The second stage implementation is part of a phased implementation plan to standardise board lots at KLSE at 100 units. The implementation is carried out in stages to ensure the maintenance of an orderly market and is expected to be completed by June 2003.
Deputy President Strategy & Development of the KLSE, Abdul Hamid Sheikh Mohamed said that with the completion of the second stage implementation yesterday, 477 counters, from a total of 1,131 counters listed on KLSE is being traded in standard board lot of 100 units.
"All 108 counters on the Trading/Services sector of the Main Board, and all counters on the Second Board and MESDAQ Market are being traded in standard board lot of 100 units. These counters make up 42% of all counters listed on the KLSE.
"The remaining counters from the 14 sectors of the Main Board will be converted to standard board lot of 100 units by June," Abdul Hamid said.
The objective of a smooth conversion for all securities on the Trading/Services sector of the Main Board yesterday was achieved with the support and co-operation of industry and market participants involved in the process.
"KLSE will continue to monitor the various implementation stages to ensure the successful conversion of all counters into 100 units and ensure that the market remains fair and orderly," Abdul Hamid said. Trading activity following conversion of all the Second Board counters to 100 units has been positive. For the first three weeks of trading in 100 units, average daily volume on the Second Board (excluding Direct Business Transactions) increased to 31.8 million units from 24.4 million units in the three weeks prior to the conversion. Whilst the average daily volume traded in the market three weeks after the conversion reduced by 15.6% compared to the average daily volume over the same period before the conversion, average daily volume for the Second Board increased by 30.3% for the corresponding period. Trading activity on the Second Board as a percentage of total trading activity has also increased over the same period, from 13.8% before conversion to 21.3% after conversion.
"Cumulative trading value for the Second Board counters rose to RM522.3 million in the three weeks after the conversion to standard board lot of 100 units, compared to RM414.1 million in the three weeks prior to trading in 100 units, recording an increase of over 26.1%," Abdul Hamid said.
The second stage implementation involving Trading/Services sector of the Main Board showed increased investor participation on the first day of trading in 100 units. "Trading volume for the Trading/Services sector of the Main Board has shown a positive increase in the two market days following the conversion. Average daily volume for yesterday and today rose by 13.8%, to 39.2 million units, compared to 34.5 million units on 25 April before the conversion to 100 units." Abdul Hamid urged investors to contact their remisiers to understand the benefits of trading in standard board lot of 100 units. "Indeed, trading in securities in standard board lots of 100 units opens many good investment opportunities for retail investors. Investors should carefully review investment opportunities in securities with their remisiers".
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 standard board lot of 100 units will make 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. The smaller board lot will help reduce holdings of odd lots. With the standard board lot of 100 units, many of these previous odd lot shares will be more marketable. Given the emphasis on shareholder distribution, the standard board lot will also enhance the shareholding spread of securities.
KLSE will announce and update the market regularly on the next implementation stages involved in the standardisation of the board lots to allow sufficient time for investors, dealers and other market participants to make the necessary preparations.
