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Kuala Lumpur Stock Exchange (KLSE) Definition

What Is the Kuala Lumpur Inventory Exchange (KLSE)?

The Kuala Lumpur Stock Exchange (KLSE) is the former name of a Malaysian stock exchange located in the super city of Kuala Lumpur. The KLSE dates back to 1930 and was specifically created to allow the trading of Malaysian safe keepings. The exchange went through several name changes over the years but is now known as Bursa Malaysia.

KLSE is one of the largest the markets in the Association of Southeast Asian Nations (ASEAN), allowing traders to trade equities, exchange traded funds (ETFs), offshore Islamic assets, and other protections.

Key Takeaways

  • The Kuala Lumpur Stock Exchange is a Malaysian stock exchange now known as Bursa Malaysia.
  • It is one of the largest returns in the Association of Southeast Asian Nations and is fully automated.
  • Equities, exchange traded funds, offshore Islamic assets, and other confidences are listed on the exchange.
  • The exchange’s main index is the FTSE Bursa Malaysia KLCI, which is composed of the top 30 assemblages on the Bursa Malaysia Exchange.

Understanding the Kuala Lumpur Stock Exchange (KLSE)

As noted above, the Kuala Lumpur Store Exchange is now known as Bursa Malaysia. The exchange is fully integrated and offers clearing, trading, listing, depository, and arrangement services. It has a fully automated trading system which launched in late 2008.

According to the exchange’s website, 900 fellowships are able to use it to raise capital through a number of different economic activities. Its main index is the Kuala Lumpur Composite Key (KLCI), now known as FTSE Bursa Malaysia KLCI, which is composed of the top 30 companies on the Bursa Malaysia Stock Exchange.

A number of different financial securities trade on Bursa Malaysia, including equities, bonds, derivatives, exchange-traded outputs (ETPs), and real estate investment trusts (REITs). There’s also an Islamic market team that ballyhooes Shariah-compliant capital markets to cater to the nation’s Muslim majority. This market includes domestic and offshore Islamic assets as in fine as Islamic banking, the Shari’ah-compliant trading platform that was launched in 2009.

Companies that want to list on the switch have three options available including the main or prime market for large, established corporations, as well as the ACE call for companies that have the potential for growth. The final option is known as the LEAP market, which is meant for up-and-coming small- and mid-sized gatherings.

Bursa Malaysia also works with other global corporations and exchanges to promote performance and transparency in far-reaching capital markets. For instance, it entered into a partnership with the Chicago Mercantile Exchange (CME) to offer derivatives. This concordat is valid until 2025.

If you want to invest in the Malaysian market, consider a mutual fund, exchange traded fund, or an American depositary acceptance.

Special Considerations

Traders are only able to short-sell equity-based exchange traded funds, but that may change in the tomorrow. In July 2018, Bursa Malaysia released a consultation paper that sought public comment on a proposed addition related to ETFs. This call comes after a task force on ETFs, which included the Securities Commission Malaysia (SC), Bursa Malaysia, and other sell participants made recommendations aimed at expanding investor interest in ETFs. Recommendations from the task force desired including ETFs, such as:

  • Futures-based ETFs
  • Leveraged ETFs
  • Inverse ETFs
  • Physically backed commodity ETFs
  • Ersatz ETFs

In service of these goals, the rule changes would loosen regulations on the short-selling framework to allow divers short-selling types of ETF units.

History of the Kuala Lumpur Stock Exchange (KLSE)

The exchange dates back to 1930, when it was decreed as the Singapore Stockbrokers’ Association. This was the first securities business developed in the Southeast Asian nation. It went into done with a series of name changes including the Malayan Stock Exchange and the Stock Exchange of Malaysia. Securities trading to the exposed began in 1960 and the exchange was incorporated as a company in 1976.

In a move to become more customer-focused, the exchange demutualized in 2004. With demutualization, a work that has member ownership converts into one that has shareholders. With this change in ownership structure, the personage changed to Bursa Malaysia.

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