Cybertrading kicks off, but company urges government regulation
By Julian Matthews
Friday, January 28 2000

However, in the same breath, its executive chairman Datuk Nik Mohamed Din Nik Yusoff urged regulators to get cracking on drawing up rules to avoid possible abuses of the nascent online equities trading industry.

"There must be some regulations. I hope the authorities will come up with them. Otherwise every Tom, Dick and Harry can set up (similar online trading facilities.) We want only genuine people to provide such information and services on the Net," he said.

Nik Din, who is ex-Kuala Lumpur Stock Exchange (KLSE) executive chairman, was speaking to reporters after the launch of the financial portal Investors Xchange and its "Clik n Trade" service.

The new portal offers real-time quotes and trading of three Malaysian bourses - the KLSE, the Commodities Exchange (COMMEX) and the Kuala Lumpur Options & Futures Financial Exchange (KLOFFE).

Nik Din was voicing concerns over independent investment advise Web sites sprouting up that may not be "genuine".

Major markets in the world have seen an explosion of interest in online trading in the last two years.

The daytrading mania has resulted in various Web sites, forums and chat rooms filling up with gossip, tips and information. Some have proven to be fraudulent and aimed at misleading investors and ramping up shares.

Nik Din described the new service as a cheap and easy means for the masses to trade from anywhere, and even during peak trading times. "The days of investors clamoring for a phoneline to get through to your broker are gone. Now you can do it over the Net," said Nik Din, who bought the first lot to demonstrate the service.

The new service is free for delayed quotes while real-time quotes are offered for a monthly fee of RM20 and investors only need to be registered with a broker to trade online.

The company is targeting to sign up 50,000 subscribers in the first year.

"We also expect to convert more Malaysians to log on to the Internet as a result of investing activities," he said.

Nik Din said the service will also be a boon to brokers and increase their trading volume while saving on costs to set up and maintain individual Internet-based trading systems.

"If we look at other Asian markets where cybertrading has become mainstream, like Korea and Singapore, Investors Xchange will have the effect of giving participating brokers an unlimited number of virtual branch offices.

"Each computer screen of every retail investor has direct access to execute the buying and selling of stocks with participating brokers. This frees up brokers from having the added overheads related to office rental, manpower, operating equipment and so on," he said.

Nik Din said Investors Xchange has also already signed on two stockbroking companies, Jupiter Securities and South Johor Securities, to its panel and plans to enlist all other registered stockbroking houses soon, at no cost.

Virtual Commerce Group, formerly known as KLSE Chilong Systems Sdn Bhd, also offers online financial information and transaction services via StockWatch and FISH*Net services, which are still part of the group's premium offerings.

The Investors Xchange service was developed entirely by local programmers and runs on a 2Mbps line.