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《GLOBAL FOREX MARGIN TRADING MARKET AND USER RESEARCH REPORT》

《GLOBAL FOREX MARGIN TRADING MARKET AND USER RESEARCH REPORT》

As an important economy in Southeast Asia, Malaysia's foreign exchange margin trading market has developed rapidly in recent years, attracting the attention of global investors. With changes in the international financial environment and advancements in technology, Malaysia's foreign exchange market is exhibiting new trends and characteristics.The rapid development of Malaysia's foreign exchange margin market is largely attributed to the proactive efforts of market participants and technological advancements

Preface

As an important economy in Southeast Asia, Malaysia's foreign exchange margin trading market has developed rapidly in recent years, attracting the attention of global investors. With changes in the international financial environment and advancements in technology, Malaysia's foreign exchange market is exhibiting new trends and characteristics. The rapid development of Malaysia's foreign exchange margin market is largely attributed to the proactive efforts of market participants and technological advancements. In recent years, with the global economic recovery, the trading volume and activity in Malaysia's foreign exchange market have continued to rise. Particularly, the popularity of mobile payments and online trading platforms has enabled more individual investors to participate in foreign exchange trading conveniently and swiftly. Malaysia's multicultural background and continuously improving education levels also provide a solid foundation for the development of the foreign exchange market. WikiResearch, as a global professional foreign exchange media and data platform, is committed to providing a comprehensive view of the current state of Malaysia's foreign exchange margin market through in-depth market research and data analysis. This research focuses on Malaysia as a key participant in the Southeast Asian foreign exchange market, exploring the operational status of major brokers in depth, while also understanding the behavior, attitudes, and needs of investors through surveys. To better serve local clients in Malaysia, WikiFX established an office in Kuala Lumpur in December 2019 to provide frontline market data and information support, enhancing insights into the local market. At the same time, WikiFX is committed to providing valuable data support to global forex investors, striving to become a leading platform in the industry.

CONTENT
  • Part I Overview of the Malaysian Financial Market

    1.1 Development Environment of Malaysia's Foreign Exchange Margin Industry

    1.1.1 Financial Regulatory Institutions in Malaysia

    1.1.1 Overall Economic Environment

    1.1.2 Recent Changes in the Regulatory Rules of the Securities Commission Malaysia (SC)

    1.1.3 Offshore Regulatory Licenses from the Labuan Financial Services Authority (LFSA)

    1.1.6 Financial Environment in Malaysia

    1.1.7 Overall Economic Environment in Malaysia

    1.1.8 Overall Social Environment in Malaysia

    1.1.9 Overall Technological Environment in Malaysia

    1.2 Development of Forex Margin Trading

    1.3 Major Cities and Economic Centers

  • Part II Current Development of Brokers in the Malaysian Forex Margin Industry

    2.1 The Landscape of Forex Brokers in Malaysia

    2.1.1 Data on the Forex Margin Industry in Malaysia: Investment Products

    2.1.2 Data on the Forex Margin Industry in Malaysia: Risk Appetite

    2.1.3 Data on the Forex Margin Industry in Malaysia: Trading Tools

    2.2 Current Status of Cryptocurrency in Malaysia

    2.2.1 Development of Regulatory Framework for the Cryptocurrency Industry in Malaysia

    2.3 Current Status of Forex Brokers’ Operations and Development in Malaysia

    2.3.1 Current Operational Status of Forex Brokers in Malaysia: Market Promotion

    2.3.2 The Situation of Illegal Investment Schemes in Malaysia

    2.4 Brokers Operating in Malaysia

  • Part III Survey on Forex Margin Investors in Malaysia

    3.1 Description of Research Subjects of Malaysian Forex Investors

    3.2 Age Distribution of Malaysian Forex Investors

    3.3 Leverage Habits of Malaysian Forex Investors

    3.4 Trading Frequency of Malaysian Forex Investors

    3.5 Investment Behavior of Malaysian Forex Investors

    3.6 Deposit Sizes of Malaysian Forex Investors

    3.7 Attitudes of Malaysian Forex Investors Towards Brokers

    3.8 Key Factors in Choosing a Broker for Malaysian Forex Investors

    3.9 Attitudes of Malaysian Forex Investors Towards Forex Margin Investment

    3.10 Awareness of Cryptocurrency Among Malaysian Investors

    3.11 Attitudes of Malaysian Forex Investors Towards Ponzi Schemes

  • Part IV Prospect of Malaysia’s Forex Margin Industry

    4.2 Strengthening Loyalty Programs and Customer Engagement

    4.5 Bybit's Initiatives and Potential Challenges in Entering the Forex Market

    4.6 Online Education and Group Management: Growth and Monetization Strategies in the Malaysian Forex Market

    4.7 AI and Social Trading: Important Tools for Enhancing Investor Appeal

Part I Overview of the Malaysian Financial Market
  • 1.1 Development Environment of Malaysia's Foreign Exchange Margin Industry

    Malaysia, located in Southeast Asia, is a multicultural and multiethnic federal country that employs a political system of electoral monarchy, constitutional monarchy, and parliamentary democracy. In recent years, Malaysia has undergone significant political and economic changes, with the government actively promoting economic reforms and openness, particularly achieving important progress in manufacturing, high technology, and services. Despite the impact of the COVID-19 pandemic on the economy, the government has gradually realized economic recovery through the implementation of economic stimulus plans.

  • 1.1.1 Financial Regulatory Institutions in Malaysia

    Malaysia’s financial regulatory framework is divided into two separate and parallel systems, working together to ensure the stability and development of the financial markets. The Central Bank of Malaysia (Bank Negara Malaysia, BNM) leads the traditional central banking regulatory system. In addition to overseeing domestic financial activities and the unified supervision of commercial banks, BNM is responsible for formulating monetary policy, managing foreign reserves, and maintaining financial stability.

  • 1.1.2 Recent Changes in the Regulatory Rules of the Securities Commission Malaysia (SC)

    The Securities Commission Malaysia (SC) was established in 1993 and is the primary institution responsible for regulating and overseeing Malaysia's capital markets. The SC's main responsibilities include issuing and enforcing the Capital Markets and Services Act, ensuring fairness, efficiency, and transparency in the securities market, and protecting investor rights. In recent years, the SC has implemented several important updates and reforms to adapt to the changing market environment and technological advancements.

  • 1.1.3 Offshore Regulatory Licenses from the Labuan Financial Services Authority (LFSA)

    The Labuan Financial Services Authority (LFSA) is the dedicated offshore financial regulatory body in Malaysia responsible for overseeing the development of the Labuan International Business and Financial Centre. LFSA provides offshore financial licenses for various financial institutions, allowing them to conduct business in a less stringent regulatory environment while benefiting from tax incentives and a flexible legal framework. As one of the key financial hubs in Southeast Asia, Labuan has attracted a considerable number of forex brokers, banks, insurance companies, and other financial service providers to establish their operations.

  • 1.1.6 Financial Environment in Malaysia

    Malaysia has a diversified and robust financial system that encompasses banking, capital markets, insurance, and Islamic finance. This system is regulated by Bank Negara Malaysia (BNM), which is responsible for formulating and executing monetary policy to ensure the stability and efficiency of the financial market. In recent years, with economic growth and the deepening of financial markets, Malaysia's financial system has demonstrated considerable resilience, continually attracting the attention of both domestic and international investors.

  • 1.1.7 Overall Economic Environment in Malaysia

    Malaysia's economy has demonstrated stable growth over the past decade. Between 2014 and 2023, Malaysia's GDP growth rate averaged between 4% and 5%. Although the GDP contracted by 5.5% in 2020, mainly due to the impact of the COVID-19 pandemic and multiple global economic uncertainties, it swiftly rebounded to 8.7% in 2022. This growth was driven by strong export performance and the recovery of domestic consumption, particularly in key export products such as electronics, oil and gas, chemicals, and palm oil. The government has further promoted economic diversification and robust growth through a range of policies, including infrastructure investment, support for small and medium-sized enterprises (SMEs), and attracting foreign direct investment (FDI).

  • 1.1.8 Overall Social Environment in Malaysia

    The social environment in Malaysia has undergone significant changes in recent years, influenced by factors such as demographic structure, urbanization, ethnic diversity, and aging. By 2024, the total population is expected to reach approximately 34 million, with an annual growth rate of around 1.1%, indicating stability. However, with declining birth rates and slowing population growth, Malaysia is gradually facing the challenges of an aging society. In 2020, the proportion of the population aged 65 and above reached 7%, marking Malaysia's entry into an aging society. Although the youth population under the age of 25 accounts for 40% of the total population, providing a strong labor force for the country, the accelerating aging trend may lead to a potential shortage in the labor market in the future, thereby impacting economic dynamism.

  • 1.1.9 Overall Technological Environment in Malaysia

    In recent years, Malaysia's fintech ecosystem has seen rapid development, supported by the government and regulatory authorities. Bank Negara Malaysia (BNM) and the Securities Commission of Malaysia (SC) have established a fintech innovation laboratory (Fintech Sandbox) to provide an environment for emerging fintech companies to test and innovate. This initiative has led to the widespread adoption of digital financial services, including e-wallets and mobile payments. With the proliferation of 5G technology and smartphones, electronic payment transaction volumes grew by 31.5% in 2023, with payment methods such as GrabPay, Boost, and bank transfer apps like CIMB Clicks becoming mainstream, further promoting a cashless lifestyle.

  • 1.2 Development of Forex Margin Trading

    The development of Malaysia's forex margin market has gone through several stages, evolving from its initial inception to a diversified market today, reflecting its significance in the region.

  • 1.3 Major Cities and Economic Centers

    The development of Malaysia's forex market is primarily concentrated in several key cities, which play significant roles nationwide through policy support and geographic advantages.

Part II Current Development of Brokers in the Malaysian Forex Margin Industry
  • 2.1 The Landscape of Forex Brokers in Malaysia

    As the capital and economic center of Malaysia, Kuala Lumpur attracts a significant number of forex margin brokers to establish offices here. According to research data from WikiResearch, by the end of 2023, the number of brokers in the Malaysian forex market had exceeded 70.

  • 2.1.1 Data on the Forex Margin Industry in Malaysia: Investment Products

    In recent years, Malaysian forex brokers have continuously enriched the variety of investment products they offer. Besides forex, an increasing number of brokers have begun to provide a diversified product portfolio. This expansion not only covers traditional investment categories like gold, commodities, and energy but also includes emerging cryptocurrencies. In contrast, brokers with a single product line that only offers forex trading may face greater challenges in competition and may have reduced appeal.

  • 2.1.2 Data on the Forex Margin Industry in Malaysia: Risk Appetite

    High-leverage products in the Malaysian forex market are quite common among retail investors. To cater to the leverage preferences of different customer segments, many forex brokers in Malaysia enhance their market competitiveness and appeal by obtaining multiple regulatory licenses. By securing various regulatory approvals, some brokers can offer higher leverage ratios under different regulatory frameworks, particularly in offshore regulatory environments, where brokers have greater flexibility to provide leverage of up to 2000 times or more. This not only enhances the legitimacy of brokers in the international market but also increases investors' trust in the platform and their freedom of choice. Currently, the leverage ratios offered in the market range from 10 times to over 2000 times.

  • 2.1.3 Data on the Forex Margin Industry in Malaysia: Trading Tools

    In the Malaysian forex margin market, the MetaTrader platform (MT4 and MT5) remains the primary choice for most investors and brokers. MT4, with its mature performance and user-friendly interface, has become the standard trading platform for the majority of brokers and is widely used in the market. With technological advancements and market changes, the number of brokers offering MT5 is increasing. Some brokers promote MT5 to attract new clients not only through promotional activities but also by highlighting the additional technical analysis tools, market depth features, and diverse order types that MT5 offers compared to MT4. This enhances the appeal of MT5, especially among investors with complex functional requirements.

  • 2.2 Current Status of Cryptocurrency in Malaysia

    In recent years, interest in cryptocurrencies in Malaysia has significantly increased, with approximately 14.3% of the population having engaged with or invested in cryptocurrencies. Their high volatility, high returns, and low correlation with traditional assets have made them an important tool for investors seeking diversification. Most investors view cryptocurrencies as a high-return investment vehicle rather than merely a means of payment.

  • 2.2.1 Development of Regulatory Framework for the Cryptocurrency Industry in Malaysia

    Malaysia has demonstrated a relatively open yet cautious regulatory environment in the field of cryptocurrencies. Thanks to its diversified economy and low inflation rate, Malaysia’s fiat currency is considered one of the most stable currencies globally. To promote the trading of crypto assets, Malaysia allows the legal trading of approved crypto assets, but cryptocurrency exchanges must comply with the relevant regulations set by the Securities Commission of Malaysia (SC) and local laws.

  • 2.3 Current Status of Forex Brokers’ Operations and Development in Malaysia

    Currently, there are over 70 forex brokers operating in Malaysia, primarily concentrated in Kuala Lumpur as the operational hub. Brokers expand their business through outsourcing sales teams. Malaysia’s multilingual environment (including English, Malay, and Chinese) provides a unique advantage for international brokers entering the local market, making it easier for them to communicate and serve a diverse clientele.

  • 2.3.1 Current Operational Status of Forex Brokers in Malaysia: Market Promotion

    Online promotion is beneficial for enhancing brand awareness and reaching a wide range of potential customers. Through social media platforms, video channels, and community operations, brokers can effectively showcase their products and services while interacting with target customers. The flexibility of online promotion allows brokers to accurately target their audience and adjust their promotional strategies to attract potential clients more efficiently and improve conversion rates.

  • 2.3.2 The Situation of Illegal Investment Schemes in Malaysia

    Illegal investment schemes in Malaysia are very active; although the level of activity is not significantly higher than in neighboring countries, it does impact investor enthusiasm. The presence of such investment schemes has undermined the trust of some investors in the forex market, leading them to be more cautious in their investment decisions. However, the activity surrounding these schemes has also, to some extent, driven the expansion of the forex market.

  • 2.4 Brokers Operating in Malaysia

    Most forex brokers have their offices concentrated in Kuala Lumpur, which, as Malaysia’s financial center, boasts a mature business environment in the city and the surrounding Klang Valley region. By the first half of 2024, the Klang Valley region added 400,000 square feet of office space, bringing the total area to 117.9 million square feet, with over one-third of the office space receiving green certification. Although the occupancy rate for offices in Kuala Lumpur’s city center slightly decreased from 65.9% in the second half of 2023 to 65.7% in the first half of 2024, the performance of office space in the outskirts of Kuala Lumpur has been more favorable, with the occupancy rate rising to 85.6%.

Part III Survey on Forex Margin Investors in Malaysia
  • 3.1 Description of Research Subjects of Malaysian Forex Investors

    From June to August 2024, WikiResearch conducted a survey targeting Malaysian forex investors through cooperative questionnaire channels. The purpose was to gain an in-depth understanding of their participation and behavioral preferences in the forex market. A total of 700 questionnaires were distributed, with 500 valid responses collected. Additionally, 50 respondents were randomly selected for follow-up interviews via online or telephone methods.

  • 3.2 Age Distribution of Malaysian Forex Investors

    The Malaysian forex market demonstrates a significant appeal to younger investors, particularly those aged 26-35, who occupy an important position in the market, reflecting a rising interest and participation in forex investment within this age group. As investment channels become more digitalized, more young investors are entering the field, injecting vitality into the market.

  • 3.3 Leverage Habits of Malaysian Forex Investors

    According to the survey by WikiResearch, most investors tend to use leverage of up to 500 times, seeking higher returns while maintaining relatively stable risk management. Some conservative investors choose leverage below 100 times, focusing on capital risk control.

  • 3.4 Trading Frequency of Malaysian Forex Investors

    The Malaysian forex market exhibits significant trading activity, with the majority of investors engaging in high-frequency trading, making day traders the backbone of the market. This rapid response and frequent participation reflect investors’ keen grasp of market opportunities. Meanwhile, some investors choose to trade weekly or over longer periods, demonstrating a more cautious and strategic approach to market participation.

  • 3.5 Investment Behavior of Malaysian Forex Investors

    According to the survey by WikiResearch, Malaysian forex investors exhibit a diversified trend in their investment decision-making methods and rhythms. Self-directed investing remains the preferred choice for many investors, who rely on their own judgments to respond quickly to market changes, demonstrating a high level of importance placed on controlling the investment process. Particularly among the Chinese investor group, due to the influence of Ponzi schemes, they are more inclined to trust their own investment decisions and opt for self-trading.

  • 3.6 Deposit Sizes of Malaysian Forex Investors

    Although this survey did not explicitly categorize different groups, previous research by WikiResearch indicates that Chinese investors typically invest larger amounts, while Malay investors have a broader base of participation. For brokers, this difference offers important clues for capturing the market characteristics of different demographics, enabling them to tailor more targeted services and products for various investors to maximize market demand.

  • 3.7 Attitudes of Malaysian Forex Investors Towards Brokers

    According to the research conducted by WikiResearch, Malaysian forex investors generally prefer to open accounts with multiple brokers to fully leverage the products and services offered by different platforms and optimize their investment experience. Most investors have a positive attitude toward the service quality of brokers; however, some believe that there is room for improvement in the existing services and products.

  • 3.8 Key Factors in Choosing a Broker for Malaysian Forex Investors

    In the Malaysian forex market, investors attach great importance to the decision-making process. The efficiency of deposits and withdrawals is one of the most valued factors, as smooth capital flow and security directly influence investors' trust and long-term partnerships. Additionally, low spreads and transparency in trading costs are core considerations, with investors generally preferring brokers that can optimize their trading returns.

  • 3.9 Attitudes of Malaysian Forex Investors Towards Forex Margin Investment

    Most investors in the Malaysian forex market hold a positive outlook for the future. Many not only choose to maintain their current investment levels, but a significant portion also plans to increase their investments. These investors display confidence in the market, believing that there are still opportunities to be explored and are willing to expand their positions to fully capture potential returns. However, approximately 27% of investors adopt a more cautious attitude, gradually reducing their investments or considering a complete exit from the market.

  • 3.10 Awareness of Cryptocurrency Among Malaysian Investors

    According to the latest research by WikiResearch, Malaysian forex investors are showing increasing interest in cryptocurrency, particularly among younger investors who exhibit a higher enthusiasm for cryptocurrencies. As the number of brokers offering cryptocurrency services grows, some investors have begun to complete forex deposit operations using cryptocurrencies, further boosting market activity.

  • 3.11 Attitudes of Malaysian Forex Investors Towards Ponzi Schemes

    The issue of Ponzi schemes still exists within the Malaysian forex market, although the situation has improved in recent years. Some investors remain affected by these schemes; however, compared to previous years, there is a heightened awareness of the risks associated with such high-risk investment behaviors. As more investors gain experience and deepen their understanding of the risks involved in Ponzi schemes, their impact is gradually diminishing.

Part IV Prospect of Malaysia’s Forex Margin Industry
  • 4.2 Strengthening Loyalty Programs and Customer Engagement

    Many brokers in the forex market have recognized the importance of enhancing customer loyalty and have made noteworthy progress in this area. Strengthening customer loyalty not only effectively increases customer retention rates but also enhances brand image and encourages long-term cooperation between customers and platforms.

  • 4.5 Bybit's Initiatives and Potential Challenges in Entering the Forex Market

    Bybit, a major cryptocurrency exchange active in Malaysia, officially expanded into the forex service sector this August by offering the MT5 platform. This move not only signifies the diversification of its business but also allows users to deposit via cryptocurrencies, providing a convenient channel for cryptocurrency investors and potentially guiding some of them into the forex trading market.

  • 4.6 Online Education and Group Management: Growth and Monetization Strategies in the Malaysian Forex Market

    According to surveys of Malaysian investors and interviews with brokers, investors in Malaysia prefer to interact and learn through group discussions and online live teaching. This format not only bridges the gap between investors and brokers but also provides brokers with valuable channels to drive traffic. In Malaysia, Telegram and WhatsApp are the main platforms for investor group interactions, particularly suitable for real-time communication and information sharing. The high popularity of these platforms enables brokers to quickly reach a large number of target users and maintain investor engagement through group activities.

  • 4.7 AI and Social Trading: Important Tools for Enhancing Investor Appeal

    With the rapid development of artificial intelligence (AI), trading methods in the forex market are continuously evolving. In Malaysia, some forex traders have begun using AI-driven tools for predictive analysis and automated trading. These tools rely on complex algorithms that can analyze market data in real-time and make trading decisions, helping traders optimize their strategies and reduce the risks associated with manual operations. The application of AI tools not only enhances trading efficiency but also provides traders with more accurate predictions and intelligent trading options.

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