Investors Can Soon Trade Smaller Share Lots, Fractional Shares

Alex Cheong Pui Yin

27th July 2023 - 2 min read

Prime Minister Datuk Seri Anwar Ibrahim has said that investors who trade stocks will soon be allowed to trade in smaller share lots, as well as tap into fractional trading. This comes as the government continues to seek ways to boost retail participation in Malaysia’s equity market and to revitalise the capital market.

This latest initiative complements an earlier move by the government to lower the stamp duty for shares traded on Bursa Malaysia from 0.15% to 0.1% of the contract value, subject to a maximum cap of RM1,000 per contract. Implemented in mid-July, the lower stamp duty is aimed at directly reducing the cost of securities transactions, thereby leading to a more competitive Malaysian stock market.

Aside from introducing steps to encourage retail investors, Datuk Seri Anwar – who also serves as the Finance Minister – said that the capital market, too, must be transformed to become more vibrant if it were to entice investors. For instance, companies with the potential to become new local “unicorns” should be encouraged to list, and the Securities Commission Malaysia (SC) will also enable automatic transitions for companies that are listed on the ACE Market to the Main Market (once requirements are met).

(Image: The Malaysian Reserve/Razak Ghazali)

To explain, the ACE (Access, Certainty, Efficiency) Market is a sponsor-driven market, and is intended for fast-growing companies without requirements on their historical profit track record. Meanwhile, the Main Market is a platform for established companies that have achieved a minimum profit track record or size, as set by Bursa Malaysia.

Finally, Anwar noted that the SC will be developing a reform policy for financial markets, which seeks to meet a few objectives. These include facilitating investment for retail investors, attracting more investment to finance local small and medium enterprises (SMEs), and raising the competitiveness of Malaysia’s capital market at the international level.

(Source: The Edge Markets)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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