The successful conversion of the remaining 653 counters in 14 sectors of the KLSE Main Board with effect from 9:00 a.m. on Monday, 26 May 2003 marks the completion of the phased implementation to standardise all securities listed on KLSE to the standard board lot of 100 units. KLSE's objective in maintaining a fair and orderly market was also successfully achieved throughout the three implementation stages.
First stage implementation was completed on 7 April 2003 with the conversion of all 350 counters on the Second Board to standard board lot of 100 units. Second stage implementation was completed on 28 April 2003 with the conversion of 108 counters in the Main Board's Trading/Services sector. The third and final stage was completed on 26 May 2003 with the conversion of the remaining 653 counters in 14 sectors of the Main Board.
Deputy President, Strategy and Development, Abdul Hamid Sheikh Mohamed said the successful implementation of the standard board lot was due to the collective support and co-operation of industry and market participants.
"This significant achievement is certainly shared with everyone involved, including all stockbroking companies and their information technology, audit and backroom processing teams who have contributed immensely to the success of this effort.
"This is clearly a major step forward in enhancing the quality of service to all investors and we hope investors will take full advantage of the more attractive entry level to securities investment.
"The feedback and input obtained from other market participants such as the issuers, investors, and other intermediaries have been incorporated in the implementation to ensure that the exercise to standardise board lot at 100 units meets with its objectives.
"The standard board lot makes investment in securities more accessible and affordable for all investors. It will enhance investor participation in high priced securities. Enhanced investor interest and participation will result in a more efficient price discovery and sustained market liquidity," Abdul Hamid said.
Abdul Hamid added the completion of the standard board lot is timely as it coincides with the implementation of recent measures to enhance the economy and the capital market.
"Whilst the positive effects of these measures may only be expected in the medium to long term, investors can immediately capitalise on the ready mechanism of the standard board lot to make well considered investment decisions in the stockmarket.
"Given the more attractive and lower entry level to securities investment, the standard board lot has opened up the widest range of investment opportunities in the KLSE to all categories of investors," he said.
There has been positive market development following the completion of each stage in the conversion to standard board lot.
Average daily volume (excluding Direct Business Transactions) for the Second Board increased to 32.81 million units in the seven weeks after the conversion to standard board lot of 100 units, from average daily volume of 22.75 million units in the seven weeks prior to the conversion, recording an increase of over 44.21%.
Meanwhile cumulative trading value for the Second Board counters rose to RM 1,098.39 million in the seven weeks after the conversion to standard board lot of 100 units, compared to RM895.70 million in the seven weeks prior to trading in 100 units, recording an increase of over 22.63%.
Following the second stage conversion of all securities in the Trading/Services sector of the Main Board to standard board lot of 100 units on 28 April 2003, average daily volume for the Trading/Services sector of the Main Board rose to 38.24 million units in the four weeks after the conversion, compared to 33.87 million units in the four weeks before the conversion to 100 units, an increase of 12.92%.
One of the objectives of the standard board lot of 100 units is also to enhance shareholding spread of securities. KLSE has revised its Listing Requirements for the Main Board and Second Board companies in relation to public shareholding spread.
With the implementation of the standard board lot of 100 units, the minimum number of public shareholders for all listed companies has been standardised at 1,000 shareholders holding not less than 100 shares. Prior to the revision, a graduated scale based on issued and paid-up capital was applicable. Thus, the implementation of the standard board lot of 100 units and the revision to the minimum number of public shareholders would facilitate compliance to the shareholding spread requirement by listed companies through the enhancement of share distribution to the public.
Additionally, the KLSE has the discretion to accept a lower percentage of public shareholding spread where it is of the view that such a lower percentage is sufficient to maintain liquidity in the trading of the particular shares.
The revisions to the Listing Requirements will take effect from 1 July 2003.
For more information on the standard board lot, investors and other market participants are advised to read the frequently asked questions (FAQs) related to standard board lot, available on the KLSE website www.klse.com.my. The FAQs are available in both English and Bahasa Melayu. Investor's guide brochures on "Standard Board Lot of 100 Units" in English, Bahasa Melayu and Mandarin are also available through the network of KLSE member companies nationwide, Balai Maklumat BSKL and Authorised Direct Members (ADM) since 1 April 2003.
The complete text of the revisions to the Listing Requirements and the MESDAQ Market Listing Requirements on the share spread requirement is also available on the KLSE web-site at www.klse.com.my.
