Bursa Malaysia

Bursa

The FBM KLCI is a tradable index comprises of the 30 largest companies in the Bursa Malaysia by market capitalization. The index’s a component underwent a review on 8th December 2011

The prediction made earlier, was partly correct. Bumi Armada, UEM Land and AirAsia are joining the KLCI to replace PLUS, MISC and Gamuda. UEM Land’s inclusion is effective from 13th December while Bumi Armada and AirAsia will be part of the index from 19th December.

With Gamuda drop from the index, there is no longer any construction representative in the index. However, the inclusion of UEM Land into the index gives a property sector representation.

The table below is the new FBM KLCI component’s stock together with their sector, market capitalization (actual & adjusted) and weightage.

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Bursa

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?

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Stock Exchange

Most of the stock market in the world does not performing well in Q3 2011. When compare Q3 2010, only 13 out of 51 stock markets in the positive territory and Busa Malaysia was one of them.

In the same period, market capitalization for Bursa Malaysia increase by 1.10 percent if measured by Malaysian Ringgit but decrease 2.2 percent if the measurement made based on US Dollar. The decrease is due to strengthing of Malaysian Ringgit.

The top 2 world’s best-performing stock markets are Irish & Tehran stock exchanges. Both showed more than 40 percent increase. Meanwhile, the worst stock exchanges are Cyprus and Athens stock exchanges, which decrease more than 40 percent.

The table below is world stock exchange rank based on previous 1 year data.

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Central Depository System

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.

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Stock Exchange

2010 was a good year for stock market world wide. Most of them are in positive territory and growth except for those country that affected by economic crisis such as Greece.

The following table shows world’s largest stock exchange  in terms of market capitalization as of 31st December 2010.

Bursa Malaysia retain its 24th position since Q3 2010 with 24% increase in market capitalization.

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