Bursa Malaysia Berhad has introduced a new futures product, the Mini FTSE Bursa Malaysia KLCI Futures (FKLM).
The new contract offers a lower-cost alternative to the existing FTSE Bursa Malaysia KLCI Futures (FKLI) index.
FKLM is based on the same underlying benchmark, the FTSE Bursa Malaysia KLCI (FBM KLCI), which tracks the performance of the 30 largest companies listed on Bursa Malaysia by market capitalisation.
Each FKLM contract carries a value of 10 Malaysian Ringgit (RM) per index point (approx. US$2.5), compared with RM50 per index point for the standard FKLI contract.
With a contract size one-fifth of the standard FKLI, FKLM requires a much smaller capital outlay than the standard FKLI This makes the futures index more accessible for retail investors.
As a result, FKLM is one-fifth the size of FKLI, reducing the initial capital required to trade index futures and potentially making the product more accessible to retail investors.
Bursa Malaysia Director of Derivatives & Carbon Markets Mohd Saleem Kader Bakas said: “Over the years, retail investors have consistently accounted for a meaningful share of trading activity in FKLI.
“The introduction of FKLM offers similar exposure at a more affordable entry level, allowing a broader group of investors to participate in investment management and portfolio strategies.”
He noted that the smaller contract size is aimed at increasing participation in derivatives trading and supporting market liquidity.
FKLM allows investors to gain leveraged exposure to movements in the FBM KLCI and to take positions in both rising and falling markets.
The contract may also be used for hedging purposes, enabling investors to manage short-term market risks while maintaining longer-term investment positions.
Similar to FKLI, FKLM will be available for trading during the Morning and Afternoon Trading Sessions (8:45 am to 5:15 pm Malaysia time, Monday to Friday) and the AfterHours (T+1) Trading Session (9:00 pm to 02:30 am Malaysia time, Monday to Thursday).
