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Friday, May 19, 2017

Kenanga-Rakuten JV set to transform online trading

Thursday, 18 May 2017
BY P. ARUNA

Rakuten Securities president Yuji Kusunoki told StarBiz that the first phase of the business would focus on bringing more Malaysian investors to the online platform, and would only deal with stocks listed on Bursa Malaysia.

PETALING JAYA: Kenanga Investment Bank Bhd’s joint venture (JV) with Rakuten Securities Inc is set to transform the Malaysian online trading scene by offering the country’s first ever fully-online system with straight-through processing to Bursa Malaysia.

The system, which launches today, eliminates the need for any human intervention during the trading process, as the platform links directly to the stock exchange.

This also significantly reduces the cost of trading, as investors no longer have to fork out a commission for agents or remisiers via the straight-through processing platform.

Rakuten Securities president Yuji Kusunoki told StarBiz that the first phase of the business would focus on bringing more Malaysian investors to the online platform, and would only deal with stocks listed on Bursa Malaysia.

The JV eventually plans to also provide margin trading services.

As Japan’s most downloaded trading application, Rakuten Securities’ fully-online platform holds about 60% to 70% of the market share in terms of trading volume among retail investors.

“From our point of view, in Malaysia, the online brokerage business is still not matured.

“Commission levels here are also too high compared to the highly competitive rates we have in Japan,” he said.

Broker commissions in Malaysia typically range from 30 to 40 basis points, whereas in Japan, it ranges from about only three to four basis points.

“Our vision is to get more retail traders, particularly the younger age group to trade on Bursa Malaysia.

“We also want to provide margin trading services, which can then generate huge trading volumes and liquidity in the market,” he said.

In April last year, Kenanga Investment Bank inked a subscription agreement and a JV agreement with Rakuten Securities to jointly provide online brokerage services.

On Nov 16, 2016, the JV received an approval-in-principle for a capital markets services licence from the Securities Commission to deal in listed securities and provide investment advice.

Rakuten Securities, the second-largest online broker in Japan, is one of the main subsidiaries of Rakuten Inc.

The JV with Kenanga will be Rakuten Securities’ first in the equities business outside Japan.


Read more at http://www.thestar.com.my/business/business-news/2017/05/18/kenangarakuten-jv-set-to-transform-online-trading/#cgDqUHb2LXjWfvFp.99

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