COMPETITION is hotting up for online share trading, with CIMB Investment Bank Bhd the latest to offer zero brokerage fee for its online share trading services via Clicks Trader.
The newest Clicks Trader promotion is valid from Jan 9 to March 8. Investors have to register online for a Clicks Trader account and also open a share trading account with CIMB Investment Bank.
The investor must have a minimum RM10,000 in a non-interest bearing account. The minimum deposit must be maintained at all times to enjoy the zero brokerage fee.
The trading limit is one-time cash balance, meaning the investor can only buy shares up to the value of the deposit.
CIMB Bank head of retail banking Peter England said: “It’s always been easy, it’s always been low cost but now we have made it free, too. This is how we create value for our customers in line with our central philosophy of forward banking.”
In the past, CIMB charged a flat fee of RM8.88 per matched order a session for investors who used the Clicks Trader account for trading.
CIMB Investment Bank head of retail equities Paul Gui said customers would have to key in orders via Clicks Trader because there would be no remisiers.
Currently, 60% of Clicks Trader account-holders are active traders.
Other brokerages offering competitive rates to promote e-broking are Jupiter Securities Sdn Bhd and HLG Securities.
Jupiter Securities charged a brokerage fee of 0.05% or minimum RM8 per transaction, while HLG Securities offers brokerage fee from 0.1% or minimum of RM12.
Both offer an interest rate of 3% a year for credit balances in members’ trading accounts. “This is the standard rate offered in the industry,” said Jupiter Securities senior vice-president C.M. Shim.
“The thing about investment is to make the money work for you as a way to beat inflation,” he said.
Jupiter and HLG Securities have no minimum or maximum amount for upfront cash deposited by investors. The charges for opening an account and the Central Depository System fees are also waived.
For transactions of less than RM100,000, HLG Securities charges interest of 0.42% and for transactions above RM100,000, it charges 0.21%. Its intra-day rate for buying and selling is 0.1%.
Remisiers usually charge RM40 for normal transactions and most full-service packages offer a rate of 0.42% for transactions of RM100,000 and below, and lower charge of 0.21% for transactions above RM100,000.
Jupiter has a trading limit of one-time for the upfront cash deposited, while HLG allows customers a trading limit of two times. However, depending on companies’ risk appetite and their customers’ portfolio, some brokerages have offered their customers a limit of up to five times, according to an industry source.
Jupiter has 15,000 account-holders, of whom about 90% are retail investors and 2,000 active traders.
The Remisiers Association of Malaysia president Sam Ng Soon Lee said the association was concerned about the low brokerage fees due to a possible negative impact.
His concern is that other banks will also offer fully negotiable commission rates which could add to market volatility.
“Investors are now free to trade stocks like commodities and this could lead to the prices becoming very volatile,” said Ng, adding that the commission rate imposed was supposed to provide a stable trading environment.
The association has submitted a proposal to the Securities Commission to “always have a floor” for commission rate.
“We believe that the market should provide a functioning, fair and orderly environment for everyone,” he said.