Bursa Malaysia Bhd - Chapter 3

Bursa Malaysia Bhd - Chapter 3

• Bursa Malaysia is the stock exchange of Malaysia, part of ASEAN
• Previously known as Kuala Lumpur Stock Exchange
• Regulates the Malaysian market for securities and derivatives
• Ensures orderly dealings and efficient clearing/settlement of transactions
• Sets rules for listed issuers, directors, advisers, organizations, trading participants, clearing participants, depository agents, and direct members
• Manages and monitors compliance with the rules, addressing breaches
• Actively monitors listed issuers and brokers, observing trading activities.

Objectives of the Chapter

• Explain the structure of Bursa Malaysia Bhd
• Detail the functions and roles of the stock exchange (primary and secondary markets)
• Explain the rationale for company listing
• Describe Bursa Malaysia indices and their performance
• Examine factors affecting stock market performance
• Explain factors impacting Initial Public Offerings (IPOs)
• Outline listing requirements for Main Market and ACE Market
• Detail Corporate Disclosure Policy

Reasons for Listing

• Confidence
• Expansion
• Additional funds
• Higher profile

Factors to Consider for IPO

• Timing
• Corporate/Capital restructuring
• Pricing
• Method of listing
• Underwriting the issue

Selection of FTSE Bursa Malaysia KLCI Constituent

• The FTSE Bursa Malaysia KLCI comprises the top 30 largest companies listed in the Main Market, based on full market capitalization.
• Companies must meet specific eligibility requirements.

Bursa Malaysia Index Series

• FTSE Bursa Malaysia KLCI (formerly known as KLCI): Base year 1977
• Various Indexes are outlined by industry (e.g. Industrial, construction, consumer product, finance, industrial product, mining, plantation, property, technology, trading/services)
• Different base years exist for each of these Indexes.

Traded Indices

• FTSE Bursa Malaysia KLCI Index
• FTSE Bursa Malaysia Mid 70 Index
• FTSE Bursa Malaysia Top 100 Index
• FTSE Bursa Malaysia Hijrah Shariah Index
• FTSE Bursa Malaysia Asian Palm Oil Plantation Index (USD and MYR)

Benchmark Indices

• FTSE Bursa Malaysia EMAS Index
• FTSE Bursa Malaysia Small Cap Index
• FTSE Bursa Malaysia Fledging Index
• FTSE Bursa Malaysia EMAS Shariah Index
• FTSE Bursa Malaysia ACE Index
• FTSE Bursa Malaysia Palm Oil Plantation Index

Factors Influencing Stock Market Performance

• Economic Performance
• Interest Rates
• Reported Earnings
• Oil Prices
• Political Environment
• International Environment
• Entry of institutional investors

Corporate Disclosure Policy

• Makes public information available for informed investment decision-making
• Ensures equal access to this information for all investors
• Listed companies are responsible for exercising this policy.

6 Policies

• Policy on Insider Trading
• Policy on Immediate Public Disclosure of Material Information
• Policy on Public Dissemination
• Policy on Clarification, Confirmation, or Denial of Rumours or Reports
• Policy on Response to Unusual Market Action
• Policy on Unwarranted Promotional Disclosure

Policy on Immediate Public Disclosure of Material Information

• Listed companies must immediately disclose all material information about their affairs, except in special cases
• Disclosing information about mergers, joint ventures, management changes, new products, memorandum of understanding,

Policy on Public Dissemination

• Listed companies must disseminate material information to the public to gain full understanding
• Public disclosure must be made via the exchange, news outlets, and press services simultaneously.

Policy on Clarification, Confirmation or Denial of Rumour or Report

• Listed companies must clarify, confirm, or deny rumors or reports that contain material information.

Policy on Response to Unusual Market Activity

• If unusual market activity occurs, the listed company must investigate the cause.
• Consider if any information has been disclosed or withheld

Policy on Unwarranted Promotional Disclosure

• Listed companies are expected to refrain from excessive promotional disclosures.

Policy on Insider Trading

• Insiders must not trade their company's securities based on material information not yet public
• They must not trade even if information has been released to the press.

Penalties for Breach of Listing Requirements

• Public reprimand
• Suspension of trading
• Prohibition on sales without proper documentation
• Delisting of a company
• Any other penalties set by Bursa.

Parts and Dates of Chapters

• Various dates and parts listed for chapters one and two