Bursa Malaysia

Posted By Steve On Sunday, October 11th, 2009 With 0 Comments
Bursa Malaysia
Website: Bursa Malaysia
Contact: Contact Bursa Malaysia

Overview:
Bursa Malaysia Bhd (Bursa Malaysia)
Bursa Malaysia Bhd (formerly known as the Kuala Lumpur Stock Exchange, KLSE) was formed on December 27, 1976 in conjunction with the Securities Industry Act, 1973. At that time the KLSE was a company limited by guarantee without share capital and incorporated under the Companies Act, 1965.

With the demutualization of the KLSE on January 5, 2004, KLSE became a public company limited by shares. Effectively, the KLSE has vested and transferred its stock exchange business to its wholly-owned subsidiary Bursa Malaysia Securities Bhd (Bursa Securities), while the demutualized KLSE has been approved as an exchange holding company known as Bursa Malaysia Bhd (Bursa Malaysia).

Bursa Malaysia Securities Bhd (Bursa Securities)
Bursa Malaysia Securities Bhd (Bursa Securities), a subsidiary of Bursa Malaysia Bhd (Bursa Malaysia), facilitates trading in securities of companies listed on the bourse. It is also responsible for market surveillance and enforcement of trading rules and listing requirements.

Securities dealing is carried out by stockbroking companies (SBCs), which are referred to as member companies of the Bursa Securities. The terms ‘member company’ and ‘SBCs’ are interchangeable.

Bursa Securities has three boards, the Main Board, Second Board and Malaysian Exchange of Securities Dealing and Automated Quotation Bhd (MESDAQ). A public company that has its shares listed on the Main and Second Board must comply with the listing requirements of Bursa Securities while the MESDAQ counters must comply with the listing requirements of MESDAQ.

LFX (Labuan International Financial Exchange)
The LFX was launched on November 23, 2000. Wholly owned by Bursa Malaysia, the LFX is a virtual global exchange that provides listing and trading facilities for a wide range of financial and non-financial products, including mutual funds, bonds, derivatives and insurance-linked products. Said to be the first of its kind in Asia, LFX is expected to boost Labuan’s position as an international offshore financial centre.

LFX is limited by shares and its’ authorized and paid up capital stands at USD5 million and USD100, 000 respectively. It is governed by the Offshore Companies Act 1990 and Labuan Offshore Securities Industry Act 1998. It is a self-regulated organization that will operate, manage, monitor and supervise its own market participants by way of its licenses, rules and regulations.

LFX promotes extensive use of multimedia and Internet facilities. Trading of LFX securities do not attract any capital gains tax, contract note duties and exit levies.

Trading on LFX is carried out via LFX’s Electronic Bulletin Board. All financial instruments available for trading are posted on the board and trading agents, who are the only people who can deal on the exchange, post their indication of interest to buy or sell on the board. Any interested trading agents will conduct their own negotiations. The trade will only be considered complete when the report of the trade by both buyer and seller is received by LFX.

Bursa Malaysia Derivatives Bhd (Bursa Derivatives)
Bursa Malaysia Derivatives Bhd (Bursa Derivatives), formerly known as MDEX, was formed when the Commodity and Monetary Exchange and Kuala Lumpur Options and Financial Futures Exchange (KLOFFE) merged. It was launched on June 11, 2001. Bursa Derivatives is a futures and options exchange.

With effect from November 20, 2006, Bursa Malaysia migrated its derivatives products onto its new common trading system, Bursa Trade. The new system caters for faster processing and execution of more orders. It also enhances capabilities for the exchange to improve market liquidity and velocity as well as increase trading efficiency and quality of market surveillance.

Trading System
Trading on Bursa Malaysia Securities Berhad (Bursa Securities) (previously known as Kuala Lumpur Stock Exchange) is executed through stockbroking companies (SBCs). The automated trading system of the Bursa Securities comprise two major computer systems which are as follows:

* The SCORE (System on Computerised Order Routing and Execution) which is the central computer engine responsible for the matching of all trades
* The WinSCORE system (broker front end trading system) which is responsible for credit control management, order and trade routing as well as confirmation

All SBC’s are equipped with the WinSCORE system. The WinSCORE terminals are linked with the SCORE system to enable dealers to key in orders themselves and not through a central buyer. This allows a more timely execution of clients’ orders and a reduction of risk exposure for the dealers and the broking firms.

A subsidiary company of the Exchange, Bursa Malaysia Securities Clearing Sdn Bhd (Bursa Clearing ‘S’), (previously Securities Clearing Automated Network Services Sdn Bhd, SCANS), effects the clearing and settlement of all business done through SCORE. This provides for efficiency in terms of delivery of stocks and shares and settlement of accounts for the investing public and members of the Exchange.

Trading Hours – Equities

Trading Phases Normal Market and Odd Lot Market
1st Session Pre-Opening 8:30 am
Opening and Continuous Trading 9:00 am
Closing 12:30 pm
Lunch
2nd Session Pre-Opening 2:00 pm
Opening and Continuous Trading 2:30 pm
Pre-Closing 4:45 pm
Closing 4:50 pm
Trading at Last 4:50 pm – 5:00 pm

 

Trading Hours – Derivatives

Trading Phases Equity Derivatives
(SSFs/FKLI/OKLI)
Financial Derivatives
(FKB3/FMG3/FMG5)
Commodity Derivatives
Agriculture
(FCPO/FUPO/FPKO/OCPO)
Metal (FGLD)
Pre Opening 8:15:00 8:30:00 10:00:00 8:30:00
No Cancel 8:44:30 8:59:30 10:29:30 8:59:30
Trading 8:45:00 9:00:00 10:30:00 9:00:00
Intra Day Pause 12:45:00 12:30:00 12:30:00 12:30:00
Intra Day Pre-Open 14:00:00 14:00:00 14:30:00 14:00:00
No Cancel 14:29:30 14:29:30 14:59:30 14:29:30
Trading 14:30:00 14:30:00 15:00:00 14:30:00
Market Close/Surveillance 17:15:00 17:00:00 18:00:00 (FCPO/FUPO/OCPO)
18:05:00 (FPKO)
19:00:00
End of Day 17:30:00 17:15:00 18:15:00 (FCPO/FUPO/OCPO)
18:20:00 (FPKO)
19:15:00

 

OTC Market (not available for on-exchange listed securities)
Monday to Friday: 09:00 – 18:00

Pre-opening
Orders can be submitted, modified or cancelled. The system will broadcast a dynamically calculated price called the Theoretical Opening Price (TOP).

Sample Order Book

Broker Time Volume Price Price Volume Time Broker
1 09:35 2,000 MOO $31.90 2,000 09:31 9
2 09:30 1,000 $32.00 $31.90 8,000 09:40 10
3 09:41 8,000 $32.00 $32.00 10,000 09:35 11
4 09:32 6,000 $31.90 $32.00 4,000 09:43 12
5 09:40 3,000 $31.90 $32.00 2,000 09:44 13
6 09:44 2,000 $31.90 $32.10 6,000 09:42 14
7 09:43 2,000 $31.80 $32.10 2,000 09:43 15
8 09:41 1,000 $31.70 $32.20 4,000 09:31 16
$32.20 2,000 09:38 17

Orders are sorted by matching priority

Opening Auction
No new orders or changes to existing orders are allowed. The opening price and the matched instrument volume are broadcast. The system moves immediately from the Opening Auction phase into the Continuous Trading phase. If there are no trade matched in the opening auction period the opening price will be deemed the first traded price in the continuous trading session.

Determining the Theoretical Opening Price (TOP)

Possible TOP Total Bids Total Asks Matched Shares
$32.00 11,000 26,000 11,000
$31.90 22,000 10,000 10,000

The Theoretical Opening Price (TOP) is $32.00 as the most shares can be traded at that price

Continuous Trading
New orders can be entered and existing orders can be modified or cancelled. Each order is checked to see if can be executed immediately where unexecuted parts of an order are added to the order book depending on execution condition or validity. Matching is done on a price and the time priority.

Pre Closing
Orders can be submitted, modified or cancelled and starts immediately after the Continuous Trading session. All orders sent are automatically added to the order book without any executions taking place. The system will broadcast a dynamically calculated price called the Theoretical Opening Price (TOP).

Closing Auction
No new orders or changes to existing orders are allowed. Matched instrument volumes are broadcast. The Closing Price for each instrument is reached at this phase. If there are no executions during the Closing Auction the last traded price in the Contunous Session will be taken as the Closing Price.

Order Types:

Limit Order

A limit order is an order which has a price limit specified at the time of entry. A limit order is executed at the specified price or a better price. Buy limit orders can match at prices less than or equal to the limit price. Sell limit orders can match at prices greater than or equal to the limit price. An incoming limit order can match with multiple orders in the book at prices up to the limit price specified.

Market Order (An order with no limit price)

A market order is an order that shall be executed at the best available price(s) as quickly as possible. Only the order quantity needs to be specified when a market order is entered into the system. Unmatched quantity will remain in order book with highest priority status.

Market To Limit (MTL) orders

A Market to Limit (MTL) order is an order that is executed at the best opposite order price limit on the market when it is introduced in the system. If it is not completely executed, the Market To Limit order is put in the book for the remaining quantity at the execution limit.

  • This type of order is available in continuous trading phase only.
  • Order price is not required for MTL order type.
  • Only quantity needs to be specified during order entry.
  • MTL order is not acceptable if there is no opposite side order.
  • MTL order can be entered with a minimum quantity specified.

Enter Market To Limit Order (MTL)

Initial Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.31 200
003 LMT 2.31 100

Transaction entered: Buy MTL #004 quantity 1000

Executed:

  • Order #004 is executed with #002 at price 2.31, quantity 200
  • Remaining quantity order #004 is put in the order at price 2.31, quantity 800

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
004 LMT 2.31 800 003 LMT 2.32 100
001 LMT 2.30 200

Fill and Kill Market order (FAK MO)

This is an order which is immediately executed for all possible quantity on the opposite side, and the remaining quantity if any, will be automatically eliminated by the trading system.

  • This type of order is available in continuous trading phase only.
  • Order price is not required for FILL and Kill Market order type.
  • Only quantity needs to be specified during order entry.
  • Fill and Kill Market order can be entered with a minimum quantity specified

Enter Fill And Kill (FAK) Market Order (MO)

Inital Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.31 200
003 LMT 2.32 100

Transaction entered: Buy MO FAK #004 size 1000

Executed:

  • Order #004 is executed with #002 at price 2.31, quantity 200
  • Order #004 is executed with #003 at price 2.32, quantity 100
  • Remaining quantity order #004 of 700 is eliminated

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200

Fill And Kill (FAK)

Orders used in combination with Fill & Kill (FAK) type validity is an order requiring that all or part of the order to be executed immediately after it has been put to the market. Any portions not executed are automatically cancelled by the trading system.

Enter Limit Order with FAK validity

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.32 300

Transaction entered: Buy LIMIT FAK #003 at price 2.32, quantity 1000

Executed:

  • Order #003 is executed with #002 at price 2.32, quantity 300
  • Remaining quantity order #003 of 700 is eliminated

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200

Enter Market To Limit Order (MTL) with Fill And Kill (FAK) validity

Initial Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.31 200
003 LMT 2.32 100

Transaction entered: Buy MTL FAK #004 quantity 1000

Executed:

  • Order #004 is executed with #002 at price 2.31, quantity 200
  • Remaining quantity order #004 of 800 is eliminated

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 003 LMT 2.32 100

Minimum Quantity

Orders used in combination with minimum quantity type will be immediately executed at the minimum quantity the least otherwise the order is eliminated. Minimum quantity is used in order to control the minimum size to be traded.

Enter Limit Order with Minimum Quantity Validity type

Initial Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.32 300

Transaction entered: Buy LIMIT #003 at price 2.32, quantity 1000 and minimum quantity 500 (not available)

Executed:

  • Order #003 is eliminated.

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 003 LMT 2.32 300

Enter Limit Order with Minimum Quantity Validity type

Initial Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.32 300

Transaction entered: Buy LIMIT #003 at price 2.32, size 1000 and minimum quantity 300 (available)

Executed:

  • Order #003 is executed with #002 at price 2.32, quantity 300
  • Remaining quantity order #003 of 700 is put in the book

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
003 LMT 2.32 700
001 LMT 2.30 200

Enter Fill And Kill (FAK) Market Order (MO) with Minimum Quantity Validity type

Initial Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.31 500
003 LMT 2.32 100
004 LMT 2.33 100
005 LMT 2.34 100

Transaction entered: Buy FAK MO #006 quantity 1000 and minimum quantity 400 (available)

Executed:

  • Order #006 is executed with #002 at price 2.31, quantity 500
  • Order #006 is executed with #003 at price 2.32, quantity 100
  • Order #006 is executed with #004 at price 2.33, quantity 100
  • Order#006 is executed with #005 at price 2.34, quantity 100
  • Remaining quantity order #004 of 200 is eliminated.

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200

Enter Fill And Kill (FAK) Market Order (MO) with Minimum Quantity Validity type

Initial Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.31 100
003 LMT 2.32 100
004 LMT 2.33 100
005 LMT 2.34 100

Transaction entered: Buy FAK MO #004 quantity 1000 and minimum quantity 500 (not available)

Executed:

  • Order #004 is eliminated

Remaining Order Book:

Buy Order Book
Sell Order Book
# Type Price Qty # Type Price Qty
001 LMT 2.30 200 002 LMT 2.31 100
003 LMT 2.32 100
004 LMT 2.33 100
005 LMT 2.34 100

Security Identifiers
ISIN: ISIN is the standard securities identifier for all Bursa Securities listed securities and SSTS eligible instruments For all other unlisted and delisted securities, only the subcustodian’s internally assigned security code is available as the securities identifier.

Other: None

Instruments
Equities: Shares, ordinary shares, preference shares, participating preference shares, cumulative preference shares, redeemable preference shares, convertible preference shares, founders’ shares or management shares, property trust units, transferable subscription rights/warrants.
Debt: Bonds (straight, fixed and non-convertible), promissory notes, Malaysian government securities, debentures, loan stock, subordinated loan notes.
Money Market: Treasury bills, bankers acceptances, negotiable CDs, trade bills, government-issued investment certificates, floating rate negotiable CDs, revolving underwriting facility, notes issuance facility.
Other: Real Estate Investment Trust (REIT) and Exchange Traded Funds (ETF)

Board Lots

Equities: Shares quoted on the Bursa Securities are traded in quantums of 100 units, per board lot.
Odd lots are traded on the “odd lot” board or transacted by private negotiation through a direct business transaction.
Debt: No set board lots, however trades are usually contracted in multiples of MYR 5 million. Debt instruments listed on the Bursa Securities are traded in standard board lots of 100 units each.

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