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Bursa Malaysia

Bursa Malaysia
May 04
03:16 2011

The Bursa Malaysia is still sometimes known as the KLSE, in reference to its former title as the Kuala Lumpur Stock Exchange. Now, however, it is much more than just a stock exchange, and in fact its array of product offerings may be more diverse than any other one financial exchange in the world. Its product offerings stretch from securities, of course, to equity futures and options, commodity futures and options, bonds, and even Shari’ah compliant equities. Shari’ah compliant trading involves obeying Shari’ah (Islamic law) as it pertains to the types of investments one can make. While the underlying companies of a Shari’ah-compliant financial instrument don’t necessarily have to be Shari’ah-compliant themselves, the structure of the instrument must be, for instance with regard to paying interest.

The Bursa Malaysia also has offshore operations, Exchange Traded Funds (ETFs), structured warrants, and Malaysian government securities futures. Its only commodity futures market is crude palm oil futures, but that is a market closely tied to other edible oil futures traded around the globe, like soybean oil in both China on the Dalian Commodity Exchange and the United States on the Chicago Board of Trade. Palm oil is also known as coconut oil, and is produced all across Southeast Asia, some parts of Central America and South America, as well as in India and a few African countries.

Trading in these markets typically takes place from Monday through Friday, 9:00 a.m. to 12:30 p.m. then from 2:30 p.m. to 5:00 p.m. (Kuala Lumpur time). For a schedule of which holidays the Bursa Malaysia closes, see its website at http://www.klse.com.my/website/bm/about_us/our_holidays.html. The Bursa Malaysia does facilitate electronic trading of its products, and with market accessibility a goal, it collaborated with the Chicago Mercantile Exchange in 2009 to offer its crude palm oil futures via CME’s Globex trading platform.

Kuala Lumpur is the capital of Malaysia, with a population of 1.4 million people. It is the logical location for the Bursa Malaysia because it is also home to some of the largest securities traded on the exchange. The top five securities traded are: CIMB Group Holdings Berhad, Malayan Banking Bhd, Sime Darby Berhad, Petronas Chemical Bhd (a subsidiary of Petronas), and Genting Group. This is also a highly developed and centralized access point to the broader Southeast Asian marketplace.

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