How to Buy and Sell Odd Lot Shares on Bursa Malaysia
•By Mahersaham
Artikel ini juga tersedia dalam Bahasa Melayu
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Have you ever heard of odd lot shares?
As we know, the minimum transaction on Bursa Malaysia is 1 lot, where 1 lot equals 100 units.
1 lot = 100 units
Don''t you find it odd that odd lot shares even exist?
It''s actually not that surprising why odd lot shares exist. There are legitimate reasons behind it.
Want to know why odd lot shares come about?
Odd lot shares exist due to several reasons:
What do these three things have to do with odd lot shares?
Read on if you want to learn more about odd lot shares.
Imagine you bought shares in a company and your existing holding is a small number of units.
Shortly after, a corporate exercise takes place.
A bonus issue or share split occurs.
In this example, we look at a bonus issue by QL Resources Berhad.
Suppose you hold 300 units of QL shares, which equals 3 lots.
Based on the announcement, QL will issue 1 bonus share for every 2 units held.
Therefore, you are entitled to receive 300 / 2 = 150 bonus units.
150 units equals 1 lot (100 units) plus an extra 50 units.
Your total updated shareholding is 450 units, which is 4 lots (400 units) plus an extra 50 units.
It is this shortfall of units that does not make up a full lot that causes the shares to be classified as odd lot.
Holders of a direct CDS account can buy shares and are eligible to attend the AGM.
Did you know that by purchasing as few as one unit of shares, you are already qualified to attend the AGM?
Benefits of attending the AGM:
How does arbitrage work in this context?
It happens because the market is not always efficient, and some parties take advantage of this to profit.
Let me give you an analogy to make the concept easier to understand.
A boxed drink of brand XYZ is sold for RM1 in Melaka, but the same drink is priced at RM2 when traded in Kuala Lumpur.
So, someone buys the XYZ boxed drink in Melaka and sells it in Kuala Lumpur, thus making a profit.
Odd lot shares may be traded at a lower price in the odd lot market
Let''s open a platform to get clear proof.
First: Open the mplusonline.com platform.
Then log in after entering your username and password.
Second: Search for the counter and right-click, then go to odd lot info.
Refer to the diagram below:
After clicking the odd lots info button, a screen like the diagram below will appear.
You can compare the price between odd lot shares and regular shares.
In this example, the current counter is Company A.
The regular share price is 0.10 sen, while the odd lot share price is 0.005 sen.
As usual, fill in your username and password, then click login.
Next, select the counter you wish to buy.
Make sure you select c. Normal order (Odd Lots).
Done!
Congratulations, you are now eligible to attend the AGM.
To sell odd lot shares, use the same steps but click the SELL button instead.
Odd lot shares are shares held in quantities less than 1 lot (100 units). They typically arise from corporate exercises such as bonus issues or share splits that produce fractional odd units in an investor''s portfolio.
Yes, you can sell odd lot shares, but you need to select the "Odd Lot" option in your trading platform. For example, on Mplus, choose "Normal Order (Odd Lots)" from the dropdown menu before placing your buy or sell order.
In theory, odd lot prices follow the current market price. However, due to lower liquidity, odd lot orders may sometimes take longer to be matched compared to regular board lot orders.
To attend a company''s Annual General Meeting (AGM), you need to be a shareholder. By purchasing at least 1 unit of shares (an odd lot), you are already qualified to attend the AGM and may receive benefits such as door gifts.
Interested in starting your share investing journey? Open a CDS account with Mahersaham today.
Download our free stock basics ebook to learn from scratch.
Further reading: