1) Investing Basics

Why Invest In Stocks?Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.The benefits include: Immediate Buy/Sell so you can sell part of your investment any time. Very low transaction cost. The freedom to work at your own place, at your pace in your own time. Easy monitoring - log in to the market from anywhere in the world. Being able to maximise returns whilst spreading your risk. A predictable form of investment if you know what you're doing. Putting you in control and freeing you of fund management fees. Considerable tax advantages.Things to watch out for: The market can be a volatile place. You must acquire knowledge of what you are doing. You must monitor your investments. You must learn the discipline to enter and exit the market on entry and exit signals.Can Ordinary People Profit from the Stock Market?Many people say things like "I'd love to get into the stock market" or "If I had more money, I'd invest in stocks". Many people also believe that to make a profit from the stock market you either need to be rich already, be a full-time investment trader or be a financial whiz.Not necessarily so.Let's take a look at three different scenarios of ordinary people in the stock market to see how they fared. This will let us view how the process works, the different approaches, and how returns are generated.

Scenario 1John works in a manufacturing plant earning RM33,000 a year. After rent, living and personal expenses, John has managed to save RM1,500 over the past 6 months that he wants to invest in the stock market. John buys 1,600 shares in ABC Mining at RM0.90 per share (RM1,440). He also pays RM32.95 brokerage fees for buying the shares. In total, John has invested RM1,472.95.Six months later John decides to sell his shares. He has kept an eye on the performance of ABC Mining and they have risen to RM1.19 a share. John sells his shares for RM1,904. He also pays RM32.95 brokerage fees for selling his shares, leaving him with RM1,871.05. That is a profit of RM398.10.RM398.10 may not sound a lot, but remember John only invested RM1,472.95 for 6 months, so he won't make a huge return. Nevertheless, John made a 27% profit which is far better than he would have made by putting the money into his savings account.

Scenario 2May and Chong both work full-time in professional jobs. Together, they earn RM120,000 per year. After mortgage repayments, living and personal expenses May and Chong have managed to put away RM5,000 that they want to now invest in the stock market. They buy 1,500 shares in AAA Steel at RM1.48 a share (RM2,220) and 1,500 shares in XY Manufacturing at RM1.33 a share (RM1,995). They also pay RM65.90 brokerage fees for the two transactions. Their total outlay is RM4,280.90.Over the next 12 months AAA Steel shares have risen to RM2.60 a share and XY Manufacturing shares have moved to only RM1.38 a share. May and Chong sell their shares for a total of RM5970. They pay their broker RM65.90 and are left with RM5904.10. Their initial investment was RM4,280.90. So, they make a profit of RM1,623.20.

Scenario 3Aminah is retired, owns her own home and earns a comfortable income from several long term investments. Aminah would like to invest RM15,000 that she has set aside for buying shares.Aminah selects a portfolio of 5 companies and aims to invest around RM3,000 in each. Aminah buys 3,333 shares in ABC Mining at RM0.90 a share (an investment of RM2,999.70). She also buys 2,027 shares in AAA Steel at RM1.48 a share (RM2,999.96) and 2,255 shares in XY Manufacturing at RM1.33 a share (RM2,999.15). To complete her portfolio, Aminah buys a further 2,912 shares in MM Multimedia at RM1.03 a share (RM2,999.36) and 3,000 shares in BB Furniture at RM1.00 a share (RM3,000). Aminah also pays RM164.75 brokerage fees for buying the shares. In total, Aminah has invested RM1,5162.92.12 months later Aminah sells her shares. Four of the shares have increased in value but BB Furniture has dropped to RM0.95 a share. ABC Mining rose to RM1.19 a share returning RM3,966.27. AAA Steel rose to RM2.60 a share returning RM5,270.20. XY Manufacturing rose to RM1.38 a share returning RM3,111.90. MM Multimedia rose to RM1.09 a share returning RM3,174.08. BB Furniture dropped to RM0.95 a share returning RM2,850. In total, Aminah's shares returned RM18,372.45 less RM164.75 for brokerage. This gives a total of RM18207.70, earning a profit of RM3,044.78.

Understanding The Stock MarketThe stock market is where the shares in companies are bought and sold, providing companies options to access capital, and investors opportunities to own a share of the company and enjoy potential gains from the company's future performance.The stock market offers people the ability to generate a separate income stream apart from their daily jobs, or income streams which are superior to those from traditional savings deposits. But before you even think about buying and selling shares, you must know the fundamentals of the stock market and of trading.First time investors can become confused because of the terminology that is used to describe various market functions. These don't take long to learn.Click herefor your basic share trading terms. Incidentally, one common confusion is over the terms 'stocks' and 'shares'. Actually, they both mean the same thing and can be used interchangeably.The Role of Bursa MalaysiaYou can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. The Malaysian stock exchange is called Bursa Malaysia. Bursa Malaysia has over 900 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market.Raising Capital on the Stock MarketThe Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they mean listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market. Purchasing stocks in a company that is listed on the stock market is done through an Initial Public Offering or IPO.Once an IPO has been issued, you can contact the company (phone, fax or email) for a copy of the Prospectus and complete the application to apply for an allocation of shares. Or you can wait until the company is floated and buy shares on the open market. Besides Bursa Malaysia, stock brokers will also have information regarding Initial Public Offerings.Companies that are already listed can also raise additional money on the stock market by offering existing stockholders the opportunity to buy more stocks in the company. For example, a listed company wanting to raise additional capital might issue one new share at 5sen each for every three shares an existing investor owns.When you buy shares, you are buying a share in that company and so you own a percentage of that company. When the company makes a profit, you share in that profit in the form of a dividend. Typically, the number of shares that have been issued multiplied by the share price gives us how much a company is worth.The Role Of A BrokerTo buy or sell shares on Bursa Malaysia, you need to use a registered broker who is a member of Bursa Malaysia. You cannot deal directly with Bursa Malaysia as only brokers have direct access to the market. A broker acts as your agent - much like a real estate agent that sells your house. He/she earns a commission on the value of shares you trade - just like a real estate agent earns commission on buying and selling houses for people. A broker can also be involved in the listing of a new company by underwriting the float and marketing the float to their group of clients.There are many brokers to choose fromALLIANCE INVESTMENT BANK BHD076-004Alor Setar Branch2nd Floor, Wisma PKNK,Jalan Sultan Badlishah,05000, Alor SetarKedah Darul AmanTel: 04 - 731 7088 / 731 8270Fax: 04 - 731 8428

RHB INVESTMENT BANK BHD087-021Alor Setar Branch214-A, 214-B, 215-A dan 215-BMedan PutraJalan Putra05150, Alor SetarKedah Darul AmanTel: 04 - 7209 888Fax: 04 - 7209 878

UOB KAY HIAN SECURITIES (M) SDN BHD078-007Alor Setar BranchLot 4, 5 & 5A1st Floor EMUM 55No. 55, Jalan GangsaKawasan Perusahaan Mergong 2Seberang Jalan Putra5150, Alor SetarKedah Darul AmanTel: 04 - 732 2111Fax: 04 - 732 2777Website:www.utrade.com.my

Reading Market ReportsAs a stock trader, you will begin to pay more interest to the business section of your local newspaper. Most feature a section that deals with Stock Market prices at close of the previous day. In this section, you will come across the following descriptions:Year's Highthe highest price for a particular stock for the year.

Year's Lowthe lowest price for a particular stock for the year.

Stock Codea unique numbering system to identify a particular stock.

Stock Counterthe stocks listed on Bursa Malaysia.

Cls'ng (Closing)the closing price for a particular stock for that particular trading day.

+/-the symbol for the increase or decrease in the stock price for that particular day.

+/-%the symbol for the percentage increase or decrease in the stock price.

Lots Tradedstocks are normally traded in board lots of 100 units; lots traded will tell you the number of lots traded on a particular day.

Day's Highthe highest price for a stock in that trading day.

Day's Lowthe lowest price for a stock in that particular day.

Div Yielda dividend yield is a method of valuing stocks; it is calculated asCash Dividend per Stock= Dividend Yield

Market Stock Price

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P/E Ratio(Price/Earnings Ratio)the information obtained from this will enable you to make a performance comparison of a company with that of the industry, and from one period to another. The formula is:Current Market Price= P/E Ratio

Earnings Per Stock

Earning per stockamount of a company's earnings attributable to each ordinary stock of that company.

M Cap(Market Capitalisation)this shows the total value of a listed company's stocks based on the current market price; calculated as:Stock's Market Price x Number of Stocks Issued

NTA per Stockthis indicates the value of assets backing the stock of a company; calculated by:Net assets of a company

Number of ordinary stocks in it

Reading the stock market performance section of the newspaper is an easy thing to do. You just need to do it a few times until you begin to feel comfortable with it.Understanding IndicesA stock market index is a single number calculated from the prices of many different stocks. Index is also called indices when you talk about more than one of them. Indices are used as benchmarks of stock performance for portfolios like mutual funds.Some investment funds (index funds) manage their portfolio so that their performance mirrors (tracking) the performance of a stock market index or a sector of the stock market.For example, when you hear that the Consumer Price Index (CPI) for say, January to December 2005 increased by 3.0% to 109.1 compared with that of 105.9 in the same period last year. This tells you that the change in retail prices paid by households for goods and services increased in that period. CPI is designed to provide a broad measure of changes in retail prices.An index is a tool which enables investors to measure the performance of a group of stocks from a defined market. It can form a benchmark for active or passively managed portfolios covering the particular market. Being part of an index is also a status symbol for the constituent companies and trading of constituent shares obviously supports the share price. Indices also allow the creation of investment products that give investors exposure to markets or groups of stocks which can help in markets where there are barriers to investment.Stock market indices may be classed in many ways. A broad-base index represents the performance of a whole stock market and reflects how investors feel about the economy. The most regularly quoted market indices are broad-base indices comprised of the stocks of large companies listed on a nation's largest stock exchanges, such as the American Dow Jones Industrial Average and S&P 500 Index, the British FTSE 100, the French CAC 40, the German DAX and the Japanese Nikkei 225.The Use of IndicesStock indices have developed in the last twenty years to become much more than economic indicators (market barometer) and with growing developments in financial markets, more technical functions of indices have been brought to the forefront.Stock indices are used by investors and fund managers as one of the many tools to evaluate the performance of a stock market The application of indices is now much wider including the use of indices as benchmarks for investor portfolio comparisons and as underlying components of financial products, for example Exchange Traded Funds (ETFs) and derivatives.Bursa Malaysia IndicesThe existing Bursa Malaysia indices are calculated using the market capitalisation weighted method.Market capitalisation means the total value of a listed companies shares based on the current market price. Therefore the bigger companies are given higher weightage compared to the smaller companies.Understanding FTSEThe FTSE Bursa Malaysia Index SeriesBursa Malaysia Bhd and FTSE Group joined forces in 2005 to launch the FTSE Bursa Malaysia Index Series, a suite of tradable and benchmark indices. The FTSE Bursa Malaysia Index Series is designed to represent the performance of companies, providing investors with a comprehensive and complementary set of indices, which measure the performance of the major capital and industry segments of the Malaysian and regional market.FTSE adopts international index construction standards which are transparent. Stocks will have to pass FTSE's basic requirements to be included into the index. The index design basics are as follows:-i. InvestableAll stocks are free float weighted to accurately represent the stocks available for investment. Strategic shareholdings such as by Directors and Founding Families, Government, Cross Holdings by related companies and Holdings subject to lock-in clauses will be excluded from free float screening.ii. TradableAll stocks are liquidity screened to ensure stock availability and ease of trading.iii. TransparentA clear and predictable set of Ground Rules provides transparency and enables easy understanding and anticipation of the management of the index series.Today, the family tree comprises of:1. FTSE Bursa Malaysia KLCI Index2. FTSE Bursa Malaysia EMAS Index3. FTSE Bursa Malaysia Mid 70 Index4. FTSE Bursa Malaysia Top 100 Index5. FTSE Bursa Malaysia Small Cap Index6. FTSE Bursa Malaysia Fledgling Index7. FTSE Bursa Malaysia EMAS Shariah Index8. FTSE Bursa Malaysia Hijrah Shariah Index9. FTSE Bursa Malaysia ACE Index10. FTSE Bursa Malaysia Palm Oil Plantation Index11. FTSE Bursa Malaysia Asian Palm Oil Plantation Index (USD)12. FTSE Bursa Malaysia Asian Palm Oil Plantation Index (MYR)

FTSE Bursa Malaysia KLCIBursa Malaysia's Strategic ObjectiveBursa Malaysia is committed towards extending the Malaysian capital market's global reach by offering competitive services and infrastructure through adoption of internationally accepted standards which are globally relevant.As part of Bursa Malaysia's strategic initiative, the Kuala Lumpur Composite Index (KLCI) was enhanced to ensure that it remains robust in measuring the national economy with growing linkage to the global economy. Bursa Malaysia together with FTSE, its index partner, have integrated the KLCI with internationally accepted index calculation methodology to provide a more investable, tradable and transparently managed index.The enhanced KLCI, whilst remaining representative of the Malaysian stock market, provides a platform for a wider range of investable and appealing opportunities.The KLCI is now known as the FTSE Bursa Malaysia KLCI and the enhancements were implemented on Monday, 6 July 2009.Selection of FTSE Bursa Malaysia KLCI ConstituentsThe FTSE Bursa Malaysia KLCI comprises the largest 30 companies listed on the Main Board by full market capitalisation that meet the eligibility requirements of the FTSE Bursa Malaysia Ground Rules.The two main eligibility requirements stated in the FTSE Bursa Malaysia Ground Rules are the free float and liquidity requirements as indicated below :- Free FloatEach company is required to have a minimum free float of 15%. The free float excludes restricted shareholding like cross holdings, significant long term holdings by founders, their families and/or directors, restricted employee share schemes, government holdings and portfolio investments subject to a lock in clause, for the duration of that clause. A free float factor is applied to the market capitalisation of each company in accordance with the banding specified in the FTSE Bursa Malaysia Ground Rules. The factor is used to determine the attribution of the company's market activities in the index. LiquidityA liquidity screen is applied to ensure the company's stocks are liquid enough to be traded. The method is based on the calculation of the stock's median daily trading per month.

Calculation and Review of the FTSE Bursa Malaysia KLCIFTSE uses the real time and closing prices sourced from Bursa Malaysia to calculate the FTSE Bursa Malaysia KLCI. Calculation is based on a value weighted formula and adjusted by a free float factor. The FTSE Bursa Malaysia KLCI values are calculated and disseminated on a real time basis every 15 seconds.The FTSE Bursa Malaysia KLCI is reviewed by the FTSE Bursa Malaysia Index Advisory Committee on a semi-annual basis in June and December. Full market capitalisation data as at the last trading day of May and November is used for the review. Any constituent changes will be implemented after close of business on the 3rd Friday in June and December.Please refer to theFTSE Bursa Malaysia Ground Rulesfor further information about the eligibility, calculation and review criteria.Variation to the Kuala Lumpur Composite Index Futures (FKLI) and Kuala Lumpur Composite Index Options (OKLI) Contract SpecificationArising from the transition of KLCI to FTSE Bursa Malaysia KLCI on the Implementation Date, kindly take notice that the contract specifications for FKLI and OKLI contracts (which are currently stipulated in Schedule 6 and 7 respectively of the Rules of Bursa Malaysia Derivatives Berhad ("Rules of Bursa Derivatives")) that are created in the trading months as stated in the table below will be varied with effect from 1 February 2009 in the manner set out in paragraphs (i) and (ii) belowTrading MonthContract TypeContract MonthUnderlying Index

aFeb 2009 - Apr 20092nd QuarterSept 2009The trading of the contracts will be based on KLCI from 1 Feb 2009 until 3 Jul 2009, and subsequently based on FTSE Bursa Malaysia KLCI till expiry.

bMay 20091st Quarter2nd QuarterSept 2009Dec 2009The trading of the contracts will be based on KLCI until 3 Jul 2009, and subsequently based on FTSE Bursa Malaysia KLCI till expiry.

cJun 2009Next Month1st Quarter2nd QuarterJul 2009Sept 2009Dec 2009The trading of the contracts will be based on KLCI until 3 Jul 2009, and subsequently based on FTSE Bursa Malaysia KLCI till expiry.

dJul 2009Spot MonthNext Month1st Quarter2nd QuarterJul 2009Aug 2009Sep 2009Dec 2009The trading of the contracts will be based on KLCI until 3 Jul 2009, and subsequently based on FTSE Bursa Malaysia KLCI till expiry.

i. the 'UNDERLYING STOCK INDEX' as stipulated in Schedule 6 for FKLI and as stipulated in Schedule 7 for OKLI is changed to read as follows.'Kuala Lumpur Composite Index (from 1 February 2009 until 3 July 2009) FTSE Bursa Malaysia KLCI (from 6 July 2009 onwards)'ii. to add 'ATTRIBUTION CLAUSE' as follows.'The FTSE Bursa Malaysia KLCI Index is calculated by FTSE International Limited ("FTSE").All intellectual property rights in the FTSE BURSA MALAYSIA KLCI vests in FTSE and Bursa Malaysia Berhad ("BURSA MALAYSIA"). "FTSE", "FT-SE" and "Footsie" are trade marks of the London Stock Exchange Plc (the "LSE") and The Financial Times Limited ("FT") and are used by FTSE under licence. "BURSA MALAYSIA", "Kuala Lumpur Composite Index" and "KLCI" are trade marks of BURSA MALAYSIA.FTSE nor BURSA MALAYSIA nor LSE nor FT makes any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Bursa Malaysia KLCI and/or the figure at which the FTSE Bursa Malaysia KLCI stands at any particular time on any particular day or otherwise.'This Attribution Clause is added for the use of FTSE Bursa Malaysia KLCI as the underlying index for FKLI and OKLI by FTSE and its partners.Strengths of the FTSE Bursa Malaysia KLCI1. The KLCI is known as FTSE Bursa Malaysia KLCI to provide global relevance, recognition and reach.2. A market barometer made up of primary market movers will more aptly define market activities while remaining representative of the Malaysian stock market.3. The FTSE Bursa Malaysia index calculation methodology emphasises free float and liquidity screens for a clearer representation of the market.4. A smaller basket of 30 stocks makes it easier to manage and more appealing for the creation of Index Linked products to promote market liquidity.5. Increasing the frequency of index calculation from every 60 seconds to every 15 seconds tracks the market pulse closely and more efficiently.6. The continuity of the KLCI index value preserves the historical movements of the Malaysian stock market.

KLCI MilestonesThe barometer of the Malaysian stock market was the Industrial Index which was launched on 2 January 1970. Its constituents comprised of 30 industrial stocks and the base year was 1970. By 1985, the Industrial Index was considered to be no longer reflective of the stock market. The Exchange and industry representatives agreed that the stock market needed an index that was reflective of the market performance, sensitive to investors' expectations, indicative of Government policy changes and responsive to structural changes in the economy. This index is what we now know as the KLSE Composite Index or KLCI.4 Apr 1986The KLCI was launched as an open ended index with a total of 83 companies and calculated three times a day. Trading volume criteria was 250 lots per annum.

30 Jan 1990Calculation frequency was increased to every 15 minutes.

29 May 1992Trading volume criteria was increased to 1,000 lots per annum.

18 Apr 1995Number of constituents was increased to and fixed at 100 to accommodate the listing of stock index futures. Computation frequency was increased to every 60 seconds

19 Mar 1998Enhancement to the objectives to better track the economy

25 May 2005Discontinued the practice of adjusting index base for dividends

6 Jul 2009Now known as FTSE Bursa Malaysia KLCI and adopts the FTSE Bursa Malaysia Index calculation methodology

9 Jun 2011Enchancement to the liquidity screening rule to further align the index to global standards.

OverviewBursa Malaysia and FTSE Group joined forces on 26 June 2006 to launch the market data.The market data is designed to represent the performance of companies, providing investors with a comprehensive and complementary set of indices, which measure the performance of the major capital and industry segments of the Malaysian and regional market.All Malaysian companies listed on the Bursa Malaysia Main Market and ACE Market are eligible for inclusion, subject to meeting FTSE's international standards of free float, liquidity and investability. The FTSE Bursa Malaysia index methodology allows investors to do cross border analysis and comparison while a set of Ground Rules provides transparency to the management of the index series.The index series covers all stock sizes within the market and provides the investors with a better tool to benchmark their investments. The indices are also suitable for the creation of investment products such as ETFs, derivatives, structured products and index tracking funds.

Getting A Stock PriceThe stock price is the market price of a stock. Using the Bursa Malaysia website you can view the price for any listed stock.Getting a PriceIt's good practice to explore the market news wherever you can find it. Many of the terms will be alien to you at this stage but familiarising yourself is all part of the learning process.There are many places you can find market news, for example: The financial section of the daily newspapers Bursa Malaysia Website. Your broker website may have an up-to-date list of stock prices Your telephone company may be able to send you market updates via your mobile phoneIt is best to explore your options and find services that best suit you.Types Of StocksWhat types of stocks are there?Ordinary StocksWhen purchasing an ordinary stock, you own a share of the company. This entitles you to receive profits from the operations of the company in the form of dividends. At the annual general meeting (also referred to as an AGM), you have voting rights. Ordinary stocks are what you will start to trade in and most traders never venture beyond this.

There are, however, other types of securities and these are:Preferential StocksA preference stock is different from an ordinary stock. Preference stockholders receive dividends before dividends on ordinary stocks are announced. If the company is wound up, preference stockholders rank above ordinary stockholders in the distribution of assets. Preference stocks can often have a fixed dividend rate.Bonus IssueThis is a free issue of stocks to the stockholders based on the number of stocks already owned.Rights IssueA rights issue can be granted to stockholders to buy stocks in the company, often below market price.DerivativesThere are also securities you can trade on the market that derive their price from the parent stocks. There are two types - Options and Warrants - and these are collectively known as Derivatives.There are two parties involved in an options contract, the writer or seller and the taker or buyer. The writer writes the option and has the obligation of accepting or delivering the stocks. The takers have the right, but not the obligation, to buy or sell the stocks.There are many advantages of options trading, the least of which is leverage. An option can be bought and sold for a fraction of the stock price, giving an effective higher return (or loss) on investment for a stock price move.WarrantsWarrants, like options, derive their price from the parent security. Warrants though are issued by banks and other financial institutions and are classified based on whether they have an investment or trading purpose.Warrants may be issued over securities, a portfolio of securities, a stock price index, currency or commodities.Buying and Selling StocksThe thought of buying and selling stocks can seem daunting for a beginner but it is quite simple and will grow on you quite quickly once you have some practice. One essential thing to know is that you must go through a broker to buy and sell stocks, only a licensed broker can deal directly with the stock market.Engaging a BrokerAside from making the purchases, a broker can also advise you on your purchases. However, you should not depend on them for market knowledge, you must do your own research to succeed in the market.Buying and Selling OnlineOnline brokers generally take less commission than other brokers, making online trading a more profitable alternative. Online trading does not come with expert advice but does normally come with live market updates so you can keep track of your purchases online and become an expert yourself.

Application for an Initial Public OfferingThere are two methods which you can apply for an IPO: Throughapplication formsat issuing houses, stockbroking companies and financial institutions. And sometimes through an Electronic Share Application (ESA) that allows applicationsvia ATMs.Refer to the chart below for a further understanding on how to apply for shares.

Before investing, ensure that: You know your risk profile. You have sufficient additional funds. The necessity of the additional funds has been considered.When To Buy And SellOne of the benefits of investing in the stock market is that you can do it after trading hours. Bursa Malaysia is open from 9am to 12.30pm, then again from 2.30pm to 5pm but you can do research and place orders outside these hours.So, let's say you go to work all day and only have the evenings and weekends free. In the evenings you will review what happened to the market that day and decide how to trade the next day. If you miss a few nights during the week, you can do your analysis on the weekend.There are two ways to place a buy or sell order:At Market OrdersYou can only make 'at market' orders during trading hours. If you do your research after trading hours then you would put an order through with your broker as soon as the market opens the next day. The purchase will then be made 'At Market' price, which may be different from the price you found during your research the night before.At Limit OrdersThe advantage of 'At Limit' orders is that you set the maximum price you will buy or the minimum price you will sell the share for. So, if you have done your research that evening and decided that the most you want to pay for the share is RM 1.20 then you place an 'At Limit' order for 100 shares at RM1.20. If your broker can get the shares for RM1.20 they will buy them for you. If not, they won't make the trade.This practice is quite good if you want to control the amount you are investing. The other advantage of buying 'At Limit' is that you can place a buy/sell order outside market hours. Therefore, your share trading business needs do not interfere with your daytime job.

2) The Golden Rules

Start With A Financial PlanTrading stocks should be treated as a business venture - it will require time, knowledge and money to succeed. Your Financial Plan represents your roadmap to success.Decide Your Financial Objectives.If you are a 60 year old looking for cash flow to fund your impending retirement, your priority would be to generate an income stream rather than large asset value growth.If you are a 25 year old who wants to begin to invest, capital growth would be the priority, rather than income stream.Your financial objectives will determine whether you trade liquid shares or not.Decide Your Risk Level.Decide on your risk level and the types of investments you can afford to make will be set. Remember, the higher the return you want to achieve, the higher the risk.Low Risk LevelI am not very comfortable with risk and will invest in fixed interest/capital guaranteed securities (government bonds, bank term deposits).Medium Risk LevelI can take on a moderate amount of risk (blue chip Industrial and Banking and Finance sector shares).High Risk LevelI am comfortable with risk. I am seeking a high return and prepared to evaluate companies early in their growth phase (recently listed resource companies).

How Do You Fund Your Investments?For most of us, we do not have immediate access to a large pool of ready savings. Using the equity you have in a property to fund your share portfolio is a common approach.EPF savings is also an effective vehicle for providing funds for investing and the majority of Malaysians have access to these funds.Most major banks and insurance groups offer margin loan facilities. This is where you start a portfolio with savings and then use this portfolio as security to borrow further funds to buy more shares.In most instances, the problem is not acquiring funds to start a portfolio, it is having the knowledge to invest with confidence.Employ Risk Management StrategiesWith any investment, be it stock trading, real estate or business, it is important that you understand what the risks are and how to minimise your exposure to these risks. This process is known as 'Risk Management'.The Three Elements Of Risk ManagementSpread Your Risk: Don't Put All Your Eggs In One BasketSpreading you risk is as simple as not putting all your eggs in the one basket. This is called diversifying your portfolio.Spread your capital so there is never more than 20% in a single stock.Don't however take this to extremes and over-diversify by investing in too many stocks at once. You cannot expect to outperform the market if your portfolio closely matches the market. A rule of thumb is to limit your portfolio to between 5 and 10stocks.Plan Your Exit: What Is An Acceptable Risk?Amateur traders buy a stock and their focus is to hope it increases in price. If it goes down, they continue to hold in the hope the price will recover. When a professional buys a stock they recognise that success is a probability, not a certainty. At the time of entering the trade they establish an Early Exit price. If the stock falls past this point the good investor will immediately exit and never run the risk of making a large loss.Maintaining your capital is fundamental to successful trading. If you invest in a stock and make a large loss, then it is impossible to consistently profit from the stock market. Having incurred a large loss, you must now make a large profit just to break even. The key to successful trading is keeping your losses small.Stop The Loss: Don't Drive Without A SeatbeltThe second must sell signal is a Stop Loss. Just tracks the highest price reached by the share since purchase. If the share falls by more than 10% from this price, it is time to sell. We suggest 10% - you can change this depending on your trading style. Too small a percentage and it will get you out too early. Make the percentage too large and you give back too much of your profits before exiting. Start with a 10% fall and see what you feel comfortable with.Always Trade With The TrendTrends are the cornerstone of trading. If a share price is rising, we can make money by buying that share. If the share price is falling, we need to look for other opportunities. It does not make sense to buy a falling share. Our aim is always simple find a share in an uptrend and take a large chunk from the middle of the trend.Overall Market StrengthIt is important to look at how the overall market is doing. This can be gauged by looking at the top 500 shares, otherwise known as All Ordinaries. If All Ordinaries go up, it is because stocks in the top 500 have risen and the market is in an uptrend.There are over 900 companies listed on the Bursa Malaysia that you can invest in. To examine each one individually would take a great deal of time. Instead, you trade with the trend and find the strong sectors in the market.Strength of an Industry SectorWhat is a Sector?A sector is a group of companies involved in the same industry. For example, mining companies are grouped together in the Materials sector while banking companies are in the Finance sector. Entire sectors are generally affected by economic conditions so entire sectors tend to trend in the same directions. Trends do not have hard and fast rules, individual stocks within these sectors will perform at different levels.Strength of Shares in a SectorAlthough the general rule of novice investors is to buy on an uptrend, there are people who buy during a downtrend as a strategy. This is a process of buying more shares as the price falls, so the average cost of the share is reduced with every purchase. This kind of bargain hunting is a riskier strategy, as the stock price may never recover. The second downside is that the price may fall and then stabilize, meaning the investor may have to wait for a while before recovering losses or making a profit. In this scenario, capital that could be used for profitable trading would be lying idle.Resistance to this type of trading is not new. One of the greatest traders of the last century, Jesse Livermore wrote, "Experience has proven to me that the real money made in speculating has been commitments in a stock showing a profit right from the start."By now you should understand that trading with the trend is critical to success. Also, our objective is never to buy at the bottom or sell at the top of a trend. We simply want to take a large chunk out of the middle. Let the trend be your friend.Dont Buy And HoldThe Malaysian stock market is one of the strongest and sometimes most dynamic markets in the world.While the market has always recovered from falls, the same cannot be said for individual companies. Even during a booming market, some companies can suffer significant losses.Trade only on an uptrend and sell the poor performers, this will make it impossible to experience a large loss. This is the secret to outperforming the market and achieving a consistently superior return.Undertake some research on the Bursa Malaysia or in a local investment paper. List three shares that have showed decreased performance recently and three shares that have showed increased performance recently.Trade Only Liquid StocksLook at the column called Lots Done in your market report. This is the amount of stocks that were traded on the day. If you multiply this by the price of the stock, you can see how much money actually changed hands on that day. If this amount is high, then the stock is very liquid, meaning it is easy to buy and more importantly, easy to sell. The last thing you want once you've bought a stock is to be stuck with it because you can't find a buyer.For example, if a company has traded 100,000 stocks today and the closing price was RM2.42, we can estimate that RM242,000 worth of that stock changed hands today.For example:Innovics' last price was RM 0.30 and Lots Done were 1000. This means that an average of RM 3,000 worth of stock changed hands today. In other words, Innovics is only trading an average of RM3,000 of shares each day.Now, you own RM10,000 worth of Innovonics and you want to sell. If you enter your sell order on the market, you will inject 3 days worth of turnover onto the market. There will not be enough buyers for you to immediately sell the stock at your chosen exit price.To ensure you invest in liquid shares, only trade stocks that show a daily turnover of at least ten times what you are planning to invest. If you are investing RM10,000 in a stock, look for an average daily turnover minimum of RM 100,000.Develop Your Own Trading PlanTrading is about probabilities, not certainties. A Trading Plan establishes a series of steps that ensure a higher probability of success.The Plan will set certain guidelines for: What stocks to buy When to buy When to sellThe Structure of Your Trading PlanA Strong Market:Before deciding what to buy, first establish if the market is in a positive phase. If the KL Composite Market has been negative over recent weeks (or longer), it is not a good time to enter the market. If the majority of stocks are going down or sideways, the probability of you buying a share that is going to rise in the immediate future is slim.A Strong Sector:Having waited until the market is in a growth phase, determine if there are any sectors showing strong growth in the past few weeks. These are the sectors that have stocks performing well and are increasing in price.Examine stocks in these strong sectors and determine those that are on an uptrend, meaning the price of the stock has been steadily going up for at least 3 months.These stocks will qualify as having potential for ongoing growth as they are generating positive market sentiment. If they have adequate liquidity on top of that, you could add any of these to your portfolio knowing that you could exit quickly at any point in time.Exit Strategy:Having selected shares to include in your portfolio you must then have an Exit Strategy in the event that these shares show signs of reversing. Simply set an Early Exit price to ensure that the stocks you buy never generate losses.This is a simple description of a Trading Plan. It holds the basics for selecting stocks that have a good probability of increasing in price and risk management to protect your capital. These three ingredients are the key to success in stock trading.

Account Opening What is a Central Depository System?The CDS acts as a means of representing ownership and movement of securities. CDS account holders enjoy the conveniences if obtaining electronic securities transfer and trade settlement.

Who may open a CDS account?The CDS account may be opened by:a. An individual who has reached the age of eighteen (18) years as of the application date.b. A corporation within the context of Section 4 of the Companies Act 1965.c. Any corporate body that is incorporated within Malaysia and is by notice, published in the Gazette, declared as a public authority or an instrument or agency of the Government of Malaysia or of any Malaysian State.d. A society under any written law relating to co-operative societies.e. A trustee or trust corporation duly constituted under any written law.f. Any society registered under the Societies Act 1966.g. Statutory bodies incorporated under an Act of Parliament.In general, a CDS account can only be opened if the persons are opening it either as a beneficial owner or as an Authorised Nominee.

Why do I need to open a CDS account?You need to open a CDs account to buy and/or sell shares, and to carry out other CDS transactions on all equity and non equity counters (i.e. bonds, loan sticks, warrants, etc.) which have been prescribed into the CDS.

How do I open a CDS account?You can open a CDS account with any Authorised Depository Agents (ADAs). All stockbroking companies in Malaysia are currently ADAs.If you are anindividual investor, you may go to an ADA of your choice and:a. Complete the Opening of Account form and two (2) Specimen Signature Cards.b. For Malaysians, submit the documents together with two (2) certified true copies of your Malaysian National Registration Identity Card (NRIC). As for foreigners, you need to pay the Account Opening fee and submit two (2) certified true copies of your passport.If you are acorporate investor, you are required to:a. Complete the Opening of Account form and two (2) Specimen Signature Cards.b. Submit the above documents with two (2) copies of all necessary supporting documents (e.g. Certificate of Incorporation, Board Resolution, etc) together with the Account Opening fee.Your ADA will then open the CDS account and give you your CDS account number. Bursa Malaysia Depository Sdn Bhd will send you an account opening confirmation notice by ordinary mail.

When do I need to formalize an account? If you had applied for Initial Public Offering without a CDS account prior to December 2003 and was successful in your application, Bursa Malaysia Depository Sdn Bhd would have opened a CDS account on your behalf with the broker of your choice. Bursa Malaysia Depository would have informed you of the account and the need for you to formalise the opening of the account by submitting the relevant documents and by paying the Account Opening fee. The account cannot be utilised until all these formalities are complied with.

How do I open a CDS account if I cannot be present in person?Pursuant to Rule 25.01 (1A) of the Rules of Bursa Malaysia Depository, it is mandatory for an individual to be present in person before the ADA if he intends to open or formalise a securities account. In the event that he is unable to do so, the ADA may be pursuant to Rule 5.02A (2) expressly waive the requirement to be present in person. The ADA may instead permit the investor to submit the relevant account opening form (available at all ADAs) and present his documents for verification in front of any of the following people who are also required to witness or certify the supporting documents:a. Dealer's representativeb. Authorised Officer of an ADAc. Authorised Officer of an Exempt Dealerd. Authorised Officer of a Malaysian Embassy/High Commission Consulatee. Notary Public (in the absence of a Notary Public in applicant's country, the authorized officers of a licensed stockbroking company or the lawyers* of that country may be allowed to verify)f. Others as approved by Bursa Malaysia Depository

Can I open more than one CDS account?An individual investor is allowed to open only one (1) CDS account with each ADA. However, a corporate investor may open multiple accounts with the same ADA.

Can a permanent resident of Malaysia apply for a CDS account?Yes, they may. You may refer to Q2 for more information.

Updating Account Particulars How do I change my particulars? You may change your personal particulars (name, investor type, registered address, etc) and also your account particulars (correspondence address, account qualifier and telephone number). All you need to do is complete the Application for Updating of Account Particulars form, and hand it over to your ADA who will then do the rest.

What should I do if I wish to update my signature?Whether you are an individual investor or a corporate body, you are required to submit an official letter expressing your intention of updating the signature to your respective ADA.Individual investorswho wish to do so must be present before the ADA, bringing along the letter officially expressing the intention of updating the signature.The letter should contain the following:a. The CDS account numberb. The "old" and the "new" signaturec. The "new" signature's effective date of useFor acorporate investor, a letter duly signed by the person appointed to operate the account pursuant to Board Resolution of the company or a new Board Resolution on the update, is to be submitted.

Why is the notice on a successful update or particulars in a CDS account sent to both the correspondence and the registered addresses?Bursa Malaysia Depository sends such Notice to both the registered and correspondence addresses when both the addresses differ. This is one of the security measures built in the CDS to protect any unauthorised updates and also to protect the interest of the account holder.Closing of Account How do I close my CDS account?An account may only be closed if there are no outstanding transactions/balances remaining in that account. You can complete and submit the Application for Closing of Account form or write a letter to your ADA, stating your request to close the CDS account.CDS Account Statements When do I receive the CDS statement of account?You will receive a monthly statement of account in respect of the preceding month which has an entry in the CDS account. However, when there are no entries but there are shares in your CDS account, Bursa Depository shall issue the statement in the month of June and December.

What is a statement cycle? A statement cycle is a period which is pre-determined by the system with the purpose of generating the statement of account. Depositors' statement of account cycles are assigned to either the 7th, 14th or 21st of each month. ADAs' principle and nominee accounts are assigned to the 28th of each month.

Why are the shares I recently bought not reflected in my latest statement of account?If the settlement date falls after the date of your statement cycle, the transaction will be reflected in your next statement of account.

How do I request for a backdated copy of my statement of account? You may request for a copy from your ADA if the date of the statement is less than one (1) year from the date of retrieval. The ADA may charge you for this service. If the date of the statement goes back to more than one (1) year from the date of retrieval, you must request it from Bursa Depository by way if letter. Charges are applicable

What are the possible reasons for failure to receive the statement of account?It may be due to the following circumstances:a. When investors' correspondence address is not updated with his ADAb. When the CDS account is not yet formalizedc. When there has been no debit or credit entry into the CDS account, during that particular month

Transfers How limited is my request to initiate a transfer?Effective 1st September 1998, any transfer requests must be within the approved reasons of transfer prescribed by Bursa Malaysia Depository.

Can I initiate a transfer of a counter which is suspended from trading?Yes, you can, provided it falls within the approved reasons.

What are the changes done to the transfer process by Bursa Malaysia Depository on 30th December 2002?The changes are as follows:a. Introduction of new Transfer of Securities Request form which incorporates more user-friendly features and also a declaration clause.b. The cut-off time for depositors to lodge their transfer related documents with their respective ADA/ADM has been extended form 12.00pm to 3.00pm.c. The previous ten (10) approved reasons have been reclassified to two (2) broad categories.i. No Change in Beneficial OwnershipThis category of approved reason for transfer caters for transfers that result in no change in the beneficial ownership of securities. Under this category of approved reasons for transfer, the name of the beneficial owner is transparent and identical at both the securities accounts of the transferor and transferee, thus no supporting document is required.ii. Change in Beneficial OwnershipThis category of approved reason for transfer covers scenarios such as transfers pursuant to General Offer, transfers between family members, transfers arising from pledging of securities, transfers involving Government Authorities and transfers that require prior approval from Bursa Malaysia Depository. Except for transfers involving Government Authorities, the rest of the approved reasons in this category would require supporting documents.

Can I still use the old transfer form to initiate transfer of securities request?No. It is mandatory for all transfer of securities request executed by the transferor after 30th December 2002, to include the declaration clause that is pre-printed on the new transfer request form.

In relation to transfers between family members' CDS accounts, what are the scenarios or relationships allowed by Bursa Malaysia Depository?Bursa Malaysia Depository only allows transfers between the transferor (the person who initiates the transfer) and transferee (the person who receives the transferred securities), who are immediate family members. Here are the following relationships allowed:a. Parentsb. Children/Adopted childrenc. Spoused. Brotherse. Sistersf. Grandparentsg. GrandchildrenIndividual depositors are also able to transfer securities from their CDS accounts held directly in the name of the individual depositor or nominee accounts held by an Authorised Nominee (where the individual depositors are indicated as beneficial owners) to CDS accounts held directly in the name of their family members. They will be required to enclose the relevant supporting documents when initiating such transfers.However, transferring of securities from the depositors' Pledged Securities Accounts directly to their family members' CDS accounts are not permitted.However, transferring of securities from the depositors' Pledged Securities Accounts directly to their family members' CDS accounts are not permitted.

When will the transfer of securities be reflected in the CDS account?Once the transferor submits the completed Transfer of Securities Request form to his ADA, the ADA concerned will verify all the documentation to ensure that they are in order and then enter the relevant information into the CDS. Upon successful execution of the transfer request in the CDS, the transferor's CDS account will be debited and the transferee's CDS account will be credited immediately.Account Balance Inquiry Can I still obtain my account balance if I do not wish to pay for an ad-hoc statement?Yes, you can by completing a Balance Inquiry Request form available at your ADA. You will be given your latest CDS account balance without the transaction details.

Can my dealer's representative have access to my account balance?IN accordance with the Rules of Bursa Malaysia Depository, you can authorise your dealer's representative to inquire your CDS account balance for a specific period or indefinitely, unless revoked earlier by you.

Can I inquire my stock balance from my stockbroking company via telephone?In the interest of protecting the confidentiality and security of your CDS account, you are not encouraged to verify your stock balance with the ADA via telephone. Instead you are required to complete and submit a Balance Inquiry Request form to your ADA, where your signature or those of your authorised signatories will be verified.Corporate Action Can I use an authorised nominee account to apply for an IPO?No. These authorised nominee accounts are opened by the ADA's nominee company and is effectively owned and operated by the ADA on behalf of its client. If you are an individual IPO applicant, you must use your own individual CDS account. Margin accounts are also not allowed to be used when applying for an IPO.

How is my entitlement from a corporate action determined? Whenever a corporate action is announced by the relevant issuer, Bursa Malaysia Depository will provide the Record of Depositors (ROD) as of the lodgment date of the corporate action to the Issuer or the Share Registrar of the Company. The ROD contains information on the CDS account holders and the number of shares to their credit as at the lodgment date. Based on this information, the issuer will determine the entitlement of each of its shareholder and instruct Bursa Malaysia Depository to credit the relevant CDS accounts with the appropriate number of shares.

When will my CDS account be credited with securities arising from corporate actions, i.e. Rights Issue, Bonus Issue, etc?These securities will be credited into your CDS account on the eve of the listing of the underlying securities on the Stock Exchange or on any other date as instructed by the relevant authorities.

Can I request for the underlying securities due to myself, arising from a corporate action exercise to be issued in the form of certificates?No. Under Section 38 of Securities Industry (Central Depositories) Act 1991 (Amendment 1998), securities due to you as a result of any corporate exercise will be credited into your CDS account. There will be no issuance of physical certificates.

Dormant Account What is a dormant account?An account is designated as dormant when there is nil balance in the account and there has not been any debit or credit entry in the depositor's account in the 36 months after the date of nil balance.

Why does Bursa Malaysia Depository designate an account as dormant?Bursa Malaysia Depository is continuously striving to enhance the security of your CDS account. Designating relevant accounts as dormant will restrict unauthorised transactions.

What is the effect of my account being dormant?Once your account is designated as dormant, you will not be able to use that account to perform any kind of CDS transactions under the Rules of Bursa Malaysia Depository. However, you may use your dormant account in your application for Initial Public Offering (IPOs) and corporate actions. You will not receive any Statement of Account until your account is reactivated.

Can my dormant account still be used to apply for IPOs or corporate actions?Yes, you may use your dormant account to apply for IPOs. The same also applies for corporate actions. However, the status of your account will remain as dormant until you reactivate it.

Will I be notified before my CDS account is designated as dormant?Yes, one month prior to the designation of an account to dormant status, Bursa Malaysia Depository will issue a notice to inform you.

When I receive the notice, what steps may I take to prevent my account from being dormant?To ensure that your account remains active and is not designated as dormant, you may perform any CDS transaction which involves any debit or credit book entries in your account, prior to the effective date of dormancy. Will I be notified again once my CDS account has been designated as dormant?No, Bursa Malaysia Depository will only be sending a one-time notice to you one (1) month prior to the effective date of dormancy.

If my CDS account is dormant, can I still request to update my particulars?Yes, you may update your particulars in your CDS account by completing the Application for updating of Account Particulars form and by submitting it to the ADA where your account is maintained.

How do I reactivate my dormant account?To reactivate your account, you are required to submit a written request or the completed Application for Reactivation of CDS Account form with supporting documents (if any) to the ADA where your dormant account is maintained.

Must I be present before the ADA to reactivate my dormant account?No, you don't have to be present.Inactive Accounts What is an inactive account?An account is said to be inactive when there are deposited securities in the account but with no debit or credit entries in the depositor's account for at least 36 consecutive months from the date of the last entry made.

Why does Bursa Malaysia Depository designate an account as 'inactive'?Bursa Malaysia Depository is continuously striving to enhance the security of your CDS account. Designating relevant accounts as inactive will restrict unauthorised transactions.

What is the effect of my account being inactive?Once your account has been designated as inactive, you may continue to perform all forms of CDS transactions which are available to the depositors except for outward transfers and trade activities.

What will happen to the securities held in my CDS account after it is designated as 'inactive'?Your securities will still remain in your CDS account after your account is designated as inactive.

Can I still use my inactive account to apply for IPOs or corporate actions?Yes, you may use your inactive account to apply for IPOs. The same also applies for corporate actions. However, the status of your account will remain unchanged.

Will I receive any statement of account after my CDS account is deemed inactive?Yes, Bursa Malaysia Depository will continue to send the Statement of Account on a half-yearly basis after your account is designated as inactive.

Will I receive entitlements such as Dividends or Bonus Issues after my CDS account has been designated as 'inactive'?Yes, if you are eligible to receive any entitlement, the entitled securities will be credited into your inactive account.

Will I be notified before my CDS account is designated as 'inactive'?Yes, one month prior to the designation of an account to an inactive status, Bursa Malaysia Depository will issue a notice to inform you of the same.

When I receive the notice, what steps may I take to prevent my account from being deemed inactive?The designation of an account to an inactive status is to provide added security and protection to long-term investors. However, if you wish for your account to remain active, it will, if there are debit or credit entries in your account, prior to the date of inactivation stated in the notice sent to you.

Will I be notified again once my CDS account has been designated as ' inactive'?No, Bursa Malaysia Depository will only be sending a one-time notice to you one month prior to the date of inactivation. Nevertheless, the half-yearly Statement of Account sent by Bursa Malaysia Depository will indicate the status of your account as 'inactive'.

If my CDS account is deemed inactive, can I still request to update my particulars?Yes, you may update your particulars in your CDS account by completing the Application for Updating of Account Particulars form and submitting it to your ADA where your inactive account is maintained.

How do I reactivate my account?To reactivate your account, you are required to submit a written request or the completed Application for Reactivation of CDS Account form to the ADA where your inactive account is maintained.

Must I be present before the ADA to reactivate my account?No, you don not need be present.

How long does it take to reactivate my inactive account?Your inactive account will be reactivated within two (2) market days from the date of application.

Will there be a fee for reactivation?No, there will be no fee imposed.

Will I be notified after my CDS account has been reactivated?Yes, after your CDS account has been successfully reactivated, Bursa Malaysia Depository will send you a notice to inform you.Withdrawal Are there any exceptions to the prohibitions of withdrawals, since its inception on 1st September 1998?A depositor shall not withdraw deposited securities from the Central Depository safe except in the following circumstances:a. To facilitate share buy backb. To facilitate conversion of debt securitiesc. To facilitate company restructuring processesd. To facilitate rectification of errorse. When a corporate body is removed from the official list of a stock exchangef. In any other circumstances determined by the Central Depository from time to time, after consultation with the Securities Commission

Electronic Share Application (ESA) What is Electronic Share Application (ESA)? Electronic Share Application (ESA) is a facility that allows for application of Initial Public Offering (IPO) through an Automated Teller Machine (ATM) of the participating financial institutions. This facility is provided by both the MIDF Corporate & Consultancy Services Sdn Bhd (MIDFCCS) and the Issuing Houses (IH), i.e. Malaysian Issuing House Sdn Bhd. In a nutshell, ESA is a mode of applying for IPOs in a paperless manner.

Which financial institutions provide the ESA facility?It is provided by financial institutions which have formulated the handling of IPO processes with the Issuing House. IN the context of ESA, these financial institutions are commonly known as Participating Financial Institutions (PFI), which are:a. Affin Bank Berhadb. Ambank (M) Berhadc. CIMB Bank Berhadd. HSBC Bank Malaysia Berhade. Malayan Banking Berhadf. Public Bank Berhadg. RHB Bank Berhadh. Standard Charted Bank Malaysia Berhad (selected branches)

What are the pre-requisites for an IPO applicant using ESA?All you need is:a. A banking account and a valid ATM card with the PFIb. A CDS account directly under the name of the applicant, which is opened with any of Bursa Malaysia Depository's Authorised Depository Agent (i.e. stockbroking companies)

What are the conditions governing the ESA operations?The respective PFI will set out the procedures and instructions on the usage of the ESA facility. Similarly, the ESA Terms and Conditions can be found in the prospectus issued by the IPO Offeror.

How do I use the ESA facility?Each PFI may have different procedures in using the ESA facility through its ATM. Therefore, you are advised to check with the relevant PFI for detailed procedures in using ESA facility for an IPO application.

How does the ESA facility function during an IPO?In brief, the IPO applicant will apply for a specific IPO by entering the appropriate details via the PFI's ATM. Once the details been entered successfully, the applicant's banking account will be debited for the appropriate amount accordingly. The PFI will then collate all the ESA applications of its account holders and forward them to the relevant Issuing House for processing and balloting.

What will happen in the event of a successful IPO application via ESA?Upon completion of the balloting process, the CDS account of the successful applicant will be credited with the appropriate amount of shares allotted. The applicant will also receive a Notice of Allotment from the IH confirming the quantity of shares to be credited into his CDS account.

What will happen in the event of an unsuccessful IPO application via ESA?Upon completion of the balloting process, the IH will issue an instruction to the relevant PFI on all its account holders' unsuccessful applications. The PFI upon receiving this instruction from the IH will credit the appropriate amount back into the banking account of the unsuccessful applicant.Note:The above FAQ on ESA facility is only intended to provide IPO applicants with a brief overview on the ESA facility. The procedures and guidelines governing the operations of ESA facility may vary from one PFI to another. If in doubt, applicants are encouraged to seek necessary clarification on the usage of the ESA facility directly from the respective PFI or Issuing House.

Transmission of Title Who is authorised to liaise with Bursa Malaysia Depository with regards to the CDS account(s) of a deceased depositor?Bursa Malaysia Depository can only liaise with the following personal representatives in terms of balance enquiry, closing of accounts, and transfer of securities:a. Beneficiary named in the Distribution Orderb. Executor/Administrator appointed pursuant to Grant of Representation

Can the CDS account of a deceased depositor be suspended if wanted to?Yes, the next of kin of the deceased depositor may suspend the CDS account by carrying out the following procedures:a. Notifying the Bursa Malaysia Depository in writing, of the death of the depositorb. Submitting the following documents to Bursa Malaysia Depository:i. A duly executed Suspension/Release of Suspension of Securities Request formii. A certified true copy of the deceased's death certificateiii. A certified true copy of the next of kin's NRICiv. A certified true copy of marriage certificate/birth certificate of the next of kin to prove the relationship with the deceasedThe form must be executed before a Notary Public/Advocate & Solicitor/any of the CDS officers of the ADA in Malaysia. The above mentioned documents must also be certified true by the same witness who witnesses the execution of the said form.

What is the procedure for transferring securities in the case of a deceased depositor?Procedures are as follows:a. Upon the extraction of the Grant of Representation (GOP), Letter of Administration (LA) or the Distribution Order, transfer of securities from the deceased depositor's account may be performed by the executor/administrator appointed pursuant to the GOP or the beneficiary named in the Distribution Order, who must be personally present before an officer of Bursa Malaysia Depository to execute the relevant transfer form.Please note that the GOP/LA obtained from other countries have to be duly resealed in the High Court of Malaysia.b. Submit the following documents to Bursa Malaysia Depository for verification:i. Certified true copy of the death certificateii. Original or certified true copies of the GOP/LA/Distribution Orderiii. Original or certified true copies of NRIC of the executor/administrator or beneficiary named in the Distribution Orderc. Pay the RM10transfer fee and RM50 processing fee

What if the executor/administrator/beneficiary cannot be present at Bursa Malaysia Depository?In the event that the executor / administrator / beneficiary is unable to be present at Bursa Malaysia Depository, they may write to Bursa Malaysia Depository for a waiver of their presence at Bursa Malaysia Depository and state the name of the ADA where they wish to execute the relevant form. Documents as per Q3 must also be submitted together with the said letter.

What if the executor/administrator/beneficiary resides outside of Malaysia?In the event that the executor / administrator / beneficiary reside outside of Malaysia, they may write to Bursa Malaysia Depository for a waiver of their presence at Bursa Malaysia Depository. Documents as per Q3 must also be submitted together with the said letter. Bursa Malaysia Depository will then send them the relevant form for their execution before a Notary Public.Delisted SecuritiesFor Depositors What happens to the delisted securities in my CDS account?Delisted securities in your CDS account will continue to be deposited with Bursa Malaysia Depository Sdn Bhd.

Can I keep delisted securities in my CDS account?Yes, you can.

What are the advantages of keeping delisted securities in my CDS account?Your securities are kept securely by Bursa Malaysia Depository thus avoiding the need for handling physical scrip and the possibility of misplacing them. Apart from that, you will also continue to enjoy all the CDS facilities extended by Bursa Malaysia Depository to its account holders.

Will I incur any fees if I maintain delisted securities in my CDS account?Presently, you are not subject to any fees for maintaining delisted securities in your CDS account.

Am I allowed to trade the delisted securities on the stock exchange?No, you are not allowed to trade securities which have been delisted from the Stock Exchange.

Will the delisted securities in my CDS account still be reflected in the CDS statement of account?Yes, it will.

Will I continue receiving my CDS statement of account if it contains only delisted securities?Yes, you will continue to receive the CDS statement of account every half yearly.

Is the inactive account status applicable to CDS accounts holding only delisted securities?Yes, a CDS account holding only delisted securities will be designated as inactive if there are no CDS activities for 36 consecutive months.

Am I allowed to transfer delisted securities?Yes, you may transfer your delisted securities to another CDS account by submitting the duly completed Transfer of Securities Request Form (FTF010) to your Authorised Depository Agent (ADA), where your CDS account holding your delisted securities is maintained.

Will the transfer of delisted securities be subject to Bursa Malaysia Depository's approved reasons for transfer?No, the approved reasons for transfer are only applicable to listed securities. Delisted securities are not subject to this requirement.

Am I allowed to withdraw delisted securities from my CDS account?Yes, you can.

How do I withdraw delisted securities?To withdraw, you need to do the following:a. Complete and submit the Securities Withdrawal Request form (FWT010)b. Complete the Form of Transfer of Securities (Form 32A) with sufficient stamp duty affixedc. Submit the duly completed FWT010, Form 32A and the appropriate withdrawal fee to the ADA which maintains your CDS account holding for further processing.

Where can I obtain the FWT010 Form and Form 32A?You can obtain both forms from your ADA.

How much does it cost to withdraw delisted securities?Currently the withdrawal fee is RM15 per 1000 securities or part thereof. In addition, there is a stamp duty charge for executing Form 32A. The stamp duty will be charged according to the prescribed rate in the Stamp Act 1949.

Will I be entitled to any corporate action announced by the delisted company in future?Your entitlement as a shareholder will be decided by the Issuer.

What will happen to delisted securities that are pledged to the bank?This will depend on your arrangements with the bank. Therefore, you should seek their advice on this matter.

What will happen to my unclaimed securities if Jabatan Akauntan Negara approves my claim after the delisting date?Bursa Malaysia Depository will follow the relevant directive from the regulators on this matter.For Issuers Can we request for the Record of Depositors (ROD)?Yes, you can. Bursa Malaysia Depository will continue producing the ROD upon receiving a formal request from either the Issuer or Share Registrar. This is subject to the requester paying the appropriate ROD fees.

Will we incur any fees if we maintain our company's securities in the CDS?The current practice will continue to remain.

3)Market Terminology

AllotmentThe allocation of new securities to an applicant for a new issue.Annual General MeetingMandatory yearly meeting of a company for the purposes of receiving the directors' report and statement of accounts for the year, declaring a dividend, electing directors and auditors and determining the auditors' remuneration.Annual Report & AccountsA document to be forwarded to shareholders by the directors of a company on an annual basis which contains, amongst others, the annual audited accounts of the company.ArbitrageBuying on one exchange and selling on another at virtually the same moment to take advantage of a price variation in a company's shares listed on the two exchanges.Articles of AssociationThe documents of a company that govern the management and administration of that company.Asset BackingA handy yardstick for shareholders. It is the net assets of a company (assets less liabilities) divided by the number of shares.At DiscretionAn instruction given by a client to his broker, for the broker to buy or sell a stock at his (the broker's) discretion.At LimitAn order placed which sets a limit on either the lowest or highest price, for which a share is bought or sold.At Market (also At Best)An instruction to buy or sell at market price. Allows the broker/dealer complete freedom of action. Should be treated with caution and used only when a share must be sold.AuthorisedOrder entry, modification, and cancellation are generally authorised for the instrument.Authorised CapitalThe nominal amount of capital that a limited company is permitted to raise under the capital clause in its Memorandum of Association.AveragingBuying more of the same shares, generally on a falling market, to lower the average cost per share. (Can also average up, thereby raising the average cost per share).Balance SheetA company's year-end statement of assets and liabilities.Bear MarketA stock market in which sellers dominate, resulting in generally falling prices.Blue ChipsThe shares of a company known to make profits in good and bad times. As there is a low risk of capital loss, the dividend and earnings yield are proportionately low.BondA document recording a loan and specifying the date of maturity and the rate of interest to be paid.Bonus IssueDistribution of capital funds (usually from a revaluation of assets or a share premium reserve) to shareholders in the form of shares for which payment is not required.BourseA French term for stock exchange, grain exchange or exchange dealing in commodities.Broker (Stockbroker)An agent, authorised to buy and sell shares on behalf of a client.BrokerageA fee charged for the broker's services. Also called commission.Bull MarketA stock market in which buyers dominate and where prices are on a rising trend.

Buying-InBuying-in means the buying effected by the Exchange, according to the rules of the Exchange, of securities which a seller has failed to deliver on the day fixed for delivery.CallsAn instalment called up by a company on contributing or partly paid shares. A legal liability for shareholders of other than a "No Liability" company.Capital Gain/ LossProfit/loss made on the sale of a capital asset.Closing PriceThe price of a share or security at the end of a day's stock market trading.Closing Session The closing price will be the last know traded price Last opportunity to close position at a fixed price In the event of no TCP during the period, the closing price will be the last know traded priceClass of SharesA document recording a loan and specifying the date of maturity and the rate of interest to be paid.CommissionA fee charged for the broker's services. Also called brokerage.Companies Act 1965The Act of Parliament that governs companies.CompanyA separate legal entity, incorporated under the Companies Act 1965, carrying on a business or trade. A company may be private or public, limited by shares or unlimited, or limited by guarantee.Contract NoteDocument sent by brokers to clients of a purchase or sale of shares. It confirms the transaction, giving details of price, brokerage, stamp duty and clearing fee.Continuous MatchingContinuous Matching is an order matching process according to price, time, then priority, without human intervention. After receiving buy or sell orders, Bursa Trade queues the orders and arranges them according to a price-then-time priority. This means orders are first grouped according to price, with the best price taking precedence. Then, within each price group, orders are arranged according to time. Continuous matching procedures only operate during the regular trading sessions. Bursa Trade continuously matches the first buy and sell orders in the queue, and at the same time, confirms each executed transaction.CumA prefix meaning "with". A share quoted "cum-dividend" means the buyer is entitled to a dividend currently attaching to it, similarly with cum-rights and cum-bonus.DebentureA fixed interest security which has a maturity date and a specified rate of interest. The assets of the borrowing company are charged against the debenture issue; details of the charge are included in a Debenture Deed drawn up to protect the debenture holder.Debt / Equity RatioThe relationship between a company's borrowing and its shareholders' capital funds.Direct BusinessIn relation to the KLSE, any share transactions effected outside the Exchange, including: crossing, that is transaction between two stockbroking companies; or "married" transaction between two clients within a stockbroking company.DiscountThe amount by which the price of a share is quoted below its paid-up value.DissolutionThe winding up of a company by way of compulsory liquidation or voluntary liquidation.Dividend CoverThe number of items a company's annual dividend could be paid out of current earnings.Dividend YieldThe amount of a company's annual dividend expressed as a percentage of the current price of the share of that company.Earnings Per ShareThe amount of a company's annual profits or earning attributable to each ordinary share of that company.EquityAnother name for the ordinary shares of a company.ExPrefix meaning "without", the opposite to "cum". The purchaser is not entitled to dividends, bonus shares or rights previously attached to the share.Face ValueThe actual paid-up value of a share. Seldom the same as the market value.FloatTerm given to the commencement or listing of a new company on the stock market.ForbiddenOrder, entry, modification and cancellation are forbidden for the instrument Auto forbidden is activated when an instrument expires at the end of a particular contract month.Gilt EdgedA term usually associated with government or semi-government securities, more generally used on British markets.Growth StocksShares of companies with good prospects for increasing profits and capital size. Likely to bring shareholders future capital gains through a share price rise, high dividends, share bonuses or rights issues.IndicesIn relation to a stock exchange, calculations made on an index number basis to indicate the movements in the general level of prices of securities listed on that stock exchange.Initial Public Offering (IPO)An initial public offering (IPO) occurs when a company first sells common shares to investors in the public. Generally, the company offers primary shares this way, although sometimes, secondary shares are also sold as IPOs. For a company to offer IPOs, they need to hire a corporate lawyer as well as an investment banker to underwrite the offer. The actual sale of the shares is generally offered by the stock exchange or by regulators. When the company starts to offer IPOs, they are usually required to reveal financial information about the company so that investors can make an informed decision.Insider Trading/ DealingInsider trading or dealing is the purchase or sale of a company's securities effected by or on behalf of a person with knowledge of relevant but non-public material information regarding that company. The insider is in a position to make massive gains by selling or buying securities before information that might affect the price of the company's securities (price-sensitive information) is made public.Insider trading is an offence under the Companies Act 1965 and the Securities Industry Act 1983.InstrumentA tradeble asset or negotiable item such as a security, commodity, derivative or index, or any item that underlies a derivative. An instrument is a means by which something of value is transferred, held or accomplished.Issued Share CapitalThe total number of shares issued by a company.Limit OrderTo avoid buying or selling a stock at a price higher or lower than what is wanted, it's best to place a limit order rather than a market order. A limit order is an order to buy or sell an instrument at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. When a market order is placed, the price at which an order will be filled can't be controlled. For example, if you want to buy a "hot" stock that was initially offered at RM9, but don't want to end up paying more than RM11.70 for the stock, you can place a limit order to buy the stock at any price up to RM11.70. By entering a limit order rather than a market order, you will not be caught buying the stock at RM11.70 and then suffering immediate losses if the stock drops later in the day or the weeks ahead. A limit order may never be executed because the market price may quickly surpass the investor's limit before the order can be filled. Using a limit order also protects the investor from buying a stock at too high a price. Some firms may charge more for executing a limit order than a market order.LiquidationThe winding up of a company, which may either be compulsory or voluntary.Liquidity of The MarketThe state of affairs in a stock market in which it is generally easy to convert securities into cash and vice versa, without causing a movement in prices.Loan StockA security issued by a company in respect of a loan made by investors.ManipulationsThe act of transacting in the securities of a company that will have or is likely to have the effect of raising or lowering or maintaining the price of the company's securities on a stock market, with the intention of inducing other persons to purchase or subscribe for the company's securities. Such acts are illegal under the Securities Industry Act 1983.Market CapitalizationThe total value of a listed company's shares based on current market price.Market OrderA market order is an order to buy or sell a stock at the current market price. Unless otherwise specified, a broker will enter an order as a market order. The advantage of a market order is that it is almost always guaranteed that the order will be executed (as long as there are willing buyers and sellers). Depending on a firm's commission structure, a market order may also be less expensive than a limit order.Marketable ParcelShares traded on a stock exchange as set in multiples based on share price.Market BidsA scale on which trading bids, through a stock exchange, are based.Memorandum of AssociationThe document of a company that lays down its name, registered office, objectives, share capital and the liability of its members in the event of winding up.MergerIn general terms, the amalgamation of two business enterprises into a new entity.Negotiated CommissionThe amount of fee to be paid to a stockbroker as agreed upon between client and stockbroker and not subject to a scale stipulated by the stock exchange concerned.Nominee CompanyA company formed by a stockbroking company, bank or other institution for the purpose of holding shares on behalf of the beneficial owners of the shares.Odd LotsThis is an amount of shares that is smaller than the usual unit of trading; specifically, a quantity of less than 100 shares of stock in a transaction or a trade that is not divisible by 100.Odd Lot MarketThe Odd Lot market refers to the trading of shares that are less than 100 shares of stock Partial matching is allowed Order are matched based on price time priority Price limit follow normal marketOffer for SaleOne way in which the shares of a company are offered to the public, normally through an issuing house.Official ListIn respect of the Kuala Lumpur Stock Exchange, the list of all securities which have been admitted for quotation in accordance with the Exchange's Listing Requirements.OpenOrder entry, modification, cancellation and order execution are allowed for the instrument assuming the group state permits.Opening and Continuous Trading Orders are matched real-time based on price-time priority Opening price and quantity of orders matched are broadcast After the Opening Auction, system automatically moves to continuous trading phase Matched Trades can be continuously viewed from any front-end system 5 best price limits are displayedOptionRight to take up or sell shares at an agreed price at or before a specified future date. Prefixed with terms of "call" or "put".Order BookOrder Book is an 'electronic book' that shows the demand for the shares of the company at various prices on a real time basis.Paid-Up CapitalThe amount of a company's authorised capital which has been subscribed by shareholders.Par ValueThe nominal price of a share, loan stock or debenture.Pari PassuIn relation to a statement that newly issued shares rank pari passu with all existing shares, such newly issued share rank equally in every respect with all the other shares of the same class previously issued.PortfolioA selection of securities held by an investor.PremiumThe amount by which a share is quoted above its paid-up value.Pre-Closing Starts immediately after end of continuous trading phase Orders are accepted and automatically updated in order book WITHOUT giving rise to trades Theoretical Closing Price (TCP) based on orders entered, is dynamically calculatedPre-Opening Enter, modify or delete orders No order matching is done Theoretical Opening Price (TOP) based on orders entered is dynamically calculated, and the last TOP calculated before opening time is set as the natural opening price Order in order book is broadcastedPrice DiscoveryThe process by which price is determined by negotiation in a free market. Basically, any asset purchased by an investor can be considered a financial instrument. Stock and corporate bonds are equally considered investing instruments as they can all be bought and sold as things that hold and produce value. Instruments can be debt or equity, representing a share of liability (a future repayment of debt) or ownership.Price Earnings RatioThe relationship between the price of a share and the earnings of the company attributable to that share, the result being expressed as the current share price divided by the latest available figure of earnings per share.Private CompanyA company in which the number of its members is restricted to 50.PrivatisationThe Government's exercise of the transfer to private ownership companies or public enterprises owned by the Government.ProspectusThe document to be issued by a company intending to make an issue of shares to the public.ProxyOne who is given written authority to vote for and on behalf of a shareholder at a meeting of the company.ReceiverAn official appointed to wind up the affairs of a company.RegistrarThe official or corporation responsible for maintaining a company's share register.Registrar of CompaniesThe public official appointed to administer the Companies Act 1965 and the Securities Industry Act 1983.RemisierAn agent of a stockbroking company who brings business to that company in return for a share of the brokerage or commission.RenunciationThe action of a shareholder in not taking up new shares attached as a right to the share he currently holds by renouncing such a right.ReservesOrder entry, modification, and cancellation are permitted for the securities. The current trading status for the securities is automatically changed to 'Reserved' when the following occurs:Market order cannot be fully executed, potential match price is outside static threshold during pre-opening, and Market-on-Opening has no counterpart.RightsCompanies raise additional capital by offering to existing shareholders the rights to subscribe for new shares, at a price usually below the current market price. These rights, while current, attract a price of their own and can be traded on any stock exchange.ScoreThe acronym for "System on Computerised Order Routing and Execution", the automated trading system of the Kuala Lumpur Stock Exchange.ScripShare certificate.SecuritiesThe generic term for any instrument traded on a stock exchange.Securities Industry Act 1983The Act of Parliament governing the business of dealing in securities, stock exchanges and related matters in Malaysia.Securities CommissionEstablished by the Ministry of Finance to streamline the activities relating to equity and futures markets.Securities Commission Act