What Is Bursa Malaysia? Everything You Need to Know
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
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Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange (KLSE), is a platform that provides a marketplace for companies and the public (investors) to buy and sell shares.
In the past, Bursa Malaysia was known as the Kuala Lumpur Stock Exchange (KLSE) and its origins date back to 1930.
The Singapore Stockbrokers' Association was established as an official organisation for securities in Malaya.
It was later registered as the Malayan Stockbrokers' Association in 1937. However, this platform still did not provide public share trading services.
The Malayan Stock Exchange was established in May 1960. It began conducting public share trading activities that year.
The following year, in 1961, a board system was introduced. There were two trading rooms — one in Singapore and one in Kuala Lumpur.
In 1964, the Stock Exchange of Malaysia was officially formed. However, the following year, after Singapore and Malaysia separated, the stock exchange operated under the Stock Exchange of Malaysia and Singapore (SEMS).
Due to the end of the currency interchangeability system between Malaysia and Singapore in 1973, SEMS split into two: the Kuala Lumpur Stock Exchange Bhd (KLSEB) and the Stock Exchange of Singapore (SES). Malaysian companies continued to be listed on SES and vice versa.
A new company limited by guarantee, the Kuala Lumpur Stock Exchange (KLSE), took over operations as the stock exchange from KLSEB. In 1994, it was renamed the Kuala Lumpur Stock Exchange.
The stock market is a place where companies can raise capital so that a business can be developed.
This usually happens when a company wants to expand its business but its existing capital is insufficient.
A growing company typically needs capital to further grow its business. The money needed can be used to buy equipment or machinery, purchase land, buy warehouses, pay employee salaries, or pay off company debts.
To obtain that capital, a company can do so by selling its shares to the public by listing on Bursa Malaysia. This process is called an 'Initial Public Offering (IPO)'.
The IPO process involves the buying and selling of company ownership shares between the public and the company. The company offers its shareholding, and investors purchase it at a set price.
It's not easy to list a company on Bursa Malaysia. There are strict criteria that must be met for a company to qualify for listing on Bursa Malaysia.
If someone wants to buy stocks or shares, they need to conduct the transaction through a registered broker.
Further reading on IPOs, how to buy IPOs through a broker and how to buy IPOs through MITI
The stock exchange also opens the door for individual investors, especially those who don't have large capital, to buy shares and profit from the stock market.
As long as someone can buy the minimum lot offered, they can own shares in a corporation just like any other professional investor.
You can also buy Bursa Malaysia's own shares as it is listed on the Main Market under the financial services category. However, do note that this stock is not Shariah-compliant.
How has this counter performed so far? Looking at the period from May 2012 to 2019, this counter was in an uptrend.
How do you invest on Bursa Malaysia? You need to open a CDS account first for a fee of RM11.
Mahersaham provides assistance with CDS account registration with broker M+.
Bursa Malaysia is Malaysia's official stock exchange that provides a platform for companies and investors to buy and sell shares. Formerly known as the Kuala Lumpur Stock Exchange (KLSE), it now offers various investment instruments.
The Main Market is for large, well-established companies with high market capitalisation, while the ACE Market is for smaller, growth-oriented companies. Both can be traded through a CDS account.
Opening a CDS account costs only RM11. A CDS account functions as your electronic share depository account and is mandatory before you can buy shares on Bursa Malaysia.
Yes, Bursa Malaysia is listed on its own Main Market under the financial services category. However, note that Bursa Malaysia shares are not included in the Shariah-compliant list.
Bursa Malaysia provides investment opportunities for everyone — start your investment journey by opening a CDS account today.
Open a CDS account and start investing in stocks listed on Bursa Malaysia — Open a CDS Trading Account now.
Get the free stock market basics ebook to understand how Bursa Malaysia works — Download free ebook here.
Further Reading: