Do you want to invests overseas, but is not sure how?
Do you want to invest into the largest stock market in the world (NYSE) but have no idea how?
Do you want to invest in high flying technological stocks such as Apple and Microsoft but wonder how to do it?
Do you want to invest into the second largest wealth generator in the world, that is China/HK stock market?
Do you want to invest in just about any large and reputable company, in almost the entire world?
Now you can!
Basically, short selling means that investors sell a share without first having it. Short selling is a technique used by investors to profit from the falling price of an overpriced market.
In Bursa Malaysia, short selling is regulated under Regulated Short Selling (RSS) and Securities Borrowing and Lending (SBL) guidelines, which introduced to the market on 3rd January 2007. Prior to 2006, short selling was banned for about 8 years.
RSS means that investors sell a share without first having it, but they have to borrow it from the Central Lending Agency (CLA). CLA is an agency managed by Bursa Clearing where all lending and borrowing are taking place. Investors don’t deal directly with the CLA, but they have to go through the approved Participating Organisation (PO) or investment bank.
For those who have excess shares, you may lend it to the CLA and earn some fees.
1. How to participate in RSS?
When opening a trading account with a Stock Broker (Participating Organization or Investment Banks) a CDS account will be opened at the same time. Normally, stock brokers can offer Direct CDS or Nominee CDS Account.
CDS stand for “Central Depository System” and it maintain by Bursa Malaysia Depository Sdn Bhd. Previously it was known as Malaysian Central Depository (“MCD”).
Each CDS account have its own advantage and disadvantage. The table below highlighted the different between the two.
This post is the continuation of the previous post, “Why Should I Invest or Trade in US Stock Market?”
There are two ways for you to invest in US Stock Market. The first option is invest via our local brokers such as RHB Investment Bank and the second method is to open an account with US based brokers.
I prefer to use the second option by opening an account with US based brokers. The main reasons I choose US based broker are, lower brokerage fees and less forex risk or currency exchange rate. This article will focus on that. If you prefer to invest via local (Malaysia) Stock Broker, you may want to look at “How to Invest in Overseas Stock Markets Easily“.
For comparison, our local brokers may charge about RM40 (~USD13.00) per trade while with US broker, the charges is as low as ~RM8 (USD2.50) per trade. Regarding forex risk, some of the local brokers you have to do currency exchange each time transaction is made. This is not the case if you are using US based brokers.
Basically, there are a few ways to apply for IPO such as via ATM machines and internet banking. For me the easiest method is via internet banking as I can do it anywhere providing I have internet connection.
Before you start, make sure you follow these rules,
- Malaysian citizen above 18 years old.
- Malaysian citizen residing in Malaysia
- Active CDS account registered under your own name. Nominees or third party CDS Accounts are not allowed. If you don’t have CDS account read here on how to open.
Below are step by step guides on how to apply for PCGB IPO via CIMBClicks. The step to do it via Maybank2U very much similar except the first 3 steps. You have to go in “Investment” & “eShare” menu.
I believe it should be very close if you do it via other bank internet banking as well.