Rakuten Trade Sdn Bhd, Malaysia's leading online equity brokerage, has unveiled an innovative feature for investors by introducing fractional share trading for NYSE/NASDAQ-listed shares. This groundbreaking move establishes Rakuten Trade as the first domestic online brokerage to offer such a service, aiming to stimulate online trading and encourage retail participation, particularly among new investors.
In a statement, Kazumasa Mise, CEO of Rakuten Trade, emphasized the significant changes being made to their services to cater to the evolving needs of investors. The introduction of US fractional share trading is set to revolutionize investment opportunities in Malaysia, providing investors with a more affordable, diversified, and balanced portfolio that includes renowned brands such as Apple, Amazon, and Tesla.
The fractional share trading feature allows investors to start trading with small amounts, with a minimum purchase size as low as 0.01 (Buy) or 0.0001 (Sell) for US stocks, American Depositary Receipts (ADR), and exchange-traded funds (ETFs) available on the Rakuten Trade platform. Additionally, brokerage fees for these trades range from as low as RM1 to a maximum of RM100 or US$1.88 to US$25.
This marks the second enhancement to Rakuten Trade's US trading platform, following the introduction of foreign currency settlement services in August 2022. The inclusion of foreign market trading in Malaysian Ringgit or US Dollars empowers investors to diversify their investment strategies across Bursa Malaysia and the US markets.
Kazumasa further explained that Rakuten Trade's foreign market trading platform serves as a catalyst for new investors to gain experience and test trading strategies before venturing into the US markets. Over the past 16 months, more than 30,000 clients have embraced foreign market trading, resulting in over 160,000 successful orders placed. Notably, this service currently contributes over 20 percent of the company's revenue.
Following the expansion of its trading services to the Hong Kong Exchange, Rakuten Trade made two significant changes to enhance its offerings. It lowered its brokerage fee to an unprecedented low of RM1 and simplified its points program, enabling clients to earn brokerage-free trades more effortlessly.
Since its establishment in May 2017, Rakuten Trade has experienced remarkable growth. As of April 30, the company has activated nearly 265,000 accounts and facilitated a total trading value exceeding RM115 billion. Furthermore, clients' assets under administration have surpassed RM3.7 billion, solidifying Rakuten Trade's position as a leading player in the Malaysian investment landscape.
With the introduction of US fractional shares trading, Rakuten Trade continues to innovate and empower investors, facilitating greater accessibility, flexibility, and opportunities in the global markets.