On behalf of the Board and Management of KLOFFE, I would like to welcome you to this historical moment at KLOFFE- that is the launching of our second product – the KLSE CI Options Contract today.
As you know, KLOFFE, a wholly owned subsidiary of the KLSE, commenced trading with its first derivatives product - the KLSE CI Futures Contract based on the KLSE composite index on 15 December 1995.
Upon the introduction of KLSE CI Futures Contract, KLOFFE became the second financial derivatives exchange in South East Asia after Hong Kong to trade its own homogeneous product in its own currency. Since then, KLOFFE has undertaken extensive and painstaking research, careful and thorough planning - at times heartaches and even disappointment over the last 5 years. However, with hardwork, patience and perseverance - I am proud to say that TODAY KLOFFE has achieved its second milestone in providing the first exchange traded OPTIONS contract in Malaysia.
I am proud to announce that with the introduction of options trading, KLOFFE will no longer be labelled as a ‘single-product’ exchange, something that had not augured well for us, especially on the international front.
Also, KLOFFE is now able to offer retail and institutional investors both local and foreign an additional tool for hedging and risk management or even ‘speculation’ in the marketplace.
In the past few months, we have been working very closely with the Malaysian Derivatives Clearing House (MDCH), the Malaysian Futures Brokers Association (MFBA), our Local members, the Kuala Lumpur Stock Exchange (KLSE) as well as the Securities Commission (SC) to ensure a smooth and successful launch of the KLSE CI Options Contract.
KLOFFE recognises that it is crucial for all market participants to be properly educated to ensure that they have sufficient understanding and skills of financial decision making in the area of risk management of derivative products.
In this context, we have in the pipeline for the next few months, programmes such as special presentations to fund managers and institutional investors in Singapore and a Stock Index Options Conference which will be jointly organised with SC, MDCH and MFBA.
In addition, we are also working with consultants to launch an internet derivatives trading game. This game is specially designed to provide participants an opportunity to test the waters of trading derivatives and the cash market without risking any large sum of money. We are also looking forward towards providing options pricing models to assist the investing public. These models will be installed in our web page for public use.
Ladies and gentlemen.
The past few years had been somewhat difficult years for KLOFFE especially since the imposition of the exchange controls in late 1998.
This had severely dampened the liquidity in the marketplace and effectively halted KLOFFE’s significant growth during the 1997/1998 period. KLOFFE has not been deterred by this drawback, in fact we are at the moment embarking on more innovative marketing, promotional efforts as well as effective education and training programmes to increase liquidity in the marketplace.
We will also be undertaking research on other products so as to fulfil our mission to offer more derivatives products in the future for more complete risk management solutions as the capital market in Malaysia undergoes some significant changes.
In concluding, I would like to express our sincere gratitude to all quarters, especially the SC, the MDCH, the KLSE, the MFBA and its members, and the local members for their joint efforts and support in making this options launch a success.
Our appreciation also goes to the media for your continuous support provided throughout the existence of KLOFFE.
Last but not least, my sincere gratitude and appreciation to the KLOFFE staff. I am proud to say that KLOFFE which has come this far in making this OPTIONS launch a reality, is due largely to the fruits of the staff’s dedication and commitment. On that note, I thank all KLOFFE staff once again.
In closing, I would like to thank each and every one of you in taking time off to be here with us this morning to witness our launch ceremony. This is certainly a significant step forward, not only for KLOFFE and the derivatives industry, but for the Malaysian capital market, as a whole. Our hope is that the options will be well received by all quarters, especially the investors both local and foreign.
Thank you.
