Malaysia can be more than just the last-minute holiday destination you always look to. When looking for somewhere to invest, the Malaysian market is a great choice. As a Singapore-based investor your broker will be able to trade in the Malaysian market for you without any difficulties By adding Malaysian equities to your portfolio you can add variety to your investments. This diversity will improve the chances of generating higher portfolio returns.

What To Know Before Buying Malaysian Equities?

The Malaysian Stock Exchange is known as Bursa Malaysia and is based in Kuala Lumpur, The Bursa Malaysia exchange is a moderately liquid market which means there are choices of different equities to buy and sell and different people for you to buy and sell with.  The normal trading hours are from 9 am to 1230pm and 230pm to 445pm – with a two hour lunch break in between.

Getting Started With Investing In Malaysian Shares

Trading in this market can be very convenient for you as a Singaporean investor – as there is no time difference between you and the Malaysian market. Your broker in Singapore will be able to buy and sell Malaysian equities for you.

How Malaysia Stock Exchange Works

All trading on the Bursa Malaysia takes place through electronic automated systems. Within the Bursa Malaysia there are a number of different trading markets.

The main ones are:

  1. The Bursa Malaysia Securities Bhd – a securities exchange and related services.
  2. Bursa Malaysia Derivatives Bhd –a futures and options exchange and related services and
  3. Labuan International Financial Exchange Inc. – an offshore financial exchange and related services.

Within the Bursa Malaysia Securities Bhd securities exchange there are two separate markets – the Main market which lists 823 companies and the Ace Market which lists 117 companies.

Lot Sizes For Malaysian Stocks

For trading in this market the minimum order size, the lot size, is 100 shares.

Major Sectors of the Malaysia Stock Exchange

The dominant sectors for investment in Malaysia are banking and finance, oil and gas and electronics and technology companies. The biggest stocks are Public Bank Bhd and Tenaga Nasional (Electricity) followed by Malayan Banking.  These are popular and well-established equity investment choices known for stable returns and low risk.

Major Indices For Malaysia Stocks

The FTSE Bursa Malaysia Index is a range of indices formed by Bursa Malaysia and the FTSE Group. The system involves a range of indices that track all eligible companies listed on the Bursa Malaysia Main Board and ACE markets. This series of indices is used to measure the performance of the major segments of the Malaysian market.

There are a number of different indices that cover different areas of the market. For example, the FTSE Bursa Malaysia Top 100 Index covers the 100 largest stocks on the Malaysian market and the FTSE Bursa Malaysia EMAS Industry Indices cover 10 Industries, 19 Supersectors and 39 Sectors.  There are a number of Shariah compliant indices to follow also – which are especially popular in Malaysia due to the culture of the geographic region.

The headline index for Malaysia is the FTSE Bursa Malaysia KLCI which covers the top 30 stocks in the market.

What To Look Out For When Investing In Malaysian Shares?

A really great feature of investing in this market is that Bursa Malaysia has a scheme called CBRS. This allows each and every investor access to free research reports of Bursa-listed companies. This is a great resource for you when making your equity selections.

This market also has a lot of options if you are looking for Shariah compliant investments.

The key difference for you when investing in Malaysian equities is the currency. You will be buying and selling equities in Malaysian Ringgit. Your broker will convert your Singapore dollars for you but you need to remember that the rate is not fixed. Most brokers in Singapore now provide multicurrency accounts. Having an account set up to trade in multiple currencies will make it simpler for you to monitor the currency changes involved with your foreign investments. This set up can lead to lower broker fees when it comes to exchanging your money. Monitor the exchange rate when making your investment decisions as it will affect your investment performance.

Keeping Track Of Your Equity Portfolio

It is a bad idea to put all your money into a single investment as you risk losing all of this if that one company goes under. Spread your investments over a variety of holdings; this is called diversification and will help create a higher return on your portfolio.

The New Savvy: Stock Markets

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C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore. She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen). Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).