Account for trading KLSE shares in Malaysia and other countries
Thinking about trading in equity?
To trade shares in Malaysia, you need a CDS account and there are two types of CDS account we can all register as individuals - Nominees and Direct CDS. Both cost about the same to register, ranging from free to RM28 depending on the institution. There are online trading platforms but for some reason I prefer dealing with banks. I am risk adverse and believe that conventional is safer.
I trade with Maybank for about a year -the account offered were Nominees CDS - so your holding appear as XXX Corporation - YOUR NAME. I was told that there is no difference between holding it directly or via nominee but NO..they LIED.
Nominees CDS AccountYou do nothing. Banks charge you a fee for doing anything even if it's just a click of button - under nominee account - they charge you fee for debiting your dividends into your account, manage your rights issue. If you are aiming for dividend income- you will end up paying a lot of fees.
Also, you cannot walk in AGM of the companies without a letter from the Bank. They don't recognize you.
Direct CDS AccountThe main benefit is you can walk in any AGM of the companies you own.
Two reasons you may want to attend AGM - you are free and want to have first hand feel of how the company is doing. Two, you are kiasu and want to collect door gifts/vouchers - applies to some company, local counters are not as generous as the State. Example of good door gifts are Nestle, PosMalaysia, even MKLand, and stingy ones are PJD, Berjaya group related company. I currently do not own any but I found my source on the news.
Second, for dividends and bonuses - you just have to sign up with Bursa for e-payment and it is all free.
Third, you can transfer your account if you want to change brokerage company one day. For now online transaction fee is quite fixed at RM8-12 the lowest but as time goes by and internet-of-things are getting cheaper - a game changer might come. In the states, you even trade with zero fees with Betterment. Nominees account cannot be transferred.
I personally use Hong Leong Bank for a Direct CDS account. I think it is the best with low if not the lowest fee - and they didn't pay me to say that. Applying the account is a bit of a hassle, you need to request for a hardcopy form and attach your 1) photocopy IC and 2) a bank statement or account holding with Hong Leong 3) Make a payment of RM10.60 over the counter 4) Courier the form 5) Wait about two weeks to open the account.
You can also purchase foreign shares with this account although the charges are not competitive.