One Sheriff

8/14/2019 One Sheriff

1/21

Asian Markets:Asian Markets:

Strategy for InternationalisationStrategy for Internationalisation

Presented byMohd Ridzal Sheriff

Head, Group Business Development

10 August 2005

Bursa Malaysia Berhad and its Group of Companies (the Company) reserve all proprietary rights to the contents of this Presentation. No part of thisPresentation may be used or reproduced in any form without the Companys prior written permission. This Presentation is provided for information purposes

only. Neither the Company nor the Presenter make any warranty, express or implied, nor assume any legal liability or responsibility for the accuracy,


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2FIA Aisia Derivatives ConferenceFIA Aisia Derivatives Conference

y Incorporation of Malaysian DerivativesIncorporation of Malaysian Derivatives

ExchangesExchanges

y Rationalisation of Malaysian DerivativesRationalisation of Malaysian Derivatives

Market InstitutionsMarket Institutions

yBursa Malaysia: Transformation ProcessBursa Malaysia: Transformation Process

y Bursa Malaysia: A Single ExchangeBursa Malaysia: A Single Exchange

y Market StatisticsMarket Statistics

y Malaysian Government PoliciesMalaysian Government Policiesy Recent Developments in MalaysiaRecent Developments in Malaysia

y Key Developments by Bursa MalaysiaKey Developments by Bursa Malaysia

ContentsContentsContentsContents


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y 19801980

Establishment of the Kuala LumpurEstablishment of the Kuala LumpurCommodity Exchange (KLCE) with CPOCommodity Exchange (KLCE) with CPO

FuturesFutures

y 19951995

The Kuala Lumpur Options and FinancialThe Kuala Lumpur Options and Financial

Futures Exchange (KLOFFE) was establishedFutures Exchange (KLOFFE) was established

and KLSE CI Futures contract was launchedand KLSE CI Futures contract was launched

y 19961996Malaysia Monetary Exchange (MME) wasMalaysia Monetary Exchange (MME) was

established and the 3 Month KLIBOR Futuresestablished and the 3 Month KLIBOR Futures

was launchedwas launched

Incorporation of Malaysian Derivatives ExchangesIncorporation of Malaysian Derivatives ExchangesIncorporation of Malaysian Derivatives ExchangesIncorporation of Malaysian Derivatives Exchanges


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y June 2002June 2002

Approval of the transfer of MDCH from MDEXApproval of the transfer of MDCH from MDEXto Securities Clearing Automated Networkto Securities Clearing Automated Network

Services (SCANS), a wholly owned subsidiaryServices (SCANS), a wholly owned subsidiary

of the Kuala Lumpur Stock Exchangeof the Kuala Lumpur Stock Exchange

y August 2002August 2002

The sale of MDCH to SCANS was completedThe sale of MDCH to SCANS was completed

Rationalisation of Malaysian Derivatives MarketRationalisation of Malaysian Derivatives Market

Institutions (2)Institutions (2)

Rationalisation of Malaysian Derivatives MarketRationalisation of Malaysian Derivatives Market

Institutions (2)Institutions (2)


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Company limited byguarantee

Operating stock exchange

(64 Member Companies)

Company limited by shares

Exchange holding company

Completed:

5 January 2004

Company limited by shares

Derivatives exchange

Business Rules

100%

DemutualisationDemutualisation

Previous StructurePrevious Structure

Previous StructurePrevious StructurePresent StructurePresent Structure

Present StructurePresent Structure

ListingListing

Listed:

18 March 2005

Bursa MalaysiaBursa MalaysiaDerivativesDerivatives

Bursa MalaysiaBursa MalaysiaDerivativesDerivatives

Bursa Malaysia: Transformation ProcessBursa Malaysia: Transformation ProcessBursa Malaysia: Transformation ProcessBursa Malaysia: Transformation Process


7/217FIA Aisia Derivatives ConferenceFIA Aisia Derivatives Conference

BURSA MALAYSIA BERHADBURSA MALAYSIA BERHAD

Equities MarketEquities Market

Main BoardSecond Board

q Companies

with track

record

Main BoardSecond Board

q Companies

with track

record

MESDAQMarket

q Growth &

Technology

Companies

MESDAQMarket

q Growth &

Technology

Companies

Bursa Malaysia Securities BhdBursa Malaysia Securities Bhd

Derivatives MarketDerivatives Market

Bursa Malaysia Derivatives BhdBursa Malaysia Derivatives Bhd

Offshore MarketOffshore Market

Labuan International

Financial Exchange (LFX)

Labuan International

Financial Exchange (LFX)

Clearing & DepositoryClearing & Depository

Citibank, Deutsche BankCitibank, Deutsche Bank

Integrated Clearing HouseIntegrated Clearing House

Bursa Malaysia

SecuritiesClearing

Bursa Malaysia

SecuritiesClearing

Bursa Malaysia

DerivativesClearing

Bursa Malaysia

DerivativesClearing

Common DepositoryCommon Depository

Bursa Malaysia DepositoryBursa Malaysia Depository

Bursa Malaysia: A Single ExchangeBursa Malaysia: A Single ExchangeBursa Malaysia: A Single ExchangeBursa Malaysia: A Single Exchange



Derivatives Products Listed on BursaDerivatives Products Listed on BursaDerivatives Products Listed on BursaDerivatives Products Listed on Bursa

y Bursa offers equity, financial and commodityBursa offers equity, financial and commodity

derivatives for trading:derivatives for trading:

Crude Palm Oil Futures (FCPO)Crude Palm Oil Futures (FCPO)

Crude Palm Kernel Oil Futures (FPKO)Crude Palm Kernel Oil Futures (FPKO)

Kuala Lumpur Composite Index Futures (FKLI)Kuala Lumpur Composite Index Futures (FKLI)

Kuala Lumpur Composite Index Options (OKLI)Kuala Lumpur Composite Index Options (OKLI)

3-Month Kuala Lumpur Interbank Offered Rate3-Month Kuala Lumpur Interbank Offered Rate

Interest Rate Futures (FKB3)Interest Rate Futures (FKB3)

Three-Year Malaysian Government SecuritiesThree-Year Malaysian Government Securities

Futures (FMG3)Futures (FMG3)

Five-Year Malaysian Government SecuritiesFive-Year Malaysian Government Securities

Futures (FMG5)Futures (FMG5)

Ten-Year Malaysian Government SecuritiesTen-Year Malaysian Government Securities

Futures (FMGA)Futures (FMGA)



Annual Turnover & OI : 1995 2005 (May)Annual Turnover & OI : 1995 2005 (May)Annual Turnover & OI : 1995 2005 (May)Annual Turnover & OI : 1995 2005 (May)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Turnover

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

O

pen

position

Volume OP



Breakdown of Turnover (Jan July 2005)Breakdown of Turnover (Jan July 2005)Breakdown of Turnover (Jan July 2005)Breakdown of Turnover (Jan July 2005)

FKLI

52.98%

FMG5

0.88%

FCPO

41.75%

FKB34.16%

FMG3

0.23%

FKLI FMG5 FCPO FKB3 FMG3



0

20

40

60

80

100

120

140

160

180

200

J a n

- 9 6

J u n

- 9 6

N o v

- 9 6

A p r -

9 7

S e p

- 9 7

F e

b - 9

8

J u

l - 9 8

D e c

- 9 8

M a y

- 9 9

O c

t - 9 9

M a r -

0 0

A u g

- 0 0

J a n

- 0 1

J u n

- 0 1

N o v

- 0 1

A p r -

0 2

S e p

- 0 2

F e

b - 0

3

J u

l - 0 3

D e c

- 0 3

M a y

- 0 4

O c

t - 0 4

M a r -

0 5

Volume

(0

00)

0

4

8

12

16

20

24

28

32

36

40

OpenP

osition

(000

)

Volume Open Position

Note: Migration to Electronic Trading on 29 December 2001

FCPO Volume & OIFCPO Volume & OIFCPO Volume & OIFCPO Volume & OI



Record Monthly Volume : 177,319 contracts (October 2003)

Record Daily Volume : 14,508 contracts (21 October 2003)

Record Daily Open Interest : 37,887 contracts (27 September 2004)

Breakdown of FCPO Market ParticipationBreakdown of FCPO Market Participation(Jan July 2005)(Jan July 2005)

Breakdown of FCPO Market ParticipationBreakdown of FCPO Market Participation(Jan July 2005)(Jan July 2005)

33002

43441

4440

34180

5701560

0 10,000 20,000 30,000 40,000 50,000 60,000

No. of contracts

Foreign Institution

Local Institution

Foreign Retail

Local Retail

Locals

Proprietary

Participant

(



FKLI Volume & OIFKLI Volume & OIFKLI Volume & OIFKLI Volume & OI

Figure 1. KLCI Futu

010,00020,00030,00040,00050,00060,000

70,00080,00090,000

100,000110,000120,000130,000140,000

Dec-95

May

-96

Oc

t-96

Ma

r-97

Aug-97

Jan-98

Jun-98

Nov

-98

Ap

r-99

Sep-99

Feb-00

Ju

l-00

Dec-00

May

-01

Oc

t-01

Ma

r-02

Aug-02

Jan-03

Jun-03

Nov

-03

Ap

r-04

Sep-04

Feb-05

Vo

lume

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Open

Position

Volume Open Position

Note: FKLI was downsized on 19 September 2003



Record Monthly Volume

Record Daily Volume

Record Daily Open Interest

Breakdown of FKLI Market ParticipationBreakdown of FKLI Market Participation(Jan July 2005)(Jan July 2005)

Breakdown of FKLI Market ParticipationBreakdown of FKLI Market Participation(Jan July 2005)(Jan July 2005)

: 136,870 contracts (May 2004)

: 16,169 contracts (26 July 2005)

: 33,243 contracts (26 June 1998)

73779

8283

1099

2823

9439037974

112

0 20,000 40,000 60,000 80,000 100,000

No. of contracts

Foreign Institution

Local Institution

Local Corporation

Foreign Retail

Local Retail

Locals

Proprietary

Participants

(



Malaysian Government PoliciesMalaysian Government PoliciesMalaysian Government PoliciesMalaysian Government Policies

y Overall aim to push forward and enhanceOverall aim to push forward and enhance

Malaysias competitive standing regionally andMalaysias competitive standing regionally andinternationallyinternationally

y Move towards becoming a supportive andMove towards becoming a supportive and

effective enabler of business, by putting in placeeffective enabler of business, by putting in place

conducive conditions and creating opportunitiesconducive conditions and creating opportunities

for the private sector to thrivefor the private sector to thrive

Reform of government-linked companies (GLCs) withReform of government-linked companies (GLCs) with

the aim to make them more performance-driven,the aim to make them more performance-driven,

efficiently-managed, commercially-focused andefficiently-managed, commercially-focused and

customer-orientedcustomer-oriented

Develop a strong and vibrant domestic capital marketDevelop a strong and vibrant domestic capital market

as a key enabler in securing healthy longtermas a key enabler in securing healthy longterm

economic growth of the countryeconomic growth of the country

Move forward with deregulation and liberalisationMove forward with deregulation and liberalisation

Transforming the services sectorTransforming the services sector



Liberalisation of the Capital MarketLiberalisation of the Capital MarketLiberalisation of the Capital MarketLiberalisation of the Capital Market

y The following measures were announced byThe following measures were announced by

the Malaysian Government in Septemberthe Malaysian Government in September2004, and incorporated in the 2005 Budget:2004, and incorporated in the 2005 Budget:

100% foreign ownership in futures100% foreign ownership in futures

broking industrybroking industry

Issuance of up to 5 new licences toIssuance of up to 5 new licences to

foreign stockbrokersforeign stockbrokers

Issuance of up to 5 new licences toIssuance of up to 5 new licences to

foreign fund managersforeign fund managers

No restrictions on the number of foreignNo restrictions on the number of foreign

dealer representativesdealer representatives


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De-peg of the RinggitDe-peg of the RinggitDe-peg of the RinggitDe-peg of the Ringgit

y BNM announced on 21 July 2005 that theBNM announced on 21 July 2005 that the

exchange rate of the Ringgit will be allowedexchange rate of the Ringgit will be allowedto operate in a managed float, with its valueto operate in a managed float, with its value

being determined by economic fundamentals.being determined by economic fundamentals.

y BNM will monitor the exchange rate against aBNM will monitor the exchange rate against a

currency basket to ensure that the exchangecurrency basket to ensure that the exchangerate remains close to its fair value.rate remains close to its fair value.


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Key Developments by Bursa MalaysiaKey Developments by Bursa MalaysiaKey Developments by Bursa MalaysiaKey Developments by Bursa Malaysia

Introduction of more productsSingle Stock Futures (SSF)

Ensuring market integrity Size of Clearing fund increased on 1 April 2005

Lodging of shares as margin collateral (wef January 2005)

50 stocks accepted as collateral by Clearing House.

Regulatory Review Amendment to Business Rules - allow opening of omnibus a/c

Education, Marketing & PromotionsInvestor roadshows and conferences i.e. Invest Malaysia 2005,Palm & Lauric Oils Conference & Exhibition

Common Trading PlatformImplementation of new derivatives trading system by Q3 2005

Open API and facilitates Direct Market Access


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Q & AQ & A


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21FIA Ai i D i ti C fFIA Ai i D i ti C f

Derivatives MarketingDerivatives Marketing

Bursa Malaysia BhdBursa Malaysia Bhd

1010thth Floor, Exchange SquareFloor, Exchange Square

Bukit KewanganBukit Kewangan

www.bursamalaysia.comwww.bursamalaysia.com

[email protected]@bursamalaysia.com

+ 603 2034 7188+ 603 2034 7188

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One Sheriff