Policy matters require holistic assessments of both the opportunities and potential pitfalls. And if recognised early, appropriate guard rails can be incorporated to protect those who may be vulnerable.
The government recently announced the intention to introduce fractional share trading and reduce the current board lot size for trading by end-2023, ostensibly to improve affordability for small investors to buy shares of companies listed on Bursa Malaysia. Presumably, the objectives are to increase trading activities on the bourse, thereby increasing the demand for shares and driving up stock prices. Small investors who have bought these shares will make profits as a result.
The intentions are simple and good. And yes, there is certainly a need to address the chronic underperformance of Bursa. A poor performing stock market cannot attract capital and investments to support economic activities. But will it result in the intended outcomes?
