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We recorded strong performance from our securities and derivatives front in 3Q2011. Amid volatility and uncertainties in the market, daily average trading value for the securities market increased to RM1.9 billion for the quarter, compared with RM1.6 billion in the previous quarter. Our FBM KLCI index fell 12% from the previous quarter in line with other regional indices, as investors mulled over concerns on global growth and European sovereign debt issues.
On the derivatives front, we celebrated two significant milestones. Total annual volume for FCPO and all Bursa Malaysia Derivatives’ contracts charted new high, surpassing the previous records achieved in 1980. For 3Q2011, daily average contracts increased to 34,169 contracts, up six per cent from the second quarter last year. Bursa Malaysia Derivatives is relentless in its effort to embark on training and education programmes, as well as working on new initiatives to develop the derivatives market.
A key event that happened this quarter was the 2nd ASEAN Broker Networking session, held in Thailand as part of the ASEAN Exchanges Collaboration. This reflected the commitment by ASEAN Exchanges to promote ASEAN as an attractive asset class to investors. We celebrated the successful conclusion to Market Chat 2011-2012 by recognising our broker partners for their valuable contributions in reaching out to retail investors.
From our regulatory side, Bursa Malaysia announced the various amendments made to the Listing Requirements and introduced a Corporate Disclosure Guide (CD Guide) as part of our efforts to promote high standards of corporate disclosure. You can view the amendments and CD guide by clicking here.
If you have any feedback or input for our newsletter, please send an email to
Issue 3 Vol 3 OCT 2011
Happenings and updates from Bursa Malaysia
HIGHLIGHTSMarket Highlights
The 2nd Asean Broker •Networking
Market Chat 2010-2011•
Derivatives FCPO Contract •Records a New High
Derivatives Education and •Improving Distribution Channels
Dialogue with CFTC•
Corporate Access
In• terview with CEO/Group Managing Director of Kossan Rubber Industries Bhd
RegulationEducation Programme for Futures Brokers •Representatives (FBRs) on Key Obligations Relating to Trading
Half Day Governance Programmes for •Directors
Corporate Governance Guide (CG Guide) in •Bahasa Malaysia and Mandarin
MSWG’s Seminar Themed ‘Driving the •Corporate Governance Agenda’
Note From The Editor
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MARKET HIGHLIGHTS
The 2nd Asean Broker Networking
The session focused on the
latest developments and
value propositions from
each of the participating
countries. Additionally, it
provided an opportunity for
the stockbroking fraternity
to familiarise and establish a
relationship with each other.
To promote the growth of the ASEAN capital market and bring more ASEAN investment opportunities to more people, Bursa Malaysia, Hanoi Stock Exchange (HNX), Hochiminh Stock Exchange (HOSE), Indonesia Stock Exchange (IDX), The Philippine Stock Exchange Inc. (PSE), Singapore Exchange (SGX) and The Stock Exchange of Thailand (SET) are collaborating to give investors an integrated single-window view into the ASEAN capital market.
The 2nd ASEAN Broker Networking session was held on 28 – 29 July 2011 in Phuket, Thailand. Hosted by SET to promote cross-border partnership among ASEAN brokers, the session attracted a total of 140 senior representatives from 62 stockbroking companies/investment banks from Malaysia, Vietnam, Philippines, Singapore and Thailand. The session focused on the latest developments and value propositions from each of the participating countries. Additionally, it provided an opportunity for the stockbroking fraternity to familiarise and establish a relationship with each other. Besides the discussions on the ASEAN trading link, the Broker Networking Session facilitated over 200 one-on-one meetings amongst the participants.
Malaysia was represented by 130 brokers from 17 stockbroking companies/investment banks, representing approximately 55% of market share. Of the 200 meetings organised for the event, Malaysian brokers participated in 130 one-on-one meetings. Many found the session to be useful and effective as they were able to meet with many ASEAN brokers.
With strengthened relationships and a successful conclusion to the 2nd ASEAN Broker Networking session, it is expected that the ASEAN Exchanges collaboration will promote cross border partnership further. The ASEAN Link is expected to go live in 2012. For progress and details on activities from ASEAN Exchanges, visit www.aseanexchanges.org.
From left : Dato’ Tajuddin Atan, CEO, Bursa Malaysia Berhad, Nguyen Van Dzung, Deputy CEO, Hanoi Stock Exchange, Pattera Oilokrungthirapop, CEO, DBS Vickers Securities (Thailand) CO. Ltd. & President of ASCO, Hans Sicat B., President & CEO, The Philippine Stock Exchange, Charamporn Jotikasthira, President, The Stock Exchange of Thailand.
Dato’ Tajuddin Atan (centre) posing with representatives from the eight participating brokers.
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Dato’ Tajuddin Atan delivering his keynotes address at the Market Chat appreciation night.
MARKET HIGHLIGHTS
MARKET CHAT 2010-2011On 12 July 2011, Bursa Malaysia celebrated the conclusion of Market Chat 2010-2011 by hosting an appreciation night for the eight participating brokers and investment banks. In its fourth season, Market Chat 2010-2011 saw the participation of 12,000 retail investors attending the six-month event.
This season’s Market Chat also had greater presence in non-traditional markets, with roadshows in cities including Bintulu, Sibu, Tawau, Lumut and Kota Baru.
“When we embarked on this programme four years ago, we wanted to collaborate with the industry to reach out to the retail community. In 2007, our inaugural Market Chat attracted about 2,700 retail investors, with three brokers and 13 roadshows. Today, we have eight brokers, 78 roadshows and 12,000 retail investors. This is a growth of about five times in four years,” said Bursa Malaysia’s Chief Executive Officer, Dato’ Tajuddin Atan.
Participating brokers said the response to this year’s event was overwhelming, particularly in smaller towns which were traditionally neglected. They believed Market Chat has gained recognition as a meaningful platform for brokers to interface directly with investors to retain and build a sustainable investor base. Some participating brokers have opened new branches in smaller cities like Sibu.
The eight participating brokers for Market Chat 2010-2011 were Affin Investment Bank, CIMB Investment Bank, Hong Leong Investment Bank, Jupiter Securities, Maybank Investment Bank, MIMB Investment Bank, OSK Investment Bank and RHB Investment Bank
MARKET HIGHLIGHTS
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DERIVATIVES FCPO CONTRACT RECORDS A NEW HIGH
Bursa Malaysia Derivatives (BMD) crude palm oil futures contract (FCPO) continued to record strong growth post-migration to Globex®. At the close of trading on 13 September 2011, FCPO’s trading volume registered a new high of 4,085,147 contracts, surpassing the previous record of 4,064,361 contracts traded for the whole of 2010. This record volume is an exceptional achievement since its inception in 1980.
Dato’ Tajuddin Atan, Chief Executive Officer of Bursa Malaysia and Chairman of BMD commented “This record-breaking achievement strengthens the position of our FCPO contracts as the global pricing benchmark for palm oil and palm oil-based products. The uncertainty in global financial markets has resulted in a shift of funds from equities to other asset classes and this trend is expected to continue over the next few months. Achieving this milestone so close to the first-year anniversary of our migration onto the CME Globex® trading platform is a feat worth highlighting. We are proud that our internationalisation approach via the strategic collaboration with CME Group has proven to be successful.”
The migration to CME Globex® further strengthened the visibility and accessibility of Malaysian derivatives offerings. This is translated via a steady increase in open interest for FCPO, reflecting the entry of new traders into our market. The previous record high of open interest was on 15 July 2011, with 136,602 contracts.
DERIVATIVES EDUCATION AND IMPROVING DISTRIBUTION CHANNELS
OPTIONS TRAINING1. In preparation for the launch of new option contracts in 2012, BMD commenced refresher courses and market briefings on options trading. The main objectives were to educate participants on the fundamentals of options, hedging with options and basic options trading strategies.
BMD arranged a ‘Trading on Options’ course that was conducted by Mr. Way Yee Bay, Director of Client Development (CME) and Mr. Chong Lock Kuah, a trading representative of a Singapore broking entity. The audience comprised representatives from the Securities Commission, Bank Negara Malaysia, Trading Participants (TPs) and Fund Managers. Educational activities for retail investors were conducted via briefing sessions jointly organised by BMD and TPs.
RETAIL ENGAGEMENTS AND TALK FUTURES EDUCATIONAL SERIES 2. BMD, together with TPs, organised a retail educational series in June 2011 to educate the public on futures trading. Participating TPs include ECM Libra Investment Bank Berhad, IF Derivatives Sdn Bhd, TA Futures Sdn Bhd and OSK Investment Bank Berhad. Over 50 roadshows were organised with more to be rolled out until year-end. Locations are wide-spread from major cities to smaller townships nationwide, ranging from Kuala Lumpur, Kota Kinabalu, Ipoh, Penang, Kota Bharu, Kuantan, Seremban, Melaka, Muar, Batu Pahat, Kluang, Setiawan and Yong Peng. BMD also profiled participating TPs at the InvestFair event, held on 23 – 24 July 2011 at the KL Convention Centre.
DUAL-LICENSING FAST-TRACK PROGRAMME 3. The Dual Licensing Fast-Track Programme received tremendous response from the public, with sessions in KL, Ipoh and Penang fully booked until year end. As at mid-September, 214 equity dealer representatives successfully completed the programme. The good response to this programme is expected to enhance the distribution channel and improve accessibility of our derivatives offerings.
Bursa Malaysia Derivatives showcasing their trading participants at Invest Fair 2011 at the Kuala Lumpur Convention Centre.
MARKET HIGHLIGHTS
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DIALOGUE WITH U.S. COMMODITY FUTURES TRADING COMMISSION (CFTC)
A dialogue session involving two senior CFTC representatives were held on 15 – 18 August 2011 to provide insights on the regulatory obligations with respect to Part 30.10 Relief received. CFTC was responsible for issuing Part 30.10 Relief to Bursa Malaysia Derivatives, enabling our brokers to market our products to U.S. customers without having to become a Futures Commission Merchant in the U.S. This relief was given in view of the comparability of our Malaysian statutory and regulatory regimes.
Mr. Ananda K. Radakrishnan, Director for Clearing & Intermediaries Oversight and Mr. David Kass, Senior Economist, Market Supervision from the CFTC were on the ground to share their experience and response on various clarifications sought.
A dialogue session with Bursa Malaysia’s Trading Participants and representatives from the U.S. Commodity Futures Trading Commission.
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EDUCATION PROGRAMME FOR FUTURES BROKERS REPRESENTATIVES (FBRs) ON KEY OBLIGATIONS RELATING TO TRADING
In May 2011, Bursa Malaysia embarked on a new and improved programme for Futures Brokers Representatives (FBRs) with the theme “Key Obligations of FBRs Relating to Trading”. The new programme is a half day course and has been restructured to include contents which are relevant to FBRs, covering regulatory matters on supervision and surveillance, and pertinent trading related matters. This comprehensive coverage is intended to further promote higher standards of business conduct in the industry.
The new programme covers regulatory and operational aspects of front office activities under four broad topics on Know Your Client (“KYC”); Do’s and Don’ts of Trading; Market Offences and Trading on Globex – System Control & Procedures.
The new programme is now approved by the Securities Industry Development Corporation (SIDC) as a recognised CPE programme with 5 CPE points. With the SIDC accreditation, we hope participation will continue to grow.
This year’s programme was held in Kuala Lumpur, Penang, Johor Bahru and Kota Kinabalu.
REGULATION
HALF DAY GOVERNANCE PROGRAMMES FOR DIRECTORS
As a front-line regulator committed to maintaining the integrity of the market and advocating best business practices for sustainable growth, Bursa Malaysia continues to reach out to more board of directors of public listed companies to promote good corporate governance and sustainability practices.
Bursa Malaysia’s Half Day Governance Programmes to-date has featured various governance issues such as board governance, risk and control environment and conflict of interest. These sessions have received encouraging response from directors. The governance programme on “Assessing the Risk and Control Environment” held in March 2011 received overwhelming response from the directors. This led to another session which was held on 22 August 2011.
CORPORATE GOVERNANCE GUIDE (CG GUIDE) IN BAHASA MALAYSIA AND MANDARIN
In an effort to reach more directors, Bursa Malaysia translated the Corporate Governance Guide: Towards Boardroom Excellence (CG Guide), which was introduced in June 2009, into Bahasa Malaysia and Mandarin.
The translated CG Guides are available for download at Bursa Malaysia’s website. Training programmes on the CG Guide in Bahasa Malaysia and Mandarin were held in February, March and May 2011. A total of 150 directors attended the training sessions.
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REGULATION
MSWG’S SEMINAR THEMED ‘DRIVING THE CORPORATE GOVERNANCE AGENDA’
On 28 July 2011, the Minority Shareholder Watchdog Group held a seminar themed “Driving the Corporate Governance Agenda” at Bursa Malaysia. The seminar, featuring prominent corporate governance experts and representatives from Malaysian public listed companies, provided a platform for speakers to share local, regional and international best practices in corporate governance and ways to move forward.
Bursa Malaysia’s Chief Regulatory Officer, Ms. Selvarany Rasiah, moderated a session titled “Regional and International Perspectives on Corporate Governance Best Practices” and the panel members for the session were Mr. John Zinkin, Managing Director, International Centre for Leadership in Finance (ICLIF) and Mr. David Smith, Co-Head, Asia Pacific Governance Research, ISS Governance. The session explored governance issues both internationally and in the Asian markets. The panel members also discussed the recent corporate governance reforms regionally and globally.
At the rostrum, John Zinkin, Managing Director, ICLIF and from left, panelists David Smith, Co-Head, Asia Pacific Governance Research and Selvarany Rasiah, Chief Regulatory Officer, Bursa Malaysia.
INTERVIEW WITH DATO’ LIM KUANG SIA (KS LIM), CEO/GROUP MANAGING DIRECTOR OF KOSSAN RUBBER INDUSTRIES BHD
As the CEO of the company, what are the important attributes you look for in your staff?
Integrity, attitude and execution capability are the “must have” attributes when hiring new staff and I do believe in continuous training and development to help our people in bringing their execution capability into another level along their career path in Kossan Rubber.
How would you describe your style of management?
I adopt a lean structure in my management control. All the important business units are taken care of by a general manager and they report to me during monthly management meetings. I maintain an open door policy to my people since I started the company and all my people are encouraged to share their opinion.
What is the most challenging aspect of being the CEO of the company and in your view, what skills/knowledge are important when faced with challenges?
The most challenging aspect is how to keep the company in delivering long term and sustainable growth. I like to model my company with those corporations in the western countries which have 100 over years of establishment and still growing today.
Good understanding in the business that we are in and ability in analysing data/information critically are vital when faced with business challenges. Even before the business challenges knock on the door, we have to keep ourselves prepared and in this perspective, data and information are the key determinants for our decisions.
Kossan Rubber is one of the world’s largest disposable latex glove manufacturers with total installed capacity of above 12 billion pieces per annum. It is also the largest technical rubber products manufacturer in Malaysia. The Company has grown from strength to strength under the stewardship of its founder, Dato’ KS Lim since the late 70’s.
The Management of Kossan Rubber places strong emphasis on Investor Relations (“IR”) as they believe IR is an effective tool to foster greater degree of transparency and help the investment community to truly understand the business and the industry and therefore; able to make better decision in their investment portfolio. With this IR effort throughout the years, the Company was awarded two awards in the Malaysia Investor Relations Award 2011, which are The Best Company for IR and The Best IR Professional under the Small Cap Category.
Malaysian Investor Relations Association Berhad (MIRA) is a company limited by guarantee established by Bursa Malaysia to promote the good practice of investor relations by public-listed companies.
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Below is an excerpt of the interview, up close and personal with Dato’ KS Lim conducted by MIRA:
CORPORATE ACCESS
CORPORATE ACCESS
IR Tracker
Company : Kossan Rubber Industries Berhad
Board : Main Market
Sector : Industrial Products
Stock code : 7153
Stock name : Kossan
Financial year end : 31st December
Latest results release : 2nd quarter ended 30 June 2011
IR Contact : Mr. Edward Yip
Senior Manager, Group Corporate Affairs
Email : [email protected]
Website : www.kossan.com.my
Details correct as at 30 September 2011
For more information on MIRA, please contact Alex Lee at +603-20347491 or [email protected].
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What is your golden rule of life?
The sky is not the limit and yet we must know where our limit is. We should not over stretch ourselves in things we do and must always leave some space for us to stand up again if we fall.
SECURITIES MARKET SNAPSHOT 3Q 2011Indices 3Q 2011 2Q 2011FTSE Bursa Malaysia KLCI FTSE Bursa Malaysia Top 100 FTSE Bursa Malaysia EMAS FTSE Bursa Malaysia ACE FTSE Bursa Malaysia Palm Oil Plantation FTSE Bursa Malaysia Asian Palm Oil Plantation (USD) FTSE Bursa Malaysia Asian Palm Oil Plantation (MYR) FTSE Bursa Malaysia Hijrah Shariah FTSE Bursa Malaysia EMAS Shariah Market Highlights Units 3Q 2011 2Q 2011Market Velocity (Quarterly Average) % Market Capitalisation (as at end of quarter) RM bil Total Trading Volume (OMT + DBT) bil Trading Volume (OMT) bil Average Trading Volume (OMT) bil Total Trading Value (OMT + DBT) RM bil Trading Value (OMT) RM bil Average Trading Value (OMT) RM bil No. of Trading Days day No. of PLCs counter No. of Listed REITs counter No. of Listed Structured Warrants counter New Listings - IPOs (Including REITs) counter New Listings - Structured Warrants counter No. of Delisted Companies counter Total Funds Mobilised RM bil No. of Rights and Bonus Issues unit No. of New CDS Accounts Opened account
FOREIGN OWNERSHIP BASED ON MARKET VALUE
1998
Jun-
1120
1020
09
May-1
120
08
Apr-11
2007
Mar-11
2006
Feb-
1120
05
Jan-
1120
04
Dec-1
020
03
Nov-1
020
02
Oct-10
2001
1999
2000
21.4
%
21.7
%
21.7
%
22.0
%
22.0
%
21.4
%
21.9
%22.1
%
21.8
%
23.1
%
21.8
%
19.5
%
18.5
%
18.1
%
18.1
% 21.2
%
21.6
% 24.2
%
26.2
%
21.3
%
20.4
%
21.9
%
SECURITIES
1,387.139,253.749,397.573,597.95
14,019.2318,183.0420,163.63
9,765.669,126.66
1,579.0710,613.0410,842.25
4,198.1815,396.5321,063.7422,098.6710,995.9110,517.49
33.51,172
6359
1.01171071.762
95214
2969
9210
7.219
42,615
29.81,342
6563
1.0103
991.663
95314
2958
869
3.013
49,138
Jul-1
1
Aug-1
1
Sep-1
1
As at Month End As at Year End
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22.1
%
21.6
%
22.2
%
INFORMATION PACKAGE:-
We also offer a wide range of products and services for our investing public. To learn more, kindly click on the following:
• Investor Information
• Historical Information
• Bursa Station
DAILY MARKET TREND: FBMKLCI AND MARKET VELOCITY
DAILY MARKET TREND: MARKET CAPITALISATION, TOTAL VOLUME AND VALUE
FBM
KLCI
Market Velocity
Mkt Capitalisation (RM
bil)Volu
me
(bil)
& V
alue
(RM
bil)
Mkt Capitalisation
Velocity FBMKLCI
Total Value Total Volume
Jul-1
1
Jul-1
1
Aug-1
1
Aug-1
1
Sep-1
1
Sep-1
1
Oct-10
Oct-10
Nov-1
0
Nov-1
0
Dec-1
0
Dec-1
0
Jan-
11
Jan-
11
Feb-
11
Feb-
11
Mar-11
Mar-11
Apr-11
Apr-11
May-1
1
May-1
1
Jun-
11
Jun-
11
0%
1,400
1,600
1,700
1,400
1,000
1,500
1,100
1,200
1,300
1,600
800
400
00
1
4
7
3
6
5
8
9
2
1,200
1,000
600
200
60%
40%
20%
100%
80%
120%
SECURITIES
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SECURITIES
Total Volume Total Value FBMKLCI
Note: Both Total Volume and Total Value include odd lot and direct business transactions
MARKET PERFORMANCE
You may refer to the following link for details on IPOs.
IPO Summary
BursaBytes 11
1000
1100
1200
1400
1500
1300
Inde
x (p
oint
s)
1600
1700
1800
6,000
7,000
8,000
3,000
4,000
1,000
0
2,000
5,000
Volume (units) / Value (RM
)(m
illion)
Jul 8: FBM KLCI closed at a new record high of 1,594.74 points
Jul 7: BNM maintained its OPR at 3% but raised the SRR from 3% to 4%
Aug 10: Markets stabilised after the US Federal Reserve pledged to keep interest rates near zero for another two years
Aug 17: The pace of grow of the Malaysian economy moderated in 2Q2011 to 4%
Sep 19 to Sep 26:Selling pressure as concerns over a worsening Eurozone debt crisis was compounded by a warning from the US Federal Reserve of significant downside risks to the economy, and credit ratings downgrades on three major US banks
Sep 27:Total value surged to RM7.6 billion, contributed mainly by a single direct business transaction valued at RM5.9 billion
Aug 8 and 9: FBM KLCI plunged 1.8% and 1.66% respectively, in line with heavy regional falls, after S&P cut the US credit rating
1-Ju
l
5-Ju
l
7-Ju
l
11-J
ul
13-J
ul
15-J
ul
19-
Jul
21-J
ul
25-J
ul
27-J
ul
29-J
ul
2-A
ug
8-A
ug
12-A
ug
18-A
ug
22-A
ug
4-A
ug
10-A
ug
16-A
ug
24-A
ug
26-A
ug
6-S
ep
12-S
ep
19-S
ep
23-S
ep
2-S
ep
8-S
ep
14-S
ep
21-S
ep
27-S
ep
29-S
ep
DERIVATIVES
DERIVATIVES MARKET SNAPSHOT 3Q 2011
Spot Month Gross Outright Margin Spot Month Back Month Margin Rate (RM) (RM) Spread (RM) Spread (RM)
FCPO New 5/10/2011 6,250 6,000 N/A 500
Previous 6/9/2011 7,250 7,000 N/A 500
Market Demography (FKLI) Category 4Q 10 1Q 10 2Q 11 3Q 11
Foreign Institutions 39% 36% 42% 35%
Domestic Institutions 2% 2% 2% 2%
Domestic Retail 40% 41% 37% 43%
Locals 19% 21% 19% 20%
TOTAL 100% 100% 100% 100%
Market Demography (FCPO) Category 4Q 10 1Q 10 2Q 11 3Q 11
Foreign Institutions 26% 29% 27% 28%
Domestic Institutions 14% 15% 14% 11%
Foreign Retail 0% 0% 0% 1%
Domestic Retail 26% 25% 24% 25%
Locals 32% 31% 35% 35%
Proprietary 2% 0% 0% 0%
TOTAL 100% 100% 100% 100%
Margin Rates
INFORMATION PACKAGE:-For more derivatives information, click on the following:
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DISCLAIMER:Bursa Malaysia does not make any recommendation or endorsement regarding any securities or derivatives products identified in this newsletter. Please seek the advice of professionals, as appropriate, in respect of the evaluation of any specific securities or derivatives product, index, report, opinion, advice or other content. Whilst Bursa Malaysia endeavours to ensure that the contents in this newsletter are accurate, correct or have been obtained from sources believed by Bursa Malaysia to be accurate and reliable, please take notice that all information is provided on an “as is” basis without warranties of any kind and Bursa Malaysia hereby disclaims all expressed, implied and statutory warranties of any kind to the recipient of this newsletter and/or any third party. In no event shall Bursa Malaysia be liable for any claim, howsoever arising, out of or in relation to this newsletter to the recipient of this newsletter and/or to any other third party.
Volume
Open Interest
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