What is the Kuala Lumpur Stock Exchange?

Patrick Lynch

The Kuala Lumpur Stock Exchange is the official stock market of Malaysia. It is a fully integrated exchange when means it offers everything that one would expect from an exchange-related service including trading and clearing services. It is publicly floated and has its headquarters on the 15th floor of Exchange Square in Kuala Lumpur.

The stock market of Malaysia is called the Kuala Lumpur Stock Exchange.
The stock market of Malaysia is called the Kuala Lumpur Stock Exchange.

It is important to note that the Kuala Lumpur Stock Exchange is no longer referred to by that name. In 2004, it was renamed the Bursa Malaysia Berhad after the Demutualization Act of the same year caused the stock exchange to become a public company. The stock exchange’s roots date back to 1930 when the Singapore Stockbroker’s Association was formed with its sole intention being to deal in securities in Malaysia, which was known as Malaya at that time.

The Malayan Stock Exchange was formed in 1960 and began trading shares publicly. This was followed by the formation of the Malaysian Stock Exchange in 1964 and finally the Kuala Lumpur Stock Exchange in 1973. This came as a result of Singapore and Malaysia ending their currency link. The stock exchange then became incorporated in 1976 and was considered to be the official stock market of Malaysia.

In 2005, the Kuala Lumpur Stock Exchange came up with an initiative which enabled investors to access free research reports of any company listed on the exchange. This openness was a great boost to investors who no longer had to invest blindly. This access was known as CMDF-Bursa Research Scheme (CBRS) and was designed to generate extra interest in stocks and ensure liquidity.

The following year, the Kuala Lumpur Stock Exchange teamed up with Britain’s main stock market, FTSE, to create the FTSE Bursa Malaysia Index. It is a means of calculating real time indices and covers every company involved in the Bursa Malaysia Main Board. It is designed to keep a close watch on the performance of the major companies on the market. It achieves this by calculating all tradable indices every 15 seconds with benchmark indices being calculated once per minute.

Although the Kuala Lumpur Stock Exchange has been relatively successful, there have been a few scares and glitches along the way. It has not escaped the global economic recession and was hit with a 10% fall in March 2008 as domestic matters — such as a general election dominated by allegations of fraud and foreign influences like the U.S. mortgage crisis — caused panic. This resulted in the market being suspended for an hour in order to calm the situation down. The market shut down again in July 2008 when various hardware glitches manifested themselves, thereby affecting the equity market. The errors were fixed, and trading resumed as normal the following day.

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