How to buy shares in Malaysia and open a Malaysian brokerage account

If you’re Malaysian and new to investing, you’re probably wondering how to buy shares in Malaysia and open a Malaysian brokerage account. Or you could be a foreigner who wants to invest directly through a Malaysian brokerage firm and you’re thinking about which Malaysian brokerage to go with.

In either case, it’s important to pick a brokerage firm that suits your individual needs and preferences. As a value investor and Malaysian myself, here are six things I consider when I choose to how to buy shares in Malaysia and open a Malaysian brokerage account.

6 things to consider when opening a brokerage account in Malaysia

1. CDS vs. nominee account

Let me explain the difference between a CDS account and a nominee account:

Before you open a brokerage account with a Malaysian broker, you first need to open a Central Depository System (CDS) account. A brokerage account allows you to trade shares through your broker. A CDS account records the ownership of Malaysian securities (i.e. stocks listed on Bursa Malaysia).

For example, you could have a brokerage account with both Maybank and CIMB, and you buy Stock A through Maybank and Stock B through CIMB. Even though you buy two different stocks via two different brokerages, you are listed as the direct owner of both stocks in your individual CDS account. As the direct owner, you enjoy certain rights as a shareholder which includes voting rights and the right to attend AGMs/EGMs.

For trust (nominee) accounts, Malaysian brokerages will use them to buy foreign shares on your behalf. For example, as a Malaysian, I can buy Singapore Exchange (SGX) shares through my Malaysian brokerage who will then place those shares in a nominee account assigned to me. As I don’t have a CDP account in Singapore (equivalent to the CDS account in Malaysia), I am not the direct owner of the shares in Singapore. In this case, I don’t get to vote or have the right to attend AGMs/EGMs for my Singapore stocks. But I’ll still continue to enjoy basic rights as a shareholder like receiving dividends and the option to subscribe to rights issue.

2. Market access

This is important to me as I invest both Bursa Malaysia (local) and SGX (foreign) shares. As such, I need a brokerage with the facilities to execute transactions for both local and foreign shares.

Besides Singapore, I may also be interested in stocks listed in Thailand, Hong Kong, Australia, Canada, and the United States. However, if you are only into local Malaysian stocks, then a brokerage which simply serves the local market will suffice.

3. Types of investment products

In general, all brokerage firms in Malaysia are more or less similar in their service offerings. You are able to trade ordinary shares, preference shares, warrants, exchange traded funds (ETFs), exchange traded bonds and sukuk (ETBS), business trusts, stapled securities, and real estate investment trusts (REITs) listed on Bursa Malaysia. (Here’s a list of 11 Malaysian REITs that made money if you invested from their IPOs.)

As I write, options trading is not available on Bursa Malaysia. As for futures and derivatives trading, these activities are managed under Bursa Derivatives which is presently owned by Bursa Malaysia.

4. Role of a stockbroker

Personally, I’m a value investor who buys and accumulates good stocks at cheap prices over the long term. Why is this important when choosing a stockbroker? Because I believe it is important to set your personal investment goals and objectives before settling on a stockbroker.

To me, the role of a stockbroker is to help me complete the execution of my trades. It is not to provide me with stock tips, recommendations to buy/hold/sell any stock at any time. This is important because we must understand that the interests of your stockbroker may be different from yours. Ultimately, you want a stockbroker that follows your investment objective. If he understands that you’re a medium/long-term investor, he shouldn’t be calling you to offer with hot tips which do not help your investment objectives.

5. Offline/online access

To me, I prefer online access over offline. It’s easy, convenient, and a lot cheaper. These days, trading platforms are designed in such a way that it is easy for you to trade stocks even if you are not an IT-savvy person. It is harder for you to make a mistake.

With that said, if you are unsure about any features on your brokerage’s trading platform, you can always call or WhatsApp your stockbroker for help. Thus, the key is to find a helpful stockbroker or trading representative. I also prefer if a brokerage firm has an office nearby, so it is convenient for me you make a trip down if ever require.

6. Brokerage fees

Below is a list of Malaysian brokerage firms and their minimum transactions fees for trading Bursa Malaysia shares:

BrokerageUp to RM100KAbove RM100KMinimum Fees
Rakuten Trade0.1%Flat RM100RM7
UOB Kay Hian0.1%0.1%RM8
Hong Leong0.1060%-0.4028%0.1060%-0.1908%RM8.48
Jupiter Securities0.2%0.2%RM10
Maybank0.42%0.42%RM12
Public Bank0.42%0.21%RM12
Alliance Bank0.15%-0.29%0.15%RM12
Mercury Securities0.42%0.21%RM12
AmInvestment Bank0.40%0.20%RM28
RHB Invest0.42%0.21%RM28
SJ Securities0.42%0.35%RM28
Affin Hwang 0.60%0.60%RM28
Apex eTrade0.60%0.60%RM28
TA Enterprise0.49%0.42%RM28
Kenanga (KenTrade)0.42%0.21%RM28
iTrade@CIMB0.45%0.22%RM29.68

At the moment, Rakuten Trade and Mercury Securities do not offer facilities to trade foreign shares.

What’s the next step?

The next step is to choose a brokerage firm, head down to their office, and have a representative help you open a CDS account (if you don’t already have one) and a new brokerage account. They will help complete the entire process for you.

Hopefully, I have given you some clear directions on how to buy shares in Malaysia and open a Malaysian brokerage account. If you have any questions I could help with, simply ask in the comments below and I’ll be glad to share what I know.

Happy investing! 🙂

Ian Tai is the founder of Bursa King, a data platform that empowers retail investors to build wealth through ownership of fundamentally solid stocks. It is an essential tool that helps investors unearth consistently profitable stocks from a database of over 900+ stocks listed in Malaysia. As a Malaysian with close family ties in Singapore, Ian publishes a series of newsletters on how anyone can invest profitability in both countries.

29 Comments

  1. HT WANG

    January 23, 2018 at 6:32 pm

    Thanks for sharing.
    Just would like to check if a Singaporean without Malaysia residential address can open a Broker account and CDS account in Malaysia? If yes, where will be the annual report sent? As don’t think they can post it overseas. Thanks.

    • Ian Tai

      January 25, 2018 at 3:56 pm

      Hi HT

      Singaporeans are welcome to open a stock brokerage account in Malaysia. The requirement is to have your Passport, Letter of Employment/Educational Institution in Malaysia, and Working/Student Permit in Malaysia. So, if you are not working in Malaysia, I don’t think you can open a local bank account in Malaysia.

      These days, you don’t need to wait for annual reports to be delivered to your doorstep. You can obtain it from the official website of Bursa Malaysia or from the corporate website of the respective stock. If the stock has a lousy website, that tells us something about the stock, right?

      Regards
      Ian

  2. Piggy

    January 24, 2018 at 1:52 pm

    Hi would like to know if non Malaysian / Singaporean can open a brokerage account in Malaysia? As you put UOB Kay Hian, so I presume can set up the account in Singapore at UOBKH?

    • Ian Tai

      January 25, 2018 at 4:00 pm

      Hi Piggy

      You may refer to the reply above (comments posted by HT as he asked the same question). I’m not familiar with UOB Kay Hian. But, suffice to say, I believe you need a bank account in Malaysia to do online trading for stocks listed on Bursa Malaysia as it allows transactions to be settled in RM. I think, you may need to come over to UOB Kay Hian Malaysia to open a local stock brokerage account in Malaysia.

      Regards
      Ian

  3. Ali

    January 24, 2018 at 5:25 pm

    good article. adding some points here.
    The nominee account need to pay the service fee for corporate action (rights issue), also every dividend received broker will has some charge. if you just has small amount of dividend, then may end up all or half of dividend gone.

    • Ian Tai

      January 25, 2018 at 4:02 pm

      Hi Ali

      Thanks for your contribution. Much appreciated.

      Regards
      Ian

  4. Sarah

    January 30, 2018 at 5:02 pm

    Hi Ian, thanks for the informative article. Just wondering why you didn’t mention about M+ online broker. I am new to this but I heard that M+ is a broker as well and their fees are relatively lower. What are your honest thoughts on this? Would really appreciate your views for a newbie for me to learn more about the different brokerage firms in Malaysia.

    • Ian Tai

      January 31, 2018 at 1:11 pm

      Hi Sarah

      I had a look and found that M+ rates are set at 0.05% (cheap) or a minimum of RM 8 (cheap) per contract. If you are a Malaysian, you may consider their services as they are cheap.

      Personally, I use Maybank Investment Bank (Maybank IB) as I’m already a Maybank customer. Thus, I find it convenient to transfer funds from my bank account to my stock account. For me, as long as the cost is comparable and the service is good, I’m happy to use the same broker over the long-term.

      Regards
      Ian

  5. Babak

    February 12, 2018 at 5:16 pm

    Hi Lan ,

    Thank you for your article, I’m a foreigner working in Malaysia and already have a Maybank Account, how can i Use Maybank IB to start trading in Malaysia stock Market? can i open a CDS account online using Maybank Account ?

    • Ian Tai

      February 16, 2018 at 1:40 pm

      Hi Babak

      If you have a Maybank account, I think you can just walk-in to any Maybank IB branch to open your CDS account. You can’t open it online.

  6. Alexander

    February 17, 2018 at 8:31 pm

    Hi Ian, I’m a local student keen to try my hand at investing. I presently have a Maybank savings account.
    1) How much is the bare minimum you would recommend to start an investment account and begin trading? Is there a strategy beginners can use to start making profits that doesn’t lead to most of my funds being eaten up through fees?
    2) What instruments do you personally prefer trading? Shares, bonds, derivatives, or?
    3) What is your experience with investment trading outside Malaysia, with foreign shares/instruments? If I wanted to trade on the NYSE, how would I go about doing that?
    4) From the above comments, I see you have a Maybank IB account. Do they have a good reputation for generating higher returns? Do you have some kind of ranking of these brokerages that can compare their fees with their average returns, to evaluate best value?
    5) You talk about picking the right broker. Wouldn’t the brokerage assign you a broker, or do you get a say? How could you get to know brokers to make a judgement for your selection?

    • Ian Tai

      February 21, 2018 at 12:40 am

      Hi Alex

      Thanks for the boatload of questions. Glad to have them. Here are my thoughts about them:

      1. If you are based in Malaysia and are new to stock investing, you may first attempt to build a prototype or mini-version of a portfolio. I think, for a start, a good transaction size would be around RM 1,500 – RM 2,000 per stock.

      2. Yes, there is a strategy beginners can use to start making profits in the first three months of stock investing where you would earn back the fees incurred. It’s called income investing.

      3. I don’t trade. I invest for dividend income.

      4. It’s not the Maybank IB account that generates the returns. The ones that generate returns are the stocks themselves. Also, it’s not about whether the stock is listed in Malaysia, Singapore, or the United States. Regardless of their location, the key for investing is to find stocks that grow profits consistently. They are found in all three countries mentioned above.

      5. I use online brokerage platform by Maybank IB. It’s easy to use. But, for SGX-stocks, I have staff from Maybank IB to assist my transactions.

      6. It’s great to start investing or exploring it at a young age. It gives you a headstart. Here’s a golden nugget. From your questions, I realized that the focus is on what products (stocks, bonds or derivatives), which market and which brokers to go to. I think, it would be helpful to share with you that the focus should be switched to enhancing your investment skills first before investing. For instance, let me ask: ‘Do you know how to read annual reports / financial statements?’ If you don’t, then, even if you have a stock brokerage account, you most likely wouldn’t be able to profit consistently from stock investing as you couldn’t tell which stock is good and which is not good.

      7. I’m not sure about your age. But, if I’m in college and I don’t know how to read financial statements, I would learn how to do so as I have time on my side. Skills like this can reap handsomely over the long-run. Many treated stocks like casino where shares are purchased like lottery tickets as they are short-sighted with gains that are short-term. Of course, I don’t expect everyone to enrol themselves into accounting courses like ACCA which I did. But, you can start with heading libraries or bookstores for good investing books or read stuff posted on the Fifth Person.

      8. In fact, you wish to learn more about income investing. I think, the Fifth Person is coming out with their online course known as Dividend Machines. The course is simple where contents are easy to digest, filled with common sense that enables you to get stock investing right from the start. I think, if you apply what they teach, you would save yourself a lot of dumb mistakes that a lot of people made when trying to make money in the stock market. But, with that said, it’s common today that ‘common sense is not really that common.’

      In short, pursue wisdom (knowledge + skills + education) first over ‘trying your hand’ in the stock market. Who knows … One fine day, I might instead be learning from you, the stock investing guru of the future.

      All the Best!

      • susan

        February 23, 2018 at 2:59 pm

        Hi,

        Regarding – 3. I don’t trade. I invest for dividend income.

        Atually i always confuse the different about trade with invest for dividend income. Could you explain more?

  7. Susan

    February 17, 2018 at 11:29 pm

    Hi,
    May I know that CDS account just can trade to local Malaysia shares only?how about Foreign shares like US?

    • Ian Tai

      February 21, 2018 at 12:46 am

      Hi Susan

      It depends on the stock broker. For instance, when I open a global trading account with Maybank IB, I can invest in stocks listed in Singapore, Hong Kong, the United States, Thailand, Indonesia, Japan, South Korea, Taiwan, Australia, Canada, the United Kingdom.

      So, it’s just a matter of shopping around to see which broker has access for you to invest in stocks listed in the United States.

      • susan

        February 23, 2018 at 2:54 pm

        thanks a lot.thumb up

  8. Darren

    April 5, 2018 at 9:08 pm

    I’m a Malaysian who working in Singapore.
    Just don’t know whether to open a CDS in Malaysia or CDP in Singapore?
    Any advices?
    By the way, my intention is to own Singapore REITs and ETFs.
    Thanks.

  9. Joseph

    April 11, 2018 at 5:12 pm

    Hi Ian,

    I’m a Malaysian and currently working in Singapore. Found an interest in stocks value investing. Plan to open a CDP. My question is if I return to Malaysia for new employment then do I need to terminate my CDP in Singapore since my employment pass no longer valid.

    Thanks.

    • The Fifth Person

      April 30, 2018 at 1:49 am

      Hi Joseph,

      As far as we know, you should be able to keep your brokerage account in Singapore. You can check directly with the brokerage as well 🙂

  10. JinHang

    April 20, 2018 at 12:54 pm

    Dear Fifth Person,

    I noticed that you have the following articles:
    How to buy shares in Malaysia and open a Malaysian brokerage accountBy Ian Tai on January 23, 2018

    How to open a brokerage account in Singapore (and how to choose the right broker)By Adam Wong on July 18, 2017

    Do you have an article on similar nature for “how to buy shares in Hong Kong?” for a Singaporean residing in Singapore? In Singapore and Malaysia, we opened an account in CDP and CDS respectively to record the ownership of the shares. How do we do that for Hong Kong? If we invest for dividend yield (buy and hold), which broker in Hong Kong would you recommend? Do you have an article on this?

    Thanks you.

    • The Fifth Person

      April 21, 2018 at 9:37 am

      Hi JinHang,

      Thanks for the suggestion! We’ll publish an article on Hong Kong brokerages when we have the information.

      In the meantime, you can consider iFast. It is a Singapore brokerage and they probably offer the lowest fees for trading Hong Kong stocks with no custodian fees.

      https://secure.fundsupermart.com/fsm/new-to-fsm/pricing-structure

  11. Keng Eric

    April 28, 2018 at 2:07 am

    I am a student who currently interested in investing REIT.
    But I get to know from a video that says the dividend gained will be lesser with higher salary.
    As a student without any income, am I able to invest REIT with my savings?

  12. Zaid Nader

    May 18, 2018 at 5:03 am

    Hii, Im a foreign student from Jordan currently study in Kuala Lumpur.
    I would like to trade in the KLSE. am i allowed to open CDS account?
    i currently have a maybank saving account, what should i do to be to trade in the klse.

    • Ian Tai

      May 22, 2018 at 1:25 pm

      Hi Zaid,

      You may just walk into any Maybank Investment Bank branch to open an account. Just bring the needed documents such as your passport … etc and let the bank staff take you through it 🙂

      Regards
      Ian

  13. Yasir

    May 29, 2018 at 11:44 pm

    Hello! I am a student in Malaysia pursuing my Ph.D.
    I am looking for an investment option that can fetch me ~1000MYR monthly.
    Being a Muslim I want to invest in only Halaal businesses, example I cannot invest “interest based incomes” or in “liquor firms” etc.

    Can you suggest me the approximate amount I need to invest and where should I invest. example in India we have mutual funds designed specially for Muslims like TATA ETHICAL or RELIANCE SHARIA etc. Do we have such options in Malaysia or Singapore?

    Thanks in Advance

  14. Andrew

    September 24, 2018 at 8:54 pm

    Are there any investing apps available in Malaysia yet?

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