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BURSA MALAYSIA AIMS TO LAUNCH SINGLE STOCK FUTURES ON 28 APRIL 2006.
BackApr 15, 2006
15 Apr 2006
BURSA MALAYSIA AIMS TO LAUNCH SINGLE STOCK FUTURES ON 28 APRIL 2006
Bursa Malaysia Berhad (Bursa Malaysia) is targeting to launch the first tranche of Single Stock Futures (SSFs) on 28 April 2006. The initial ten SSFs to begin trading on launch day are:
| No. | Short Name | Company Name | Stock Code |
|---|---|---|---|
| 1. | FBRS | Bursa Malaysia Bhd | 1818 |
| 2. | FAIR | AirAsia Bhd | 5099 |
| 3. | FAMM | AMMB Holdings Bhd | 1015 |
| 4. | FBST | Berjaya Sports Toto Bhd | 1562 |
| 5. | FGEN | Genting Bhd | 3182 |
| 6. | FIOI | IOI Corporation Bhd | 1961 |
| 7. | FMAX | Maxis Communications Bhd | 5051 |
| 8. | FRHB | RHB Capital Bhd | 1066 |
| 9. | FSGB | SCOMI Group Bhd | 7158 |
| 10. | FTEL | Telekom Malaysia Bhd | 4863 |
Bursa Malaysia's Chief Operating Officer, Omar Merican said, "The addition of Single Stock Futures to Bursa Malaysia's product spectrum is significant as it facilitates price discovery, provides an additional risk management tool for investors and also gives investors a lower cost and easier means for entering the market."
The ten initial SSFs form part of a list of 42 stocks shortlisted for SSFs. The list was selected based on the Structured Warrants guideline. The underlying company must have an average daily market capitalisation of at least RM1 billion in the past three months ending on the last business day of the calendar month immediately preceding the date of issue.
In addressing the risks associated with SSF trades, Omar said, "The addition of SSFs is of course not without risk. Like with any other product, we advise investors to trade prudently, actively monitor their positions and additionally place stop-loss orders to minimise potential losses.
"From the exchange's viewpoint, we believe the hedging capabilities SSFs offer will give investors more options for risk management. As a measure against unfair trade, we have also carefully selected highly liquid stocks as the underlying equities to mitigate manipulative play."& amp; amp; amp; lt; /p>
To encourage market uptake of SSFs Bursa Malaysia will waive exchange and clearing fees for the initial three months from the initial launch date. Data feed fees for information vendors will also be waived for the first twelve months following the same date.
SSFs are based on contact units of 1,000 shares per unit and contract values are derived by multiplying the stock price by the contract unit.
Initial Margins for SSFs are collected for each open position and futures brokers will ? mark-to-market' or revalue their clients' SSF portfolios at the end of each business day based on settlement prices determined by Bursa Malaysia. Accounts must be replenished within a stipulated timeframe should a client's position generate a loss. Conversely, clients can also withdraw excess funds from their trading accounts should their positions result in profits.
Exchange fees for SSFs are based on a three-tiered structure whilst clearing fees are fixed at RM1.00 per side per contract.