Webull sees greater retail participation among Malaysians, vying for market share

This article first appeared in Capital, The Edge Malaysia Weekly on June 3, 2024 - June 9, 2024

THE newest kid on the block, Webull Malaysia, sees ample opportunities in the local stockbroking space and is vying for a bigger market share with the seamless experience offered by its newly launched mobile trading application.

“I believe there is room for greater retail participation. There are three million CDS (Central Depository System) account holders on Bursa Malaysia. Two million holders are active. But if you compare that to our population, there is a gap,” its CEO Kenneth Chan tells The Edge in an interview.

“So Webull is coming into Malaysia and we want to address the call by Bursa and the SC (Securities Commission Malaysia) for greater retail participation. We believe the market size is sufficiently huge for us to coexist and create value.”

Webull is the second electronic trading platform to launch its services this year, looking to capture a slice of the Malaysian retail market, after Moomoo made its debut here in February. Like Moomoo, Webull is offering a zero-commission fee for the first 180 days to all new users of its platform, from the opening of an account.

Despite the low commission fee business model, Chan believes more trading activity among retail investors will keep its presence here sustainable.

“Looking at the trend of greater retail participation in Malaysia, we are optimistic that we will be able to do well here moving forward. We are looking at the bigger market pie and we want to bring in more new investors while meeting the demands of current investors,” he stresses.

With the ease of retail participation on the local bourse, Chan observes that the overall trend has remained robust, especially when compared with the pre-Covid-19 years. “The current retail investor participation on Bursa is 22%, which is comparable with that in other bourses across the region, which stands at about 20% to 30%,” he notes.

Bursa Malaysia data show retail participation hit a high of 37% in 2020 and 2021 as a result of ample market liquidity. However, it normalised to 26% in 2022, 27% in 2023 and 22% so far this year. From 2010 to 2019, retail participation hovered between 22% and 26%.

Chan has more than 15 years of experience in the local capital markets and the early part of his career was with the investment operations department of Bank Negara Malaysia, before becoming a forex trader at the central bank. Later, he joined Bursa Malaysia, where he led the product and market development drive to develop the nation’s capital markets. Prior to joining Webull Malaysia, he was involved in the asset management industry.

On the key challenges affecting retail investor participation, Chan says one of them is an underdeveloped level of investment knowledge. “While people may be interested to try investing in the capital markets, they may not be confident of their financial understanding and decision-making skills, which can impede their ability to make informed investment choices.”

Hence, Webull’s goal is to empower investors to build their wealth and assets beyond traditional savings avenues.

With the aim of building a multi-asset platform, Webull Malaysia provides access to trade Bursa securities and derivatives alongside US-listed stocks and exchange-traded funds via its app. Investors are able to trade derivatives such as FBM KLCI futures contracts (FKLI) and crude palm oil futures contracts (FCPO).

Founded in 2016 by an alumnus of Alibaba Group Holding Ltd and Xiaomi Corp, Webull’s trading platform is currently available in the US, the UK, Hong Kong, Singapore, Australia, South Africa, Brazil, Japan, Mexico, Canada, Indonesia and Thailand. Its headquarters is in the US. Globally, its app has seen more than 40 million downloads.

With the tagline of “learning, sharing and investing”, Webull is very focused on localisation, with both English and Malay languages available on all of its features, says Chan. Another thing that stands out is the level of technology that provides a seamless experience for investors, he adds.

Webull is striving to make investing affordable, he stresses. “So we have zero platform fees to provide affordable cost of investing, making it accessible to all retail investors,” he points out, adding that the availability of fractional trading will further increase investors’ affordability.

Webull’s commission is from as low as RM5 for trading of Bursa-listed stocks and 99 US cents for those listed in the US. The platform also features a shariah indicator to help investors identify shariah-compliant stocks.

Historically, financial inclusion has been centred on broadening banking access. However, Chan opines that a broader aspect of financial inclusion should cover the broadening of capital markets, which includes the build-up of long-term savings for asset accumulation. “It is essential to address the key issues faced by non-participating investors,” he stresses.

“First, empowering them with reliable investment knowledge can serve as the initial step to alleviate their fears. Second, leveraging technology to establish a community of investors who can share insights and perspectives, both locally and globally, before making investment decisions can be beneficial. Lastly, by catering to current retail expectations regarding the ease of accessing information, user interface and experience, as well as ensuring cost-effective and affordable entry points, we can make the investment journey more engaging and interactive,” he adds.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.