The stock exchange of Malaysia was established in year 1964 with an agreement of currency interchangeability between Malaysia and Singapore but later on in year 1976 both are divided into Kuala Lumpur stock exchange and stock exchange of Singapore and on April 14, 2004 it has changed his name to Bursa Malaysia Berhard. The Headquarter of Bursa Malaysia is located in the capital city of Malaysia, Kuala Lumpur. Now, Bursa Malaysia is an exchange holding company which is approved under the section 15 of the capital markets and services act 2007. Today the Bursa Malaysia is one of the largest bourses in Asia listing 1000 companies' worldwide. "To be the preferred partner in Asia for fund raising, trading and investment" is the vision of Bursa Malaysia (Bursa Malaysia, 2010).
Measure of Activity
FTSE Bursa Malaysia index is the index to measure the activity of Bursa Malaysia. FTSE group and Bursa Malaysia joined together in year 2006 on 26 June and they launched a FTSE Bursa Malaysia index series. FTSE Bursa Malaysia index helpful to the investors it allows them to do cross border analyses and a comparison to the management of the index series. The FTSE Bursa Malaysia index series includes seven benchmark indices like FTSE Bursa Malaysia KLCI, FTSE Bursa Malaysia mid 70 index, FTSE Bursa Malaysia top 100 index, FTSE Bursa Malaysia small cap index, FTSE Bursa Malaysia fledgling index and FTSE Bursa Malaysia EMAS index and it helps all stock sizes within the market.
FTSE Bursa Malaysia shows an upward trend with in last five years except in year 2009 it goes down just because of economic recession otherwise the stock market of Malaysia performed very well in last few years and after the recession this market improves a lot. In year 2005, the stock price was near about 900 and this price jumps to above 100 in year 2007 and the highest stock price goes till now is in year 2008 which is 1500 or more but after this the market goes down very badly and it comes to near about 850 but after this the stock market goes up and it reached to 1350 in till now.
History of stock market of Malaysia
The Bursa Malaysia is one of the important members of the global stock markets. In 1960, a Malaysian stock exchange market has been established and in this market both Malaysia and Singapore traded under an currency interchangeable agreement. In 1973 the exchange split into Kuala Lumpur stock exchange board and stock exchange of Singapore. The KLSEB has been renamed the Kuala Lumpur stock exchange. Again in 2004 the KLSE was renamed to Bursa Malaysia Berhard. In year 2007 the Bursa Malaysia had a market capitalization of US$189 billion and in the same year the main index had a market capitalization of US$ 307 billion which is called as Kuala Lumpur composite index (KLCI). It has divide the listed companies according to his size and growth like the high growth companies listed in the MESDAQ market, the large size companies listed in the Bursa Malaysia securities main board and the medium size companies listed in second board (Smith, 2007).
The local currency of Malaysia is Ringgit Malaysia (RM) or Malaysia Ringgit (MYR) formerly it was Malaysian Dollar. The Ringgit Malaysia is issued by the Bank Negara Malaysia. After the independence of Malaysia bank Negara Malaysia have issued two series of currency coins and three series of currency banknotes for the general circulation in public. Bank Negara Malaysia holds the power to issue the currency only the currency issued by the Bank Negara Malaysia has been considered the legal currency if someone has issued without the permission of the Bank Negara it has been considered as illegal. Any kind of photographs, any design or any kind of drawing of any or part of the banknotes or coins are not allowed for any kind of advertising purposes without taking the permission of the Bank Negara Malaysia (banking info, 2007).
In 1967, after the independence of the Malaysia the Malaya and the British Borneo dollar at par has been replaced to the Malaysian Dollar by the new central bank of Malaysia named Bank Negara Malaysia. This currency retained all his denominations except the $10,000 denomination. When the Malaysian dollar was replaced by the Malay and British Borneo dollar at par the value of the dollar was 8.57 dollar par British pound sterling but after sometime in 1967 the pound was devalued by 14.3% (yahoo, finance, 2008). Until 1973, the Malaysian dollar was exchanged at par value with the Singapore dollar and Brunei dollar as these three countries were tied in a interchangeability agreement but after 1973 the Malaysian government has been pulled out from the agreement. Between the periods of 1995 to 1997 the Malaysian Ringgit was trading as a free float currency at around 2.50 to US dollar. In 1998, the currency of Malaysia is been fluctuated between 3.8 and 4.4 to the dollar before the Bank Negara Malaysia pegged the ringgit to the US dollar in 1998 (x-rates, 2010). In period of between 1997 to 1998 the Malaysian Ringgit has lost almost 50% of his value against the US dollar and it also suffered the depreciation between the periods of 2001 to 2005. In year 2005, BNM announced the end of the peg to the US dollar and by the end of this peg the ringgit has appreciated to 3.16 to the US dollar in year 2008 (US state department, 2008).
Exchange to US
There are two types of exchange rates i.e., direct rate and indirect rate. Direct rate is considered for the US dollar and the indirect rate is considered for the international currency like for here it is Malaysian Ringgit. The direct rate of is 0.3112 and the indirect rate is 3.2130 as per the latest data as on 5 April 2010 (Yahoo Finance, 2010).
Direct: 0.3112 USD per 1 Malaysian Ringgit (RM)
Indirect: 3.2130 Malaysian Ringgit (RM) per 1 USD
Malaysia is a Muslim country so if you are planning to schedule a business meeting then you have to consider his prayer timings. Friday is most probably the religious day to them. A well handshake in a meeting is the standard form of greeting. It is very difficult to address the Malaysians because of an array in culture so to address them try to remember his first name because in the second and third name indicates his father and grandfather name respectively. There is a tradition of the exchange of business cards in the Malaysia and one more thing is that mostly the business man in Malaysia are Chinese so it will be better if your card is in English or Chinese.
Things to do a business in Malaysia
Patient: patient is one of the most important things in any kind of business that takes to the ladder of growth. So, whenever there is any business negotiations be patient with your Malaysian counterparts.
Relationship: establish business relationship with your Malaysian counterparts because without this you may not be able to do business in Malaysia.
Polite: whenever you go to sign a deal or any business practices that time are patience and always show business etiquettes. This is an essential part to get success in business in Malaysia.
Things not to do
Always remember signing a contract is not a final agreement there are some other procedure to do final agreement.
If you want to enter into a business with any Malaysia company don't forget to take a letter of introduction from any bank because this will help you in future meetings.
Asking personal questions in Malaysia are very common so don't get surprised by this.
How to start a business
To start a new business in Malaysia or to register a new firm an entrepreneur has to overcome from some bureaucratic and legal hurdles. There is a procedure to register a new firm in Malaysia which includes the nine steps:
Step 1: application to the company's commission of Malaysia on the prescribed form (13A) to ensure the availability of the proposed company's name.
Step 2: promoters must stamp the documents of the company.
Step 3: promoters must file the necessary documents with the company's commission of Malaysia.
Step 4: promoters must make a seal.
Step 5: promoters must share certificates books and purchase statutory books.
Step 6: promoters must register with the income tax department before starting a business.
Step 7: after registration with income tax department it has register for the employment provident fund.
Step 8: promoters must also register with the social security organization.
Step 9: promoter must notify the director general of the Inland Revenue board (The World Bank group, 2010).
Attitudes toward outsiders doing business
Smith, Christopher (2007), stock market Malaysia history and operations, world village retrieve from http://worldvillage.com/stock-market-malaysia-history-and-operations