Online stockbroker Rakuten Trade eyes 20%-30% market share in three years

KUALA LUMPUR: Rakuten Trade Sdn Bhd, which enables Malaysians to open an equity trading account online for trading on the local bourse, aims to garner a retail equity market share of 20%-30% in three years.

Rakuten Trade is the joint venture (JV) company between Kenanga Investment Bank Bhd (Kenanga IB) and Japan’s Rakuten Securities Inc that was launched yesterday. It is a provider of digital trading services, approved by the Securities Commission to provide front-end trading facilities to its clients. Kenanga IB has a retail equity market share of over 20% in Malaysia as at end 2016.

Rakuten Trade managing director Kaoru Arai said in Japan, 90% of retail equity trading is done online.

“We estimate that in three years, we will profit in our business,” he told a press conference at the launch of Rakuten Trade yesterday.

As Malaysia’s first full-fledged online equities broker, Rakuten Trade is set to revolutionise online stock trading with its platform, which is modelled on the system employed by Rakuten Japan. iSPEED, which began in 2008, has about 1.25 million downloads in Japan currently.

The localised version of the Japanese mobile app, offers traders first in-market online account opening, one of the lowest brokerage rates in Malaysia, a financial portal to access simplified research materials and real time market information easily, fast and seamless cash transfers, educational programs and loyalty programmes under one robust ecosystem.

The platform is designed to appeal to the needs of new generation investors who are digital and e-commerce inclined, as well as existing technology-savvy traders who prefer self-directed trades.

Deputy Finance Minister Datuk Lee Chee Leong, who officiated the launch of Rakuten Trade, said as at end 2016 Malaysia’s online trading participation was 25% of total market trades, increasing from 22% registered at the end of 2012. This is an encouraging development in line with the increase in the number of central depository system accounts among the younger generation.

“A growing trend seen in the domestic capital market is the emergence of a new group of investors who are more technology savvy and receptive to using technology to invest. In terms of the Malaysian equity market, while the preferred access channel is still through the traditional remisier or broker-assisted trading we have seen a gradual increase in online trading,” said Lee.

Last month, Rakuten Trade received a restricted Capital Markets Services License from the Securities Commission that enables them to deal in listed securities and provide investment advice. The JV agreement between Kenanga IB and Rakuten Securities was first inked in April 2016, with a capital investment of RM30 million.

Rakuten Trade charges a flat brokerage fee of RM7 for trades below RM1,000; RM8 for RM1,000-RM9,999; 0.10% of trading value for RM10,000-RM99,999 and a flat RM100 for trades RM100,000 and above.