1. No minimum, but please make sure that you purchase enough to cover the minimum brokerage cost. Otherwise, you are paying high transaction costs (in percentage terms).

2. Ask any broker. Here's a systematic approach for you. Go to www.sc.com.my (one of my favourite clients! ) and look for a listing of brokers - they list all capital market intermediaries. Systematically, go and visit each and every broker via their website and check out their commission rates. Then go and approach the brokers and sign up.

3. Either approach works. However, online trading is the best - smaller / lower commission rates. This really works for people who are looking to do their own research and don't need remisiers to feed them any "market talk". For example, I use a combination - My primary approach is online trading for US, UK, Hong Kong, Singapore and Malaysia markets, but I have a backup remisier in Hong Kong, Singapore and Malaysia in case you need to execute trades. This is important especially if you need some trades keyed in before the market starts, and if your net connection is down. So, in short, keep both an online and offline trading channel.

You have just turned 18. DO NOT GET INVOLVED IN DAY TRADING. You are going to get burned. Make sure you have the funds to support all your trades.

Once you have gained more experience, then you can get involved in day trading...

Try not to refer to it is a game.

It really requires skill, and for some, it's a full-time profession.

Referring to it as a game often results in people taking unnecessary risks - thinking of it as sporting risks, for example.

I may have missed the answers to the original questions, but here's my opinion.

1. Well, you should do your own research Some people make a lot of money this way, looking for undervalued entities.

But very importantly, though you might think such aberrations / anomalies might correct themselves over time, sometimes these persist!

Classic example was the Hovid / Carotech example. Can't remember if it still persists.

2. Share price per se does not mean anything. You are always measuring the market price (i.e. the traded share price) of a company relative to the fair value estimate of the equity of the company.

The fair value estimate of the equity of the company can be derived via a variety of methods but fundamentally you are looking for the value of the operating assets, including growth value, and value of the surplus assets, less the company's debt component.

3. Volume - I assume you probably mean the traded volume information you see in the business pages. This indicator is important as it tells you, from a technical analysis perspective, where the floor / ceiling for a trading range is going to be. Furthermore, it also tells you how liquid the stock is, or how susceptible it is to be controlled by a small trading group / syndicate.

Could u mind to elaborate a little bit more for the benefit of other stock market noobs here?

Does this mean that for instance AirAsia could/may be stronger than Genting in terms of financial performance, future expectations etc despite its share price is much more lower than Genting? I remembered that the higher the share price, the stronger the company is. For example: Google share price is about 7-8 times higher than Yahoo.

Another question is why does Microsoft is traded under Dow Jones instead of NASDAQ as Microsoft is an IT company? Is there any difference if an IT company is traded under DJ or NASDAQ?

Thanks....

The answer to your first question is 'YES'. A counter's share price does not determine how BIG a company is, rather the market capitalisation does. Meaning the total shares a company has multiply by the share price will show how much the market value the company.

For example; Genting share at the moment is priced at RM7.40 and the company has 3.7 billion shares

So for Genting (3182) : 3,700,000,000 * RM 7.40 = RM 27,380,000,000 or RM27.38 billion Market Cap


Where as SHELL (4324) share is currently priced at RM11.30 and has 300 million shares

300,000,000 * RM11.30 = 3,390,000,000 or RM 3.39 billion Market Cap

From this calculation, you can clearly see that GENTING is a much bigger company compared to SHELL although SHELL share price is higher.


In terms of financial performance, you have to look at their past annual reports and see how much profit are they generating and the growth of their profits year by year.


For your example of Google being bigger than Yahoo, it is true, but do not look at that share price for that conclusion, rather look at their market capitalisation. Google has a market cap of USD 161.64 Bil where as Yahoo has a market cap of USD 39.02 bil.

This post has been edited by skiddtrader: Feb 11 2008, 06:09 PM

*NO*

I am trying to think of the right analogy here.

The strength of a company is usually measured in terms of performance measures:
(a) Return on Equity
(b) Return on Assets (Asset productivity)
(C) Assets / Equity (Equity Multiplier)
(d) Spread between Return on Capital and Weighted Average Cost of Capital
(e) Gross Margin
(f) EBITDA Margin
(g) Working Capital ratios e.g. Inventory Days, Payables Days, Receivables Days
etc.

Share price x no. of shares = market capitalisation. All this tells you is the market value of the entire equity base. If you wanted to buy all the shares in the market, this is what you have to pay (excluding any premium for a takeover).

Is a bigger company necessarily stronger? Any girl will tell you that size does not matter

Now, imagine you have a company, COMPANY A, that costs RM10 per share and 1 billion shares in the market. Market capitalisation is RM10 billion. For simplicity's sake, assume it's a zero debt company. The company earns a net profit of RM100,000 per year.

Imagine you have a company, COMPANY B, that costs RM1 per share and there's only 1 million shares in the market. Market capitalisation is RM10 million. Also, zero debt company. The company earns a net profit of RM100,000 per year also.

I ask you - which company is stronger?
(a) COMPANY A - the one with the higher share price?
(b) COMPANY B - the one with the better operating and financial performance?

What do you think?

p.s. and Skiddtrader is absolutely correct to point out that share price and market capitalisation can be totally uncorrelated due to the variable "no. of shares".

This post has been edited by Playbook: Feb 11 2008, 10:27 PM

The NASDAQ serves the same function as the AIM in London, SESDAQ in Singapore, GEMS in Hong Kong, MESDAQ in Malaysia, etc.

When companies want to get listed, they have to meet listing requirements. However, a lot of startup companies do not have the track record to list on the main exchanges. Nonetheless, they want to have access to growth capital. Thus regulators and exchange operators offer growth exchanges like NASDAQ, AIM, SESDAQ, etc. as one avenue for startup (which in this dotcom era, are often IT) companies to list and get access to growth capital.

You could argue that the risks are higher in growth exchanges.

Could u mind to elaborate more on volume?

Let's say current Genting volume is 340. What does 340 means?

Does it mean 340 lots of shares are sold, number of transactions?

If the volume is high, is it good or bad?

hi guys... can someone advise whether is there any free software or website letting us to trade the stock virtually...

I heard there is but i cant find any...

I've heard people playing the stock game at CIMB website before, but I've not personally tried it as it requires a registration.

Maybe you can try to register and see if it works.

CIMB iTrade

CIMB itrade is a quite good virtual stock market for newbies. Try to trade there first before you go into the real stock market.

I have lost lot of money in the virtual stock market...luckily I still earn in the real stock market

thanks ... got it... other than CIMB is there any other site providing this simulation....?

(1) Look at the top row (the definition row) - usually stated in thousands, hence, 340 means 340,000 shares. Not number of transactions.

(2) Volume must be *high* or *low* relative to something. So, a 300, 400, 500 by itself doesn't mean much.

Assume that you have 300k volume. If the historical average daily volume over a 2-year period is consistently 1,000k, this means that this volume is abnormally low. You can think of any prices set as not truly representative of market demand & supply.

However, if you have very high volumes, e.g. 1,000k, when the historical daily volume is only 230k, this can signify a few things:
(a) This usually becomes the price ceiling / floor in a trading band for a stock. These are the points when most people have entered the stock. Hence, traders always look out for price signals where it breaches the floor (signifies a downward trend), or breaks past a ceiling (signifies an upward trend).
(b) Some recent business news or announcements (or even news or announcements are to come) - A stock benefiting from some news! Significant volume just prior to an announcement is often an indicator of insider trading though...
© Hopefully not - This is a stock that might be targeted by a syndicate

How do we tell about ©? Well, check the volume relative to the no. of shares outstanding (or rather, a better measure is the no. of shares not held by institutions). One of the systems the regulators use to track suspicious market activity is meaure trading price & volume volatility in stock, but also the relative trading volume to the no. of shares outstanding. For example, we have had instances in the past of 5,000k worth shares are being traded, but the market availability is only 2,000k worth of shares in non-institutional hands. So what was happening is that the stock is being flipped multiple times during the day across individuals to "spur interest".

The method you mentioned is indeed a good way to track syndicate action. Mind to share how to measure the no. of shares not held by institutions? In other words, how do you know there are 2,000k worth shares in non-institutional hands? Is there any source which gives this information? I do know how to find and understand the volume of any particular stock, but not the number of non-institutional shares being traded.

Terima Kasih

i remember thare is a policy which will be implemented in the near future but i forgot the details of the policy....
tell me if someone know about it....


Is it there is a policy which is bank sector in Malaysia will be opened to other countries bank to join into Malaysia bank sector??


Hope someone can provide me a better pictures of this policy.... when will this policy implemented??

I believe you are talking about the liberalisation of the banking sector. It has already begun in 2007, with new banks like Al-Rahji entering the system and other foreign banks allowed to open a few more branches. It will be in steps though but I do not know the details.

skiddtrader, thx for ur info....

beside that, i would like to know the brief requirement of being listed in 2nd board of bursa.....
example: revenue per year, profit per year and others....

a company with 2million annual net profit with 9m revenue for the last few years elligible to be listed in 2nd board??

Listing requirements in the Bursa website, I didn't bother to open it though.

Listing Requirements

Any1 can explain roughly about the subprime lending?? the definition i found in Wikipedia so difficult and i dunno its meaning......=.=

and why Subprime mortgage crisis will make losses to bank....


Subprime lending (also known as B-paper, near-prime, or second chance lending) is lending at a higher rate than the prime rate. The term "subprime" refers to the credit status of the borrower (being less than ideal), not the interest rate on the loan itself. While often defined or defended as lending to borrowers with compromised credit histories, the Wall Street Journal reported that in 2006, 61% of all borrowers receiving subprime loans had credit scores high enough to qualify for prime conventional loans.[1] The phrase also refers to banknotes taken on property that cannot be sold on the primary market, including loans on certain types of investment properties and certain types of self-employed persons.

Subprime lending is risky for both lenders and borrowers due to the combination of high interest rates, poor credit history, and adverse financial situations usually associated with subprime applicants. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others.

Subprime lending is highly controversial. Opponents have alleged that subprime lenders have engaged in predatory lending practices such as deliberately lending to borrowers who could never meet the terms of their loans, thus leading to default, seizure of collateral, and foreclosure. There have also been charges of mortgage discrimination on the basis of race.[2] Proponents of subprime lending maintain that the practice extends credit to people who would otherwise not have access to the credit market.[3]

The controversy surrounding subprime lending has expanded as the result of an ongoing lending and credit crisis both in the subprime industry, and in the greater financial markets which began in the United States. This phenomenon has been described as a financial contagion which has led to a restriction on the availability of credit in world financial markets. Hundreds of thousands of borrowers have been forced to default and several major American subprime lenders have filed for bankruptcy.