How to Buy Share at Bursa Malaysia and Earn from It?

Source: http://kclau.com/investment/how-to-trade-stock-at-bursa-malaysia-investing-basic/

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

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