this force selling.

If you sell shares, and you do not have the shares in your CDS account at midnight of T+2, Bursa will impose ‘Buy-in’ to your account.

‘Buy-in’ is a penalty where you have to buy back the all shares that you sold from the openmarket 10 bits or ticks higher than the last closing price.

Step 2 – Trading Settlement

If you buy shares, then you have to pay before T+3, 12.30pm. Normally, broker will set off automatically from funds that are available in your trust account. If the fund is insufficient then you have to deposit additional cash into yout trust account.

Buying settlement are calculated as follow

Total Buy Settlement (RM) = Value of Shares + Brokerage Fees + Clearing Fees + Stamp Duty

Shares that you purchase will be credited to your CDS account at T+3.

If you sell shares, make sure that you own the shares in the particular before that. You are allowed to transfer shares from other CDS account by T+2 to avoid Buy-In.

Selling settlement  are calculated as follow

Total Sell Settlement (RM) = Value of Shares – Brokerage Fees – Clearing Fees – Stamp Duty

Cash from sell proceed will be credited to your trust account at T+3.