Malaysia Readies Steps for Orderly Stock Market on Record Volume
Malaysia Readies Steps for Orderly Stock Market on Record Volume
(Bloomberg) -- Malaysia’s stock exchange is preparing measures to curb excessive speculation on share prices as individual investors boost stock trading volumes to a record.
Bursa Malaysia Bhd. may start issuing market alerts to investors when there’s excessive trading in a security and requiring them to make upfront payments on affected stocks via “designated counters,” it said in an emailed response to questions. This doesn’t necessarily mean the stock is involved in trade manipulation, it added.
“There is always a concern that investors are easily influenced by emotion and instinct that can leave them in a vulnerable position,” Bursa Malaysia said. “Hence, while we continue to drive more retail participation in our marketplace, we also actively pursue our focus to raise the level of financial literacy among Malaysians.”
The stock market has seen the entry of small investors boost transactions to an all-time high of 27.8 billion shares on Aug. 11. Individuals are rushing into equities as Malaysia’s $70 billion stimulus package includes a moratorium on bank loan payments, freeing up funds for investors to place in stocks. The benchmark FTSE Bursa Malaysia KLCI Index has gained almost 30% from a low in March as rubber glove and healthcare stocks surged on supernormal demand driven by the pandemic.
Bursa Malaysia will impose the measures if excessive speculation or suspected manipulation continues after all other preemptive measures have been taken and the specified criteria for designated security is met, it said.
Brokerages may already be turning cautious. RHB Investment Bank Bhd. started requiring an equal amount of collateral for clients purchasing structured warrants, commonly a leveraged product, according to people familiar with the matter.
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