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Investor Relations

News

BURSA TO DISCONTINUE INDEX BASE ADJUSTMENT FOR DIVIDENDS.

BackMay 31, 2005

31 May 2005
BURSA MALAYSIA'S NEW TRADING PLATFORM TO ENHANCE LIQUIDITY, TRADING EFFICIENCY AND QUALITY OF MARKET SURVEILLANCE

Bursa Malaysia Berhad's (Bursa Malaysia) new trading platform will provide enhanced capabilities for the exchange to encourage better market liquidity and velocity, increase trading efficiency and quality of market surveillance.

"The common trading engine project is more than just the implementation of an IT system," said Fathi Ridzuan Ahmad Fauzi, Head, Exchanges, Bursa Malaysia Berhad. "It is in fact a change in our trading model, a dramatic transformation in the way the exchange will operate moving forward. It is also a change in the way investors will trade in the market, where new features will be introduced to benefit investors."

"The new trading platform also underpins all three of Bursa Malaysia's strategic priorities, that is, boosting velocity and liquidity, broadening our product offerings and achieving better operational scale and efficiency. In addition, it also enhances quality of market supervision," said Fathi.

The new trading platform will be rolled out in four phases:

  • Phase 1a: Derivatives
  • Phase 1b: Equities
  • Phase 1c: Offer open API option
  • Phase 2: Clearing

Phase 1a for the derivatives market is scheduled to be operational by June or July 2005 and Phase 1b for the equities market is scheduled to be operational by end of the year.

Some of the platform's key features include the introduction of the Theoretical Opening Price (TOP) that will allow investors to better understand supply and demand and gauge the market and price to be traded before the market opens. This will be particularly useful during IPO's.

Continuous matching will replace the current 10 seconds matching, which should allow for faster matching of trades and improve the liquidity of the market. This will also align the exchange with the practices of major international exchanges.

The new trading platform includes ARAMIS - a new system that is slated to improve the exchange's market surveillance capabilities by providing greater transparency of trades. Fathi said, "We are studying the possibility of introducing dynamic limits in the equities market in addition to the current static limits of 30% up and 30% down. Dynamic limits will allow the market to move more gradually and reduce possible manipulations."

The dissemination of trading information will also be enhanced where the depth will be increased from 3 to 5 in the equities market.

The system purchased by Bursa is from Atos Euronext of France, and is also used in 17 other exchanges around the world.