WHAT IS THE LOWEST BROKERAGE FOR INTERNET TRADING AND CASH UPFRONT TRADES?
In this posting dated 10 August 2008, I want to let my reader know WHAT IS THE LOWEST BROKERAGE FOR INTERNET TRADING AND CASH UPFRONT TRADES that is available in the market when you trade shares in Bursa Malaysia.
Most Investment Bankers and Universal Brokers has a ‘gentleman’ agreement on the ‘Floor’ or Minimum brokerage for share trades using internet and shares trades for cash upfront. Here are the general guidelines:
(1) If a share is bought or sold using the stockbroker’s internet facility, stockbrokers will give a 30% discount on the standard brokerage rate with the minimum charge at RM28.00; (2) If a client has cash or trust in his share trading account prior to his Purchase order, the client can request for a 30% discount on the standard brokerage rate with the minimum charge also at RM28.00;
Note that Cash Upfront discount is only for Buy order. Sales order is not entitled for any discount as it is not included in the Ministry of Finance Budget announcement.
(3) If a client has cash in his share trading account and he key in his Buy order throught the internet, some stockbrokers will give you a double discount with the minimum brokerage still at RM28.00;
Example: If you have RM10,000 cash deposit in the share trading account before you Buy 10,000 shares at RM1.00 using the internet, your standard brokerage charge is RM10,000 x 0.6% = RM60. Your brokerage after the double discount is RM60 x 30% x 30% = RM29.40.Note: Not all stockbrokers will give you the double discount. The major stockbrokers only agreed on the minimum brokerage of RM28.
(4) If you have applied for ‘Day Trade’ rate for your account and if you buy via internet and/or do a cash upfront purchase, you can request for the discount with the minimum brokerage at RM28.
Note: A ‘Day Trade’ account is when you buy and sell the same share on the same trading day. Bursa guideline allow you to request for Day Trade brokerage rate of 0.15%.
Since the rate is already at 0.15%, most stockbrokers will only reduce the brokerage rate upto 0.1%.
SPECIAL BONUS!
Hong Leong Bank has offered the LOWEST brokerage rate in Malaysia. Only RM12!!! for Internet Trading.
Caveat : There is “Terms and Conditions Applied” statement in their advertisement. I don’t know what are their Terms and Conditions in order for you to get the RM12 brokerage rate as I don’t have Share Trading Account with Hong Leong Securities (their stockbroking subsidiary). My guess is that the Internet Purchase must also be Cash upfront and you would probably have to open a saving account with Hong Leong Bank in order for the stockbroker to directly debit your saving account for your purchases. My guess only. You will have to check with the bank yourself whether their rate is the THE LOWEST BROKERAGE FOR INTERNET TRADING AND CASH UPFRONT TRADES.
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