This article concludes a two-part feature on Rakuten Trade Sdn Bhd. Stay tuned to Smart Investor for more in-depth coverage on industry issues, personalities and platforms!
Malaysia’s first completely online equities broker, Rakuten Trade Sdn Bhd is the result of a 50:50 joint venture between Kenanga Investment Bank Bhd (KIBB) and Rakuten Securities, Inc.
The JV is able to tap on KIBB’s local brokerage expertise by virtue of it being the largest independent investment bank by equity trading volume and value (in addition to being ranked as one of the top three brokerage houses with the largest network of remisiers in the country).
Meanwhile, Rakuten Securities which is the second largest online broker in Japan is tasked to provide online brokerage expertise and cutting edge technologies.
Very broadly, Rakuten Trade’s mobile-based trading services offer a 360° trading experience from account opening, execution, settlement of trade, research and trading ideas as well as rewards and financial knowledge.
The all-in-one seamless platform enables investors to execute their own trading ideas end-to-end. Rakuten Trade holds a restricted Capital Markets Services License by the Securities Commission Malaysia to deal in listed securities and provide investment advice.
The online equity broker was named FinTech Company of the Year at Malaysia FinTech Awards 2018 held in March.
Rakuten Trade is Kenanga Group’s first venture into the fintech space. It was established to fulfil a real market need with the aim to further digitalise Malaysia’s equity broking landscape.
Kenanga Investment Bank Bhd executive director and head of group equity broking business Lee Kok Khee (pic) describes the forging of collaboration with the highly successful Japan-based e-commerce brand Rakuten as having accelerated tremendous cross-learning for the Kenanga Group.
“Together, we will continue to bring the benefits of fintech to the Malaysian investment community,” he points out. “Paired with Kenanga’s extensive retail reach and experience of over 40 years, we are confident this joint venture will continue to take stock trading to the next level.”
Knowledge Is King
Old school investors who look forward to some form of stock trading guidance are likely to appreciate Rakuten Trade’s value-added service vis-à-vis its investor-friendly research report.
“Rakuten Trade clients are discerning, digital savvy investors who do not have a lot of time to read thick reports,” Rakuten Trade’s head of research Kenny Yee tells Smart Investor. “They want information to be delivered quickly, straight to the point and readily available at their fingertips. Hence, our focus is to disseminate brief and easy to digest research reports.”
According to Yee, Rakuten Trade’s research reports are earmarked and designed exclusively for retail investors in mind. This means that its reports are simplified (only one page) with minimal financial jargons and are communicated primarily through digital communication channels for timely delivery.
In essence, Rakuten Trade’s research reports cover seven financial segments that are deemed to be vital elements for investors to make informed decisions. The segments are:
• Company analysis
• Target price
• Technical analysis
• Historical stock price
• Stock information
• Major shareholders
• Summary earnings table
“Our specialty research reports or investment ideas are centred on pushing small and mid cap stocks,” rationalises Yee. “This is because their entry cost is lower, thus more appealing to the masses/retail investors.”
We also distribute reports covering big cap stocks prepared by our partner KIBB. We summarize and simplify the reports to fit into our format.
This means our clients can expect the best of both worlds so to speak,” reckons Yee.
“The recommendation remains intact although efforts are taken to minimise the content to deliver what is most relevant and appealing for the investor to make an informed decision.”
Rakuten Trade’s focus on the small & mid cap sector is also in line with the Securities Commission and Bursa Malaysia’s efforts to spur the vibrancy of stocks under this category.
This follows a stamp duty waiver by Bursa Malaysia effective March 2018 on mid and small cap companies with market capitalisation ranging between RM200 million and RM2 billion as of end-December 2017.
“At Rakuten Trade, we believe there are still many undiscovered ‘jewels’ within the small mid cap space of which we are committed to unearth and promoting them,” enthuses Yee.
Rakuten Trade issues weekly investment ideas and technical reports via its digital-owned assets which include in-app push notification, yellow bar notification on its web and app as well as leverage on short messaging system and social media to reach out to its clients. All reports issued are housed on its website for easy reference.
“In the last one-and-a-half years, the response to our reports in this simplified format has been amazing,” reveals Yee. “We track open rate, click rates, brokerage and trading activities as a result of our marketing push, etc. We have successfully narrowed the gap and already have a following especially among new investors below the age of 40.”