Bursa Malaysia Bhd - Chapter 3
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Questions and Answers

What does BURSA stand for?

Bursa Malaysia

Bursa Malaysia is known as the largest stock exchange in Southeast Asia.

False

What is the primary duty of Bursa Malaysia?

  • To provide investment advice to investors.
  • To maintain a fair and orderly securities and derivatives market. (correct)
  • To ensure efficient clearing and settlement arrangements for transactions.
  • To regulate the issuance of new securities.

    • Which of these entities is NOT directly regulated by Bursa Malaysia?

    <p>Independent Investors</p> Signup and view all the answers

    Match the following subsidiaries of Bursa Malaysia with their primary roles:

    <p>Bursa Malaysia Securities Clearing Sdn. Bhd. = Provides and maintains a clearing house for the securities exchange. Bursa Malaysia Depository Sdn. Bhd. = Provides and maintains a central depository for securities listed on the securities exchange. Bursa Malaysia Information Sdn. Bhd. = Provides and disseminates information relating to securities quoted on the exchange within the Group. Bursa Malaysia Depository Nominees Sdn. Bhd. = Acts as a nominee for Bursa Malaysia Depository, receiving securities on deposit or for safekeeping. Bursa Malaysia Bonds Sdn. Bhd. = Provides an electronic trading platform for the bond market. Bursa Malaysia Islamic Services Sdn. Bhd. = Operates a Shari'ah compliant commodity trading platform.</p> Signup and view all the answers

    What is the main difference between the Main Market and ACE Market on Bursa Malaysia?

    <p>The Main Market focuses on established companies with a large market capitalization, while the ACE Market focuses on smaller, and often technology-based companies, that may not have the same size and experience as larger companies.</p> Signup and view all the answers

    The KLCI comprises the 100 largest companies listed in Malaysia.

    <p>False</p> Signup and view all the answers

    What is Market Capitalization?

    <p>The total dollar market value of all of a company's outstanding shares. It is calculated by multiplying a company's shares outstanding by the current market price of one share.</p> Signup and view all the answers

    Which of these is NOT a role or function of a stock exchange?

    <p>Providing investment advice to individual investors</p> Signup and view all the answers

    What is the primary reason companies choose to get listed on a stock exchange?

    <p>To raise capital for expansion</p> Signup and view all the answers

    What are some factors that can influence stock market performance?

    <p>All of the above</p> Signup and view all the answers

    Corporate Disclosure Policy is designed to ensure all investors have equal access to important company information.

    <p>True</p> Signup and view all the answers

    What are the six components of the Corporate Disclosure Policy?

    <p>Policy on Immediate Public Disclosure of Material Information, Policy on Insider Trading, Policy on Public Dissemination, Policy on Clarification of Confirmation of Rumors and Reports, Policy on Response to Unusual Market Action, Policy on Unwarranted Promotional Disclosure.</p> Signup and view all the answers

    Insider trading is prohibited by the Corporate Disclosure Policy.

    <p>True</p> Signup and view all the answers

    What are some potential penalties for a listed company that breaches the listing requirements of Bursa Malaysia?

    <p>All of the above</p> Signup and view all the answers

    Study Notes

    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

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    Related Documents

    Chapter 3 Bursa Malaysia BHD PDF

    Description

    Dive into the structure and functions of Bursa Malaysia Bhd, the stock exchange of Malaysia. This chapter covers essential details about its regulations, the rationale for company listings, and the factors influencing market performance and IPOs. Explore the critical roles played by indices and compliance in maintaining market integrity.

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