What is the 'Kuala Lumpur Stock Exchange (KLSE)'

The Kuala Lumpur Stock Exchange (KLSE) is the former name for what became the Bursa Malaysia Exchange in 2004.  

BREAKING DOWN 'Kuala Lumpur Stock Exchange (KLSE)'

The Kuala Lumpur Stock Exchange (KLSE) was a precursor to the Bursa Malaysia Exchange. Its main index is the Kuala Lumpur Composite Index (KLCI), composed of the top 30 companies on the Bursa Malaysia Exchange. In 2018, the top five were:

  1. AMMB Holdings Bhd,
  2. Astro Malaysia Holdings Bhd, 
  3. Axiata Group Bhd, 
  4. CIMB Group Holdings Bhd, and
  5. DiGi.Com.

As listed, you will commonly see “Berhad,” “BHD,” or “Bhd” after the company’s name to show that it is a public limited company. In contrast, the use of the Sendirian Berhad or SDN BHD denotes that a private limited company.

In 2004, Bursa Malaysia was demutualized and became an exchange holding company with publicly traded shares. Stocks, bonds, derivatives and ETFs are traded on the exchange. It has a fully automated trading system launched in late 2008 and is one of the larger and most active exchanges in Asia with nearly 1,000 companies listed.

History of the Kuala Lumpur Stock Exchange and Bursa Malaysia Today

The KLSE was created after the Singapore Stockbrokers' Association was established in 1930 to deal in Malayan securities. The stock exchange went through several name changes over the years, including the Malayan Stock Exchange, which began to trade publicly in 1960, and the Stock Exchange of Malaysia, established a few years later, which would soon become the Stock Exchange of Malaysia and Singapore. Later, in the 1970s, that exchange was separated into the Kuala Lumpur Stock Exchange Bhd (KLSEB) and the Stock Exchange of Singapore. In the 1990s, the KLSEB was renamed the Kuala Lumpur Stock Exchange. Kuala Lumpur is the capital of Malaysia and its cultural and economic center. Kuala Lumpur has the largest GDP by capita of all Malaysia's states and Malaysia’s economy is the fourth largest in Asia.

In July 2018, Bursa Malaysia released a consultation paper which sought public comment on a proposed amendments related to exchange-traded funds (ETFs). This call comes after a task force on ETFs, which included the Securities Commission Malaysia (SC), Bursa Malaysia and other market participants, made recommendations aimed at expanding investor interest in ETFs. These recommendations included promoting relatively new ETFs like futures-based ETFs, which include leveraged ETFs and inverse ETFs, physically backed commodity ETFs and synthetic ETFs. In service to these goals, the rule changes would loosen regulations on the short selling framework to allow short-selling all kinds of ETF units. Currently traders can only short-sell equity-based ETFs.

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