Kuala Lumpur Stock Exchange (KLSE): What it is, How it Works

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Fri, 2024-Mar-01 10:11:13

File Photo: Kuala Lumpur Stock Exchange (KLSE): What it is, How it Works File Photo: Kuala Lumpur Stock Exchange (KLSE): What it is, How it Works

The Kuala Lumpur Stock Exchange (KLSE): What Is It?

Formerly known as the Kuala Lumpur Stock Exchange (KLSE), this Malaysian stock exchange is in Kuala Lumpur, the country’s capital. Founded in 1930, the KLSE was established primarily to facilitate the trade of Malaysian assets. Over the years, the exchange has changed its name multiple times, but it is currently known as Bursa Malaysia.

Traders can trade stocks, exchange-traded funds (ETFs), offshore Islamic assets, and other securities on the KLSE, one of the biggest exchanges in the Association of Southeast Asian Nations (ASEAN).

Knowing the KLSE, or Kuala Lumpur Stock Exchange

The Kuala Lumpur Stock Exchange is currently called Bursa Malaysia, as previously mentioned. Offering clearing, trading, listing, depository, and settlement services, the exchange is completely integrated.

It debuted a completely automated trading system towards the end of 2008.

Nine hundred according to the website, companies can use the market to raise funds through various economic activities.

The top 30 businesses listed on the Bursa Malaysia Exchange comprise the Kuala Lumpur Composite Index (KLCI), formerly the FTSE Bursa Malaysia KLCI.

Bursa Malaysia facilitates trading a wide range of financial instruments, such as bonds, stocks, exchange-traded products (ETPs), real estate investment trusts (REITs), and derivatives. To serve the country’s predominantly Muslim population, there is also an Islamic market team that advocates for financial markets that adhere to Shariah.

This market comprises Islamic banking, Shari’ah-compliant trading platforms, and domestic and offshore Islamic assets. It was established in 2009.

There are three alternatives accessible to companies that wish to list on the exchange: the ACE market is for companies with growth potential, and the primary or prime market is for large, established corporations.

The last choice, the LEAP market, is intended for emerging small and mid-sized businesses. Additionally, Bursa Malaysia collaborates with other multinational companies and exchanges to advance efficiency and openness in the world’s financial markets. For example, it partnered with the Chicago Mercantile Exchange (CME) to sell derivatives.

This contract is in effect through 2025.

Particular Points to Remember

Currently, traders can only short-sell exchange-traded funds based on equity, but this could change in the future. Bursa Malaysia published a consultation document in July 2018 asking for feedback on a proposed ETF change.

This call was made in response to recommendations made by an ETF task group that comprised representatives from the Securities Commission Malaysia (SC), Bursa Malaysia, and other market players to increase investor interest in ETFs. The task team recommended incorporating ETFs and suggested doing the following:

ETFs based on futures
ETFs with leverage
Reversing ETFs
Physically supported exchange-traded funds
Unnatural ETFs

The proposed rule amendments aim to facilitate the short-selling framework by allowing different types of ETF units to be shorted, hence serving these aims.

The Kuala Lumpur Stock Exchange’s (KLSE) history

The exchange was first founded as the Singapore Stockbrokers’ Association in 1930. This was the country of Southeast Asia’s first securities venture. It was once known as the Malayan Stock Exchange and the Stock Exchange of Malaysia, among other names. The exchange was formed as a business in 1976, and public securities trading started in 1960. In 2004, the exchange was demutualized as a means of focusing more on the needs of its customers.

A company with member ownership becomes a shareholder company after demutualization. The name was changed to Bursa Malaysia due to this change of ownership.

Conclusion

There used to be a stock market in Kuala Lumpur, but now there is Bursa Malaysia.
This is one of the biggest markets in the Association of Southeast Asian Nations and is completely computerized.
The market has stocks, mutual funds, Islamic assets held abroad, and other types of securities.
The top 30 companies on the Bursa Malaysia Exchange make up the FTSE Bursa Malaysia KLCI, the exchange’s primary index.

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