Some retail investors are unhappy over the higher costs in investing in stocks after the minimum brokerage charges are increased by about 233% to RM40 per transaction from the current RM12 effective 1st Jan 2008. Local news provider theStar also reported that the increase would have a significant impact on small traders who would be discouraged from trading as frequently as before.
For further illustration, the break-even price for 1,000 shares of RM1 each based on the new brokerage fee would be above RM1.04 per share compared with RM1.012 at the current minimum charge of RM12. This is excluding the stamp duty and clearing fee. 
Maybe Bursa Malaysia could implement dual system of brokerage fees, one for traders or investors who wish to perform their own trading leveraging on STP (straight-through-processing) via internet trading (without going through remisier but instead dealing with the broker house directly) while another option for investors who require remisiers to “assists in executing” their trades. For the former, implement a competitive flat rate whereas for the latter the brokers can continue to charge the RM40 or whatever higher fees per transaction. This will kill two birds with a stone – create volume as well as to ensure remisiers could “survive” (for those who can hardly now).
|
|
September 11th, 2007 by financetwitter
|
|
|
|
|
|
|
Comments
i believe you would only be able to “negotiate” for huge transaction, for small shares, the remisiers might not be able to do anything as the amount is negligible, the same way as before …
yeah, i read and heard everywhere that people are complaining about the $12 fees being hiked … time will tell if the new rule will actually help the brokers and remisiers or it’s a suicide mission … just watch the volume …
haha, you also think there’s no use of the remisier huh? they’re sometimes useful – to certain degree … but investors should be given options nevertheless …
cheers
This not only diminish small investor, it will even increase portfolio risk of some middle-class investor. Such as investor with a RM50,000 portfolio who like to diversify their risk into 20 pieces (RM2500) investment now can only split it into 10 pieces (RM5000) only….too bad….
This system not only making trading volume lower, it is also increasing total market risk……and incompetitive market exchange for business funding !
I think a dual system is better than this current system. I’m looking forward to see how the broking houses price their brokerage fees for online trading since its now ‘negotiable’ according the the bloody 2008 budget. I personally think its a silly idea to increase the price since small investors will now juz wait till they can meet the 0.7% margin before making a trade. Thus the remisier doesnt make more since this is the same commision as it was before the budget. Whats actually happening is that he will lose the small traders who actually were willing to pay the RM12. Also its juz so maddening how the malaysian gov suddenly decides something is too low priced and increases it by a huge amount instead of gradually increasing it. If they say that remisiers cant earn enough with the RM12, wasnt this situation in existence for few years already. Why the sudden change? I feel its a total waste of this this budget. It gives small things so the man on the street is happy but if you look closer they have given nothing. I like your idea of an option to bypass the remisier as i personally cant see a need for him at all. I do admit some ppl still need remisiers but increasingly people are learning how to buy shares online and trade by themselves. I think remisiers are a dying lot and the faster we say goodbye to this useless lot the better.