Malacca Securities eyes online segment
Security broker and dealer, Malacca Securities Sdn Bhd, expects a 50 per cent income contribution from the online segment in the next two years from the current 30 per cent. The company rakes in an average revenue of between RM8 million and RM10 million annually with 20,000 customers. Its Senior Executive of Online Broking, Tan Chee Siong said the target was achievable amid rising interest among retail investors in online trading, adding, 10 per cent of the company's client base comprised online traders. "There has been a shift in trend, as online trading which in the past two years was about 10 per cent, has risen close to 30 per cent now," he told reporters after the opening of the company's Penang branch at Fettes Park, here today. Tan said with the advent of technology and the liberalisation of the brokerage rates by the relevant authorities for online trading of stocks and shares, retail investors are now able to enjoy trading convenience at lower rates. He said most investors, especially in the active group, have been losing money due to the high transaction cost and that possibly could be the reason investors were sidelined even the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) reached above 1,600 points. "Many retail investors who are mainly short-term traders, find it difficult to make money with the offline brokerage rate at 0.6 per cent, especially when the benchmark index had already hit an all-time high coupled with the uncertain and bearish world economic outlook in the next few quarters," he added. Tan said Malacca Securities' low cost model is to ensure retail investors bag profits during the volatile market, adding, it would also boost investor sentiment and encourage them to enter the market during challenging times. He said Malacca Securities also hopes the low cost model can increase the participation of retail investors in the stock exchange after their portion shrank from 60 per cent to about 30 per cent currently. "We see the need to get better participation from retailers and believe with this low cost model and internet savvy community, the market share of online trading will increase in the next five years," he added. On investor sentiment, Tan said people are cautious due to the lingering euro zone financial crisis, but the Malaysian market is likely to remain positive, driven by the Economic Transformation Programme that provides a multiplier effect to the economy. Established in 1963, Malacca Securities is a participating organisation of Bursa Malaysia Securities Bhd and licensed by the Securities Commission to undertake regulated activities in securities. Among the services provided in the M+ Online trading portal are free training, fundamental analysis tools, technical charting tools to enhance profit or minimise loss position. Other additional services are short-term margin facility to enable customers to extend their normal T-3 settlement date to T-10 settlement without interest and a 'live' day trading monitoring system. Malacca Securities has three other branches nationwide, namely in Malacca, SS15 Subang Jaya, SS2 Petaling Jaya. The opening of the Penang branch is to capture demand in the northern region. The company is planning to open a fifth branch in Johor Baharu by year-end in a bid to attract Singapore investors, before venturing to East Malaysia with an office each in Sabah and Sarawak. During the promotional period up to Dec 31, Malacca Securities is offering a cash-upfront online trading account, a low brokerage rate of 0.035 per cent or minimum RM6 on per contract basis. -- Bernama