Bursa wanted to grow retail trading
Filed Under (Bursa News) by Webmaster on 29-03-2010
Tagged Under : Bursa Malaysia
The chief of Malaysia’s stock exchange wants to see certain regulatory constraints removed to help improve retail participation in stock trading.
Constraints like the 30 per cent Bumiputera quota for licenced dealers, for example, has had an impact on limiting the growth of remisiers and dealers in the country.
This, in turn, has hampered retail investor growth.
“It’s fine to have this requirement, but if it’s getting in the way of the growth of the industry, then I think we should consider some other ways of encouraging more Bumiputera participation in the industry,” Bursa Malaysia Bhd chief executive officer Datuk Seri Yusli Mohamed Yusof told Business Times in a telephone interview.
He was commenting on his “wish list” of changes to improve Malaysia’s capital market.
“We want to have our capital market on a level playing field with other capital markets around us. So we hope some of these issues can be (addressed), if not at (the upcoming) Invest Malaysia 2010, then at least sometime in the near future,” he said.
Prime Minister Datuk Seri Najib Razak is expected to unveil initial details of a new economic model for the country at the conference on Tuesday, and this may include improvements to the capital market.
Bursa has for some years now been trying to improve retail participation in the stock market, with not much effective results.
“We rely a lot on the retail broker and remisier base to tap into the retail investors segment. But if you study the statistics over the last 10 to 15 years, the number of retail brokers and remisiers hasn’t grown,” he lamented.
The number of active remisiers has shrunk “quite substantially”, and this will get in the way of Bursa trying to grow the retail segment.
Retail investors constitute between 20 per cent and 25 per cent of trading value now, compared with about 60 per cent in 1999.
Yusli also thinks that more foreign brokers should be allowed to serve investors, particularly retail investors, as this would stir innovation in the industry.
Retail investors currently don’t have much choice in terms of who provides them products and services apart from local brokers, he said.
“We have a very strong middle-class, which I think is not being adequately serviced by our retail brokers,” he remarked
