w w w . b u r s a m a l a y s i a . c o m

In June, the Malaysian capital market took the spotlight with the listing of Felda Global Ventures Holdings Berhad, the second largest listing in the world, in 2012, to-date after Facebook. The listing raised a total of RM9.9 billion and drew strong interest from investors who traded a total of 262 million shares on the first trading day. During this quarter, Bursa Malaysia hosted the prestigious Invest Malaysia conference, setting a new tone to positively shape investors’ perception on Malaysia as a key driver of the ASEAN capital market. The focus was on the success story of Malaysia as a nation and the growth of Malaysian PLCs in the ASEAN region and beyond.

Continuing our efforts to create a more facilitative trading environment, the Exchange announced the amendments made to the Securities Commission’s Licensing Handbook on Referral Agent activities, allowing securities and futures brokers to refer their respective clients to one another. In June, Bursa Malaysia introduced the CDS Straight-Through Processing facility for market participants to better manage transactions performed by Central Depository System (CDS) account holders.

In our derivatives space this quarter, Bursa Malaysia launched a revamped options contract based on Malaysia’s composite index futures to provide traders with more hedging, arbitraging and trading choices. This introduction is in line with the growing sophistication of the local derivatives market and trading for the options contract commenced on 21 May 2012. In June, Bursa Malaysia Derivatives announced the easing of restrictions for the setting up of branches and kiosks by futures brokers. This will enable greater retail participation in the derivatives market.

On the regulatory front, the Securities Commission and Bursa Malaysia have been working to finalise the regulatory framework for the introduction of Exchange-Traded Bonds, following the issuance of a consultation paper to seek public feedback in May. The Exchange has also conducted educational programmes for Directors and Senior Executive as part of its continuing efforts to raise the bar for corporate governance among Malaysian PLCs.

If you have any feedback or comments, please email to BursaBytes@bursamalaysia.com.

Issue 2 Vol 4 JUL 2012

Updates from Bursa Malaysia

Note From The Editor

HIGHLIGHTSMarket Highlights

Invest Malaysia 2012 Showcases •Growth of Malaysian Multinationals

Bursa Malaysia Introduces Referral •Agent Activities

Bursa Malaysia Offers Straight-Through •Processing Facility to Enhance CDS Operations

Bursa Malaysia Derivatives Launches •Revamped Options on Index Futures

RegulationIssuance of Consultation Paper for Exchange •Traded Bonds

Half Day Governance Programme Series for •Directors

BursaBytes 1

MARKET HIGHLIGHTS

INVEST MALAYSIA 2012 SHOWCASES GROWTH OF MALAYSIAN MULTINATIONALS

A new tone was set for Invest Malaysia 2012 (IMKL 2012) to positively shape investors’ perspective on Malaysia as a key driver of the ASEAN capital market. Organised by Bursa Malaysia, sponsored by Maybank Kim Eng and supported by MIDA, the 8th Invest Malaysia conference participants were delighted with the record number of nearly 900 fund managers. Total number of delegates in attendance at the 2-day conference was 2,113 with 110 foreign participants from 85 organisations.

488 meeting requests were filled via private business meetings with fund managers over the two days, with a focus on facilitating investment opportunities. 45 Malaysian companies were profiled with an approximate market value of RM490 billion, representing 38% of the total market capitalisation of Bursa Malaysia. This year’s line-up of companies included a wide cross-section showcasing the depth of Bursa Malaysia, including 25% who were new to the Invest Malaysia platform.

Prime Minister Dato’ Sri Mohd Najib Tun Razak kickstarts Invest Malaysia 2012 with his keynote address.

This year’s line-up of companies included a wide cross-section showcasing the depth of Bursa Malaysia, including 25% who were new to the Invest Malaysia platform.

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MARKET HIGHLIGHTS

Prime Minister Dato’ Sri Mohd Najib Tun Razak (left) with moderator, Executive Chairman of PricewaterhouseCoopers Malaysia, Datuk Seri Johan Raslan (right)during their dialogue session.

The sentiment of participants and fund managers at IMKL 2012 was positive, following the announcement by our Prime Minister to set up a Foundation to look into addressing gaps to further develop the capital market.

The two most active Plenary Dialogues were headlined by Dato’ Sri Idris Jala, Chief Executive Officer of Pemandu, and Minister of International Trade and Industry Dato’ Sri Mustapa Mohamed. These sessions addressed investors’ interest in the impact and opportunities of the GTP and ETP as well as Malaysia’s growing role as a multinational marketplace.

Bursa Malaysia also took the opportunity to have a dialogue with key thought leaders and business drivers of Malaysia’s Islamic capital market who were present at the event. During the conversation with the CEOs, the leaders agreed on key areas for innovation and a commitment to re-group was made to follow through on delivering business-led Islamic capital market innovations.

Riding on the strong and positive sentiment towards the Malaysian capital market and growth projection, an Invest Malaysia global series will be rolled out to showcase Malaysia’s corporates to the world.

The packed audience at the Shangri-La Hotel ballroom.

BursaBytes 3

MARKET HIGHLIGHTS

BURSA MALAYSIA INTRODUCES REFERRAL AGENT ACTIVITIES

Securities and futures brokers are now able to refer their respective clients to one another following amendments made to the Securities Commission’s Licensing Handbook allowing for Referral Agent activities.

The amendments, initiated by Bursa Malaysia, will create a more facilitative trading environment and boost the number of participants in both the securities and derivatives markets.

The amendments allow a Participating Organisation (PO), as a holder of the Capital Markets Services License (CMSL), to refer clients to a Trading Participant (TP) of Bursa Malaysia Derivatives, and vice versa.

Furthermore, Dealer’s Representatives (DR) who hold the Capital Markets Services Representative’s License (CMSRL) for dealing in securities may now refer their clients to a TP via their POs, and likewise, Registered Representatives (RR) holding the CMSRL for dealing in derivatives may refer their clients to a PO via their TPs. Referral agents must only undertake the regulated activities they are licensed for and not any other regulated activities.

For further information, please refer to Bursa Malaysia’s circular for POs and TPs.

ELECTRONIC DIVIDEND (EDIVIDEND) PAYMENT UPDATE

Electronic Dividend (eDividend) was implemented in September 2010 to enable dividend payouts to be deposited directly into registered shareholders’ bank account. As at end of April 2012, 60% of active Central Depository System (CDS) account holders have registered for eDividend. In terms of the value of funds going through the eDividend payment channel, it currently stands at 80% of the total payment by listed issuers.

As part of Bursa Malaysia’s ongoing efforts to increase the percentage of investors registering for eDividend, Bursa Malaysia Depository has recently extended the period for the waiver of administrative fee for eDividend registration until 18 April 2013. Investors are encouraged to register for eDividend before this period lapse to avoid being charged an administrative fee of RM10.

Shareholders attending companies’ Annual General Meetings can look for a special desk set-up by Bursa Malaysia Depository to register for eDividend. In the third quarter of 2012, Bursa Malaysia Depository aims to extend eDividend to include other types of cash distributions, such as interest payment, cash distribution and capital repayment. Bursa Malaysia is also working closely with Authorised Depository Agents to promote eDividend to clients who have yet to register.

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MARKET HIGHLIGHTS

Bursa Malaysia has introduced the CDS Straight-Through Processing (CDS-STP) facility for its market participants to better manage transactions performed by Central Depository System (CDS) account holders.

With the rolling-out of the first phase of the CDS-STP service, subscribing brokers are be able to receive regular updates of their clients’ CDS account balances. This enables clients, especially those who trade through the internet, to keep abreast of their updated CDS account balances, thus minimising the risk of overselling their positions. Subscribing brokers need to obtain their clients’ written consent to receive CDS account balances from Bursa Malaysia under this phase.

The introduction of CDS-STP is aimed at enhancing the overall efficiency of CDS operations in the industry as it is able to handle high volumes of transactions at increased speed and accuracy. This will reduce operational risks and data entry errors, as well as enhance the interface connectivity between the back offices of market participants and the CDS operations of Bursa Malaysia. Investors will benefit by having access to timely and updated information on their CDS account balances, while market participants will be able to achieve greater efficiency in their back office operations.

Additionally, under this phase market participants will be provided with information on all securities listed on Bursa Malaysia, which includes details such as stock name, stock code, stock short name, date listed, ISIN code, stock type, board lot size, par value and share registrar’s information and subsequent updates to these details.

Bursa Malaysia expects to fully implement the CDS-STP by the end of the year to allow market participants to receive intraday updates on the changes in shareholding positions as well as to automate data entry on selected CDS transactions. The full-fledged CDS-STP service will reduce manual data-entry, shorten turnaround times and facilitate faster data capturing for market participants’ back office operations.

BURSA MALAYSIA OFFERS STRAIGHT-THROUGH PROCESSING FACILITY TO ENHANCE CDS OPERATIONS

On 8th June 2012, Bursa Malaysia Derivatives Berhad announced the easing of restrictions for the setting up of branches and kiosks by futures brokers, paving the way for greater retail participation in the derivatives market.

Futures brokers will be allowed to open a combination of up to ten branches and/or kiosks (with a maximum of five branches) per year in the first and second year of operations, subject to the relevant regulatory changes.

There will be no limit to the number of branches and kiosks they can set up from the third year onwards. Futures brokers wishing to set up branches and kiosks need to have a minimum paid-up capital of 10 million ringgit.

BURSA MALAYSIA DERIVATIVES EASES RESTRICTION ON ESTABLISHMENT OF BRANCHES/KIOSKS FOR FUTURES BROKERS

BursaBytes 5

MARKET HIGHLIGHTS

BURSA MALAYSIA DERIVATIVES LAUNCHES REVAMPED OPTIONS ON INDEX FUTURES

Bursa Malaysia Derivatives Berhad (BMD) has launched a revamped options contract based on Malaysia’s composite index futures (FKLI) to complement the index futures market and to provide traders with more hedging, arbitraging and trading choices. Trading of the options contract (OKLI) commenced on 21 May 2012.

The original OKLI, launched in December 2000, was the first exchange-traded options contract in Malaysia and used the FBM KLCI cash index as its underlying instrument. The underlying instrument was replaced with the FBM KLCI futures (FKLI) in order to facilitate more efficient hedging with futures. The revamped OKLI is listed and traded on the CME Globex electronic trading platform as part of the partnership with CME Group.

Bursa Malaysia has embarked on awareness and educational programmes to highlight the benefits of options trading and its opportunities to market participants and members of the public.

Underlying FBM KLCI Futures (FKLI) Type European Style Contract Size One FKLI contract Tick Size 0.1 index point valued at RM5 Contract Month

Spot month, the next month and the next two calendar quarterly months. The calendar quarterly months are March, June, September and December.

Trading Hours First trading session: Malaysian 8:45 a.m. to 12:45 p.m. Second trading session: Malaysian 2:30 p.m. to 5:15 p.m.

Last Trading Day

The last market day of the contract month.

Exercise Price Interval

At least 13 exercise prices (6 are in-the-money, 1 is at-the-money and 6 are out-of-the-money) shall be set at interval of 10 index points for the spot and next month contracts. At least 7 exercise prices (3 are in-the-money, 1 is at-the-money and 3 are out-of-the-money) shall be set at interval of 20 index points for the next 2 quarterly month contracts.

Settlement of Option Exercise

In the absence of contrary instructions delivered to the Clearing House, an option that is in-the money at expiration shall be automatically exercised. Exercise results in a long FKLI position, which corresponds with the option’s contract month for a call buyer or a put seller, and a short FKLI position for a put buyer or a call seller. The resultant positions in FKLI shall then be cash-settled based on the final settlement value of FKLI.

Speculative Position Limit

10,000 FKLI-equivalent contracts (a combination of OKLI and FKLI contract), net on the same side of the market in all contract months combined.

 

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REGULATION

2012 EDUCATION PROGRAMME FOR DEALER REPRESENTATIVES

We continued with our Dealer Representatives (DRs) Education Programme for 2012 with the objective of enhancing the understanding as well as to update DRs on the application and practices of the rules that relate to them. The new programme is entitled ‘Trading Responsibly - The role of Dealers’ Representative’.

Six sessions are scheduled for 2012 covering major cities including Kuala Lumpur, Johor Baharu, Penang, Kota Kinabalu and Kuching. The first two sessions, held in Kuala Lumpur and Johor Bahru on 9 June and 23 June 2012 respectively, received an overwhelming response from DRs. The education programme for the DRs is accredited 10 CPE points by the Securities Industry Development Corporation (SIDC) under its ‘Continuing Professional Education’ (CPE) scheme.

On 4 May 2012, Bursa Malaysia published a consultation paper seeking public feedback on proposals aimed at facilitating the listing and quotation or trading of sukuk and bonds issued by the Malaysian government, local and foreign corporations on the stock exchange.

The introduction of the Exchange Traded Bonds (ETB) initiative is in line with one of Bursa Malaysia’s strategic priorities to offer a diverse range of tradable products on the Exchange, and to elevate the bourse to be the leading marketplace in Asia.

The Consultation Paper set out the proposed amendments to the Bursa Malaysia Securities Berhad Main Market Listing Requirements relating to the admission and post-listing obligations of an issuer of ETB for public comment. Additionally, the Exchange has also included in the consultation paper for public feedback, proposed consequential amendments to the Rules of Bursa Malaysia Securities Berhad, Rules of Bursa Malaysia Depository Sdn Bhd and Rules of Bursa Malaysia Securities Clearing Sdn Bhd to facilitate the ETB framework.

The Consultation Paper closed on 18 May 2012 and a total of 25 responses were received from the public. The responses received from banks, industry associations, public listed corporations and individuals were generally positive to the proposals.

Currently both the Securities Commission and Bursa Malaysia are working towards finalising the regulatory framework of ETB.

ISSUANCE OF CONSULTATION PAPER FOR EXCHANGE TRADED BONDS

REGULATION

Malaysia’s journey to better corporate governance has continued with unabated vigour. Sporadic scandals in Malaysia and abroad serve as a timely reminder to corporate Malaysia that it must continue to intensify its efforts in this space. To further our agenda of enhancing the standards of corporate governance amongst public listed companies, we introduced the Half Day Governance Programmes series for directors of listed issuers last year.

Following the success of the series, the Exchange is continuing this year’s series as part of its efforts to enhance directors’ awareness of current trends, developments and issues relating to corporate governance practices.

Driven in part by the complexity of the business environment and regulatory developments, boards are increasingly expected to develop their knowledge and skills to enable them to discharge their responsibilities effectively. These governance series will provide an excellent platform for directors to discuss and share significant governance concerns, leading practices and emerging directors’ issues.

This year, the governance series will consist of nine sessions and will be held in collaboration with industry organisations, namely the Malaysian Institute of Accountant, Institute of Internal Auditors Malaysia, Malaysian Alliance of Corporate Directors, Malaysian Shareholders Watchdog Group, Malaysian Institute of Chartered Secretaries and Administrators, Association of Chartered Certified Accountants, Malaysian Institute of Integrity and Malaysian Institute of Corporate Governance.

The first governance programme for the series titled “Role of Audit Committee in Assuring Audit Quality” was held on 22 May 2012, in collaboration with the Malaysian Institute of Accountants.

HALF DAY GOVERNANCE PROGRAMME SERIES FOR DIRECTORS

BursaBytes 7

The audience listening to the first governance programme at the Conference Room of Bursa Malaysia.

REGULATION

We continued our advocacy sessions on disclosure for Chief Executive Officers and Chief Financial Officers in the second quarter of 2012. The advocacy session was organised in conjunction with the issuance of the Corporate Disclosure Guide and changes to the Listing Requirements last year in respect of the enhanced disclosure requirements in the quarterly financial reports and annual reports.

The advocacy session is part of our efforts to enhance awareness in relation to corporate disclosure obligations and to promote high level of corporate disclosure practices among our listed issuers. Since the launch of the Corporate Disclosure Guide last year, nine advocacy sessions have been conducted with another three more advocacy sessions planned for the remainder of this year.

ADVOCACY SESSIONS ON DISCLOSURE FOR CHIEF EXECUTIVE OFFICERS AND CHIEF FINANCIAL OFFICERS

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From left: Tan Sri Datuk Dr Abdul Samad Haji Alias (Independent Non-Executive Director, Bursa Malaysia), Mr Eugene Wong Weng Soon (Executive Director, Corporate Finance & Investments, Securities Commission), Mr Abdul Rahim Abdul Hamid (Vice President, Malaysian Institute of Accountants), Mr Ong Ching Chuan (Partner, PricewaterhouseCoopers).

The participants were privy to a lively session with panel members sharing their respective views and challenges on the subject matter from the perspectives of a regulator, auditor and director. Close to 230 directors and senior management attended the session.

SECURITIES MARKET SNAPSHOT 2Q 2012Indices 2Q 2012 1Q 2012FTSE 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 2Q 2012 1Q 2012Market 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

SECURITIES

1,599.1510,742.9710,917.644,354.70

17,822.8319,178.5821,120.9411,853.0511,003.17

26.81,368

76721.196911.463

92715

4016

14018

11.315

103,053

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1,596.3310,746.4410,939.63

4,583.8418,281.5221,674.3223,070.7811,530.6110,816.23

34.41,355

1191151.9

1161091.859

93915

3362

1274

2.611

30,803

18.5%  

18.1%  

18.1%   21.2%  

21.6%  

24.2%  

26.2%  

21.3%  

20.4%  

21.9%  

22.7%  

2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011  As  at  year  end  

22.1%  

21.6%  

22.2%   22.2%  

22.4%  

22.7%  

22.4%  22.5%  

22.8%  23.0%  

23.1%  

22.8%  

Jul-­‐11  

Aug-­‐11  

Sep-­‐11  

Oct-­‐11  

Nov-­‐11  

Dec-­‐11  

Jan-­‐12  

Feb-­‐12  

Mar-­‐12  

Apr-­‐12  

May-­‐12  

Jun-­‐12  

As  at  month  end    

INFORMATION

We also offer a wide range of products and services for our investing public. To learn more, kindly click on the following:

• IPO Summary

• Historical Information

• Bursa Station

DAILY MARKET TREND: FBMKLCI AND MARKET VELOCITY

DAILY MARKET TREND: MARKET CAPITALISATION, TOTAL VOLUME AND VALUE

SECURITIES

10 BursaBytes

DERIVATIVES

DERIVATIVES MARKET SNAPSHOT 2Q 2012

Margin Rates

INFORMATIONFor more derivatives information, click on the following:

• Products • Market Statistics • Circulars

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.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Jan-

11

Feb-

11

Mar

-11

Apr-1

1

May

-11

Jun-

11

Jul-1

1

Aug-

11

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11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

Feb-

12

Mar

-12

Apr-1

2

May

-12

Jun-

12

KLCI Futures Crude Palm Oil Futures Exchange Total

Volume

0 20,000 40,000 60,000 80,000

100,000 120,000 140,000 160,000 180,000 200,000

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11

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-11

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Jul-1

1

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Dec

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12

Mar

-12

Apr

-12

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-12

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12

KLCI Futures Crude Palm Oil Futures Exchange Total

Open Interest

BursaBytes 11

Combined Commodity

SPAN Price Scan Range

(RM)

SPAN Volatility Scan Range

(%)

Spot Month Charge (RM)

Spot Month Spread

(RM/pair)

Back Month Spread

(RM/pair)

Short Option Minimum (RM)

New 21/5/2012 4,000 2 - 350 300 50Previous 13/2/2012 4,000 N/A N/A 200 150 N/ANew 21/5/2012 6,000 - 250 - 1,000 50Previous 13/2/2012 6,000 N/A 250 N/A 500 N/A

KLI

CPO