How to buy shares in Malaysia (2023)

This guide will take you through the basics, including how to buy shares online, how much it costs and whether it’s a safe option for you. If you’re ready to start buying shares, you can select an online broker in the comparison table below.

Step 1: Choose an online stock broker

Choosing an online stock broker can be one of the most challenging parts of the process. There are dozens of platforms available to Malaysian investors – some of them are offered by major banks, while others are provided by specialist stockbrokers.

While it might be more convenient to stick with your current bank, you could lose out in terms of brokerage fees. Instead, compare the features and fees of a number of platforms before choosing the right one for you.

• How to buy shares without a broker

  Just to clear up any confusion, stock trading platforms are technically brokers, just without the personal interaction. If you’re looking to buy shares online, you can use the table above to compare apps.

  There are also a few ways you can buy shares without a broker at all:

  • Managed funds. You access shares without a broker by investing in a managed fund. These funds typically hold multiple company stocks which are selected by a fund manager.
  • IPOs. Some crowd-funding platforms allow you to buy shares when a company first lists on a stock exchange, called an Initial Public Offering (IPO).
  • Your company. Some firms offer their staff company shares as part of their employment contract. These are called employee share schemes.
  • Off-market transfer. It’s possible to inherit shares or be given shares by someone else without a broker. This is called an off-market share transfer.
  • Share purchase plan (SPP). Sometimes companies raise extra capital by selling new shares via an off-market share purchase plan. Typically, you invest in an SPP directly through the company itself.

Sort by:

Name	Product	Interest on deposit?	Intraday trade	CDS fee
Zacks Trade		No	Yes	N/A	CFD Service. Your capital is at risk. The Zachs Trade platform offers stocks, ETFs, bonds, options, and more with access to more than 90 exchanges worldwide	Go to site More Info		loading Fetching your data...
Alliance Bank Trading Account		Yes	Yes	N/A	CFD Service. Your capital is at risk. Trade on-the-go and diversify your portfolio with a myriad of investment products, ranging from bonds to unit trusts.			loading Fetching your data...
CIMB Trading Account		Yes	Yes	RM0	CFD Service. Your capital is at risk. Access multiple stock exchanges,  exclusive research materials, real-time portfolio management, and other trading conveniences to grow your investments.			loading Fetching your data...
Hong Leong Trading Account		Yes	Yes	RM10	CFD Service. Your capital is at risk. Enjoy the flexibility of bursa trading and access global markets with a single platform.			loading Fetching your data...
Rakuten Trade Trading Account		Yes	Yes	Free	CFD Service. Your capital is at risk. Benefit from low fees and earn reward points when you trade on this all-in-one digital brokerage.			loading Fetching your data...
RHB Trading Account		Yes	Yes	RM10	CFD Service. Your capital is at risk. Trade in futures, shares, and warrants across major foreign markets with Malaysia's largest investment bank.			loading Fetching your data...

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What you need to consider when picking a broker:

• Brokerage fees. This is the fee that applies to each buy or sell transaction. Depending on the platform you choose and the size of your transaction, this could be a flat fee or a percentage of the total transaction cost.
• Other fees. Brokers can charge all kinds of additional fees to use their platform. Some of the most common include an inactivity fee, subscription fee and foreign exchange fee.
• What you can trade. Some platforms offer access to Bursa Malaysia only, while others also allow you to trade on stock exchanges all around the world.
• Ease of use. Consider how easy each platform is for the type of trading you want to do. Most providers give you the option of a free demo account for a short period so you can trial the features they offer.
• Who the platform is suited for. Some stock brokers are designed with casual investors in mind, others are more suited to active and experienced traders.
• Customer support. How easy is it to get in touch with the provider if you ever have any issues? Is their customer service team based locally in Malaysia?

Step 2: Sign up for a CDS and a trading account

Once you’ve chosen a platform you’ll need to register for a Central Depository System (CDS) account and a trading account. This step is usually free, but keep in mind that some providers may charge subscription fees or ongoing fees for features such as market research.

The registration process takes place online and if you’re a new customer you’ll need to provide:

• Your name, address, date of birth and contact details
• Copies of NRIC for Malaysian or passport for non-Malaysian citizen
• Latest bank statements or savings passbook
• Latest EPF statements, pay slips or EA form

You’ll usually be asked to deposit a specified minimum amount in order to open an account. Once your application has been assessed and approved, it’s time to start trading.

CDS account

Managed by Bursa Malaysia, the CDS account provides an integrated clearing, settlement and depository facilities for investors in the Malaysian securities market. The trades are registered under your name and credited into your CDS account.

Pros

• Centralised location for your investments. You have the option to trade using different brokerages, but view all your stock holdings in a single account.
• Shareholder rights. By holding shares in your own name, you’d get to enjoy the perks of being a shareholder of the company (e.g. attending annual general meetings and entitled to voting rights).

Cons

• Higher trading fees. CDS accounts are usually subject to higher brokerage fees.
• Additional fees. CDS charges an account opening fee (RM10), a clearing fee (0.03% per transaction, maximum RM1,000), stamp duty (RM1 per RM1,000 amount of transaction, maximum RM200) and GST (6% on fees).
• Limited to local trades. The CDS account can only hold shares traded on Bursa Malaysia.

Nominee account

A nominee account is a depository that’s managed by the respective brokerage firm. All stocks and securities are transacted and held on your behalf under the brokerage’s name. This means that the stocks are legally owned by the brokerage house.

Pros

• Lower trading fees. Enjoy lower brokerage and minimum commission fees.
• Privacy. Private custodian accounts offers an added layer of privacy to large investors who prefer not to reveal their investment moves.
• Ability to invest in overseas markets. If you’re buying overseas stocks, you will require a nominee (custodian) account.

Cons

• Lack of shareholder perks. Since your investments are not registered in your name, you’ll not have access to shareholders benefits.
• Additional fees. Depending on the brokerage, you may incur extra costs such as account maintenance fees, foreign shares custody charges and corporate action handling fees. Also, you’d typically have to pay transfer fees if you wish to transfer investments into your CDS account.

Step 3: Choose the stocks you want to buy

You may have already decided what stocks you want to buy but if not, now’s the time to start researching stocks that match your investment goals. You’ll often be able to access a wide range of market research, analysis and even trading recommendations through your platform, so use this info to help make an informed decision.

You’ll also need to consider the number of shares you want to buy. This will obviously be down to your budget and your investment goals, but keep in mind that the minimum investment for every Bursa Malaysia-listed company you invest in is 1 lot which is equivalent to 100 shares. So if company XYZ is valued at RM2 a share, you’ll need to buy at least 100 shares.

It’s also worth pointing out that larger purchases may incur higher fees or involve different fee structures depending on the trade. For example, your platform may charge you RM30 as a brokerage fee to buy a smaller number of stocks, but will change the fee structure to 0.1% of the trade value when larger amounts are purchased.

Step 4: Place your order

This is where things can get a little confusing for novice stock traders. You have two main options when placing a trade to buy stocks: you can place the trade “at market” or “at limit”.

• Market orders. You place a market order when you want to buy a stock immediately at the best price currently available.
• Limit orders. Placing a limit order allows you to set a maximum purchase price for your buy order. If that price becomes available within your specified time period, your trade will be executed.

Depending on the platform you choose, you may also be able to take advantage of a range of conditional orders that allow you to take advantage of market opportunities. For example, by placing a rising buy order, you can instruct your online trading platform to buy stocks in a particular company once its stock price reaches a certain level.

Once you’ve entered all the specifics of your transaction, you’ll then get a chance to review all those details before placing your buy order.

Step 5: Pay for the transaction

You’ll need to have sufficient funds in your online stock trading account to cover the cost of the transaction, including the brokerage fees that apply. The trade settlement period on Bursa Malaysia is two business days, which is commonly referred to as T+2.

Step 6: Monitor the performance of your stocks

Now you’ll need to monitor the performance of your stocks in regard to your investment plan. However, the frequency with which you monitor them will depend on your strategy. For example, if you have a long-term investment strategy, you may only check in and see how your stocks are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week.

Whichever option you choose, you can review the performance of your investments by logging into your trading account.

Step 7: Sell your stocks (if you want to)

When you decide to sell your stocks, the process is very similar to the method of buying stocks described in Step 4. Once again, you can choose whether you want to sell them via a market order or a limit order. A market order means the stocks will be sold immediately at the best available price, while a limit order allows you to set the minimum sale price you’re willing to accept.

Next steps – Monitor the performance of your shares

Congratulations, you’ve bought some shares! If you’ve bought Malaysian shares, you should receive an email or letter confirming your status as a shareholder.

Keeping your investment plan in mind, the next step will be to monitor the performance of your stocks. How often you do this will depend on your plan. For example, if you have a long-term investment strategy, you may only need to check in every few months. If you have a short or medium-term strategy, it may be a good idea to check each night or each week.

Tips when buying stocks in Malaysia

If you want to get more out of your online stock trading, try to keep the following tips in mind:

• Do your homework. Making informed trading decisions is crucial to the success of your investments. Research the financial health and growth prospects of companies by poring over annual reports, keeping an eye out for company alerts, reading stock prospectuses and accessing research reports.
• Stay up to date with the Malaysian economy. Keep an eye on the health of the Malaysian economy, Central Bank interest rate decisions, government policy changes, levels of investor confidence, exchange rates and the performance of stock markets in Malaysia and overseas. All of these can influence when is and is not a good time for you to invest.
• Start with blue chip companies. One of the safest options for anyone starting out in the stock market is to invest in blue chip companies. These are Malaysia’s top 30 companies, as listed on the FTSE Bursa Malaysia KLCI (FBM KLCI), and are typically well-established companies. They usually offer the best chance for minimising your risk and providing steady returns.
• What about speculative stocks? Speculative companies are not in the top 100 Malaysian companies and have a shorter history doing business. Some investors are attracted to buying stocks in these companies because they offer the potential for large returns, but be aware that they also have the potential to suffer large losses.
• Buy what you know. Rather than diving in at the deep end and investing in a company which operates in a field you have little or no understanding of, start with industries and businesses you have some sort of background knowledge of.
• Diversify. If you want to minimise your exposure to risk, diversify your portfolio across a range of different industries. If you buy stocks across five or six industries instead of just one or two, you can be better protected against losses if one particular industry experiences a sharp downturn.

Frequently asked questions about buying shares in Malaysia

• What are bid, offer and last prices?

  Some brokers display the “bid”, “offer” (or ask) and “last” price of stocks. Think of these as similar to auction prices, where buyers and sellers are offering their best prices.

  A bid price is the highest price any trader is offering to buy a company’s stock at that moment and the ask or offer price is the lowest price any seller is willing to accept. The last price is the most current price – and also the last price bidders agreed upon.

  Although the last price is the stock’s most recent price, it’s not necessarily what you can expect to pay if you make a market order. Instead, you’ll be paying the latest bid price and you’ll get the ask price when you sell.

  These are the types of fees you may need to pay when you invest in stocks:

  • CDS account opening fee. A one-time fee of RM10 is charged when you open a CDS account to hold the assets you buy on Bursa Malaysia.
  • Broker fee. This is the fee charged by your broker or stock trading platform every time you buy or sell stocks. Brokerage or commission fees are around RM8-RM28 on most stock trading platforms.
  • Clearing fee. A clearing fee of 0.03% of the transaction value is charged to both buyer and seller with a maximum of RM1,000 per contract.
  • Stamp duty. The stamp duty is RM1 for every RM1,000 (or fractional part) of the transaction value with a maximum of RM200 per transaction.
  • Other fees. Depending on the brokerage and market you’re trading in, there may be other fees to look out for, such as currency conversion fee (for foreign stocks), account fees, custody fees (for US stocks) and inactivity fees. These are important considerations since any fees you pay your broker will reduce your earnings and impact how much you invest per trade.

• Do I need to pay taxes on capital gains or dividends?

  No. At the time of writing, Malaysia does not impose capital gains tax (CGT) on profits you make from shares, i.e. when you buy low and sell high.

  As for dividends, Malaysia is under the single-tier tax system, in which the profit tax submitted by a company is not charged to the shareholders. As such, dividend income and gains derived from the sales of shares will not be taxable.

• What is the minimum lot size?

  As mentioned above, the minimum board lot size of securities for Bursa Malaysia is 100 units. This means that you can make small investments in over 900 listed companies on Bursa Malaysia.

• What is the maximum value I can buy?

  The maximum value of shares you can buy online will again depend on your brokerage platform. Some platforms will have no maximum amount but will require you to have the necessary funds for your purchase in your trading account.

• How long will it take for my order to be processed?

  The time it will take for your buy or sell order to go through will depend on whether you lodge your order at market or at limit. For example, if you’re buying shares at market value, the order will be placed as soon as possible and the shares purchased at the best price available at the time. However, if you place your order at limit, you can stipulate the maximum price you are willing to pay and how long you will wait for the right market conditions to arise. The limit order will then stay on the market until your designated expiry date, and if it has not been executed by then, your order will be cancelled.

  Once a trade is executed through the clearing member, cash trades will be settled on T+2 (which is a shorthand for trade date plus two business days).

• Can I change or cancel my order?

  If you’re lodging a market order, your brokerage platform will most likely provide you with the opportunity to review and modify your order before submitting it. However, once it has been submitted, it will be processed as soon as possible.

  If you decide to place a limit order and it has not yet been executed, you will be able to amend or even cancel the transaction.

• What happens once I purchase my shares?

  Once you have purchased shares in a company, you literally own a small portion of that company. As the stock market fluctuates each day and the value of shares rises and falls, the value of your shares will similarly change. You’ll receive company reports and news updates so you can stay abreast of its performance and direction, while many companies will also pay out dividends (your share of the company’s profits or earnings) twice a year. It’s up to you to monitor the performance of your shares in line with your investment strategy and decide whether to sell, hold or buy more shares.