Bursa Malaysia: Understanding the Former Kuala Lumpur Stock Exchange

The Kuala Lumpur stock exchange, formerly KLSE and now recognized as bursa Malaysia, stands as Malaysia’s primary stock exchange, centrally located in Kuala Lumpur. Originating in 1930, its core mission was to facilitate the trading of Malaysian securities, eventually undergoing rebranding to bursa Malaysia. It holds a prominent position within the association of southeast asian nations (ASEAN), offering a platform for trading various financial instruments, including equities, ETFs, and offshore Islamic assets.

Bursa Malaysia operates as a fully integrated exchange, offering an array of services encompassing clearing, trading, listing, depository, and settlement functions. Since its transition to a fully automated trading system in late 2008, efficiency and accessibility have significantly improved for market participants. With approximately 900 companies utilizing the exchange to raise capital, bursa Malaysia serves as a vital platform for economic growth.

The FTSE Bursa Malaysia KLCI, formerly known as the Kuala Lumpur composite index, acts as the primary benchmark for market performance, comprising the top 30 companies listed on bursa Malaysia. Beyond equities, the exchange facilitates trading in bonds, derivatives, ETPs, and REITs, catering to diverse investor preferences.

In addition, bursa Malaysia’s Islamic market segment underscores its commitment to shariah-compliant finance, addressing the needs of Malaysia’s Muslim-majority population. This segment encompasses both domestic and offshore Islamic assets, along with dedicated Islamic banking services.

Companies seeking to list on bursa malaysia have three distinct market segments to choose from: the main market, catering to large established corporations; the ACE market, tailored for growth-oriented companies; and the LEAP market, designed to support emerging small- and mid-sized enterprises.

Bursa Malaysia actively engages in partnerships with global corporations and exchanges to foster market development and transparency. Notably, its collaboration with the Chicago mercantile exchange (CME) to offer derivatives underscores its commitment to expanding investment opportunities for market participants.

Investors eyeing the Malaysian market should carefully consider various factors before making investment decisions.

Bursa Malaysia has proposed amendments to regulations governing ETFs to broaden investor interest. These proposed changes may involve permitting various types of ETFs, including futures-based, leveraged, inverse, physically backed commodity, and synthetic ETFs.

The origins of Bursa Malaysia trace back to 1930 when it was established as the Singapore stockbrokers’ association, marking a pivotal milestone in Malaysia’s securities industry. Evolving through various name changes, including the Malayan Stock Exchange and the Stock Exchange of Malaysia, it transitioned into a publicly traded entity in 1976.

In a strategic move to enhance market competitiveness, bursa malaysia underwent demutualization in 2004, transitioning to a shareholder-owned corporation. This transformation marked its evolution into bursa Malaysia, aligning with global standards and enhancing market efficiency.

The primary index of bursa Malaysia is the FTSE bursa Malaysia KLCI, composed of the top 30 companies listed on the exchange.

Companies can opt for listing on the main market for established corporations, the ACE market for growth-oriented companies, or the LEAP market for emerging small- and mid-sized enterprises.

Bursa malaysia is considering amendments to regulations governing ETFs to broaden investor interest, potentially allowing various types of ETFs such as futures-based, leveraged, inverse, physically backed commodity, and synthetic ETFs.