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The Malaysian economy has grown to become the 4th largest economy in Asia but also ranks 38th in the world by nominal gross domestic product. Significant differences between Malaysia and its close neighbors include high labor productivity as well as higher education percentages when relating to business and industry. Synonymous with other industrious nations of the world, Malaysia has been quick to adopt the technology and manufacturing criteria required for the growing global digital economy.
As a result of such a strong economy, Malay people lead a very leisurely lifestyle when compared to the proletariat lifestyle that many of its neighbors, including Thailand, Indonesia, and Vietnam are forced to live. Malaysia is on the cusp of a middle-class status equal to Turkey or the Netherlands, but still has a bit further to go before their culture truly accepts this. Malaysians have been aided by the absence of a national goods and services tax (GST), and the low cost of daily living essentials such as food, transportation, and housing. The citizens of this isthmus/island nation also enjoy a first-class subsidized health care system and comprehensive social welfare. This article will cover the financial system of Malaysia, as well as a range of market information covering currency, futures, and stocks.show more
Wage growth presents Malaysia’s largest economical hurdle and has been somewhat stagnant in recent history. Income per capita for Malaysia is around 10,000 American dollars. Although this is not much compared to other areas of the world, the Malaysians are getting excellent value for their money within South East Asia. Analysts expect this to improve on par with Singapore, whom Malaysia models themselves after, as the new world market-driven industrialized economy is just beginning to take hold in Malaysia. Furthermore, the Malaysian economy is stable in its diversity and strongly armed with a burly export economy of high-tech services and products valued at approximately $60 billion dollars (US).
Bursa Malaysia, Malaysia’s own stock exchange was founded in 1930 as an entity named the Kuala Lumpur Stock Exchange (KLSEB, Bursa Saham Kuala Lumpur in Bahasa Melayu). During this period, the first formal securities business of its kind, the Singapore Stockbrokers’ Association, was put forth to formally organize and regulate securities in Malaysia. Later, the Singaporean registry was renamed the Malayan Stockbrokers’ Association in 1937 and again in 1960 as the Malayan Stock Exchange. The latter started issuing public shares and linked Singapore and Malaysia. The Malayan Stock Exchange was established in 1960 and the public trading of shares commenced deepening the financial bond between Singapore and Malaysia’s capital city, Kuala Lumpur.
After Singapore’s expulsion from Malaysia, the two countries separated their financial exchanges with respect to each of their different sovereignties. The once unified exchange became broken down into the Stock Exchange of Singapore and the Kuala Lumpur Stock Exchange Berhad. Berhad is an indigenous suffix often written as Bhd which means a company or entity is public limited holding. In 2004, the Malaysian exchange would get another facelift as the market moved in a digital direction and the exchange itself was demutualized to encourage transparency for investors looking to enter the market. Today, the exchange boasts over 1,000 equities listed and is one of the largest of its kind in Asia.
The Malaysian ringgit (MYR) is considered to be one of the more exotic currency pairs traded on the foreign exchange market. The most popular pair including this currency is the MYR/USD as it is a historically stable, and somewhat predictable pair. The Malaysian ringgit makes up a very small minority of market liquidity and is not traded by many active investors. Instead, many Malaysians have taken to cryptocurrency trading as it can be wildly lucrative and volatile.
The Malaysian ringgit, unofficially dubbed the Malaysian dollar, is the official currency of Malaysia as well as some border zones between its nearby nations such as Indonesia, Thailand, and the Philippines. The modern currency was implemented to replace the British Borneo dollar and Malaya which were used in the 1950’s and 60’s in the region. A ringgit may be further divided into 100 cents (locally called sen) and banknotes are issued in 1, 5, 10, 20, 50, and 100-ringgit denominations. The name Ringgit means jagged and was used to describe the edges of the Spanish coins previously used for currency in the region.
Bursa Malaysia is an exchange holding company that lists equities and securities for the nation. The exchange’s main index is the Kuala Lumpur Composite Index (KLCI), which is composed of the top 30 companies listed on the Kuala Lumpur based exchange. As of 2018, the top five equities listed on the index are:
Malaysia’s services sector, primarily financial services, remain important to the economy with media & telecommunications becoming some of the most enterprising investments made in the South East Asian market.
It is worth noting that Malaysia is one of the leading traders of Palm Oil Futures, and as such, the derivatives market in Kuala Lumpur can be exceptionally volatile. Bursa Malaysia offers comprehensive trading and provides investors with direct access to derivatives, futures, options, and Islamic assets.