KUALA LUMPUR, March 6 (Bernama) -- CGS-CIMB Futures Sdn Bhd ("CGS-CIMB Futures") (formerly known as CIMB Futures Sdn Bhd) is pleased to announce the expansion of its suite of product offerings to include Contracts for Difference (“CFD”). It is the first broker in Malaysia to offer CFD where the underlying instruments are shares listed on securities exchanges in Singapore, Hong Kong, Australia and the United States of America; and benchmark indices where constituents of the index are listed on foreign securities exchanges.

CFD is a leveraged derivatives product that tracks the price movement of its underlying instrument. Essentially, CFD is a contract an investor enters into to gain exposure to an underlying instrument whereby differences between the closing and the opening value will be settled through cash payments.

CFD has become increasingly popular among investors mainly due to its leveraging effect, allowing exposure to a wide range of assets and markets, as well as being a cost-effective cover to hedge existing portfolios. Currently, CFDs are available in jurisdictions such as Australia, Canada, France, Germany, Singapore, South Africa, United Kingdom and Malaysia.

The introduction of CFDs by CGS-CIMB Futures is in line with the Securities Commission Malaysia ("SC")'s Capital Market Masterplan 2 to promote and develop the derivatives market. The CFD framework is intended to widen the range of investment products to cater to the needs and risk appetites of investors. It is also in recognition of the increased sophistication of certain segments of the market.

In view of the complexity of CFD, the SC adopts a phased approach in introducing CFDs. In Phase 1, CFD is only allowed to be offered to accredited investors, high net-worth entities and high net-worth individuals. The SC will conduct a post implementation review of Phase 1 prior to considering allowing CFD products to be offered to retail investors in Phase 2.

CGS-CIMB Futures adopts the Direct Market Access (DMA) model as it offers transparent pricing structures to investors. DMA allows CFD pricing and liquidity to be identical to the underlying exchange. Investors get to enter into a CFD at the underlying market price and all orders will be executed in real time, assuring investors that what they get are true market prices.

“One of the key advantages of CFD trading is that investors can trade using margin, which means they are only required to commit a fraction of the full contract value. The leverage feature can be a powerful trading tool for investors, if they fully understand how leverage trading works and the associated risks. CGS-CIMB Futures will conduct continuous educational programmes to educate investors and create greater awareness on CFDs,” said the Head of Futures Broking of CGS-CIMB Futures, Mr. David Tan Choon Beng.

SOURCE : CGS-CIMB Futures Sdn Bhd

FOR MORE INFORMATION, PLEASE CONTACT:
Name : Chong Chyi Ming
Marketing and Communications
CGS-CIMB Securities Sdn Bhd
Tel : +6012-225 7968 / +603  2635 6666

--BERNAMA