by NUR HAZIQAH A MALEK / Pic by TMR FILE PIX
The FTSE Bursa Malaysia KLCI (FKLI) futures contract traded on Bursa Malaysia Derivatives Bhd (BMD) recorded a new all-time high in daily trading volume at 66,887 contracts on Thursday.
The volume surpasses the previous record of 65,000 contracts registered on May 27, 2020.
“With the continued uncertainties caused by the Covid-19 pandemic, we are looking to offer new products this year to meet investors’ needs, especially during volatile markets.
“We believe this can further improve the appeal of our offerings and attract new participation into our marketplace,” BMD CEO Samuel Ho said.
Last year, BMD registered 18 trading records partially driven by the volatility in the commodities and securities market.
Meanwhile, Bursa Malaysia will be launching a Pilot Market Making Programme (PMMP) on June 1, 2021 aimed at improving liquidity and price efficiency of mid to large-cap stocks with low velocity.
The program is a sandbox initiative that will be undertaken over a two-year period, in which time the exchange will assess the programme’s effectiveness based on various factors before deciding to make this a longer-term initiative of the local equity capital market.
Bursa Malaysia CEO Datuk Muhamad Umar Swift said the programme is the first market making framework for stocks in the country.
“It recognises the important role of market makers as an integral part of the ecosystem.
“The programme offers incentives to attract more market makers, both local and foreign, in providing greater liquidity for less traded and illiquid stocks,” he stated in a release today.
According to Bursa Malaysia, the exchange will analyse its impact on any improvement in velocity, bid-ask spread, as well as the traded value of the eligible stocks.
The programme will allow eligible market makers to register with the exchange and carry out market making activities on the eligible Stocks while adhering to a preset list of prescribed trading obligations.
The stocks are selected on the criteria such as having a daily market capitalisation of RM500 million and above and a stock velocity of 35% and below while having at least 15% free float, the exchange noted.
The list of eligible stocks will be reviewed and updated every six months from the launch of the initiative.
“To enable the operationalisation and efficiency of market making, eligible market makers will be allowed to carry out permitted short selling on the eligible stocks according to the rules and directives, similar to how other market makers operate on Exchange Traded Funds, Structured Warrants and Single Stock Futures,” it said.