Rakuten Trade launched, eyes 30% market share

• To offer margin financing services as soon as possible
• Will not hurt Kenanga Investment Bank's existing trading apps significantly 

^{From left: Kenanga Investment Bank executive director Lee Kok Khee, Kenanga Investmnent Bank executive director RoslanTik,  Bursa Malaysia CEO Tajuddin Atan, Kenanga Investment Bank chairman Izlan Izhab, Rakuten Securities president Yuji Kusunoki,  Kenanga Investment Bank founder Noor Zakiah Tengku Ismail, Kenanga Investment Bank managing director Chay Wai Leong,  Securities Commission executive director Kamarudin Hashim, Deputy Minister  of Finance Lee Chee Leong, 2nd Secretary to Embassy of Japan Masayuki Ishiguro, Rakuten Securities executive officer Hidekazu Yui, and Rakuten Trade managing director Kaoru Arai}

Rakuten Trade Sdn Bhd, a joint-venture between Kenanga Investment Bank Bhd and Rakuten Securities Inc, hopes its new full fledge trading platform will capture a 30% share of the retail investor market [in terms of total trades] in three years.

The trading platform - dubbed iSpeed.my - is deemed to be one of the most advanced in Malaysia. 

It allows stock traders to sign up for an account via online, to transfer and withdraw funds seamlessly, have access to research materials and market information fast and easily, one of the lowest brokerage rates, as well as a unique reward programme.

“This [iSpeed.my] is going to transform the trading landscape in Malaysia,” said Kenanga Investment Bank chairman Izlan Izhab in his speech in Kuala Lumpur yesterday.

For now, withdrawals and transfer of funds can only be done via cash transfer.  Soon, the platform will allow margin financing to its members.

"We hope to launch it as soon as possible," said Rakuten Trade managing director Kaoru Arai. 

Synergy or cannibalisation?

Although Rakuten Trade, which was established in April 2016, may be competing against Kenanga Investment Bank’s existing trading platform from the surface level, the reality is not likely the case.

Currently, Kenanga Investment Bank has two mobile apps for its retail investors — namely the KenTrade (for stock trading) and InvesK (for research). 

“There may be some cannibalisation, but it is very minor. The iSpeed.my platform is targeted at those who are more digital savvy and digital commerce inclined,” said a Rakuten Trade official.

More importantly, the Rakuten Trade is targeted at a relatively untapped, fast-growing but still a  small segment -- the young, digital savvy investors/ traders.

As at end 2016, there are about 220,000 Central Depository System (CDS) account holders below 35 years old. The number is less than 10% of the total CDS account holders of 2.49 million. 

Besides the vast untapped potential growth of young traders, Rakuten Trade is also looking at taking advantage of the growing smartphone penetration and online trading participation.

As at end 2016, online trading participation is 25% of total market trades, increasing from 22% in 2012. At the same time, smartphone penetration in Malaysia is about 60-70%.

"A growing trend seen in the domestic capital market is the emergence of a new group of investors who are more technology savvy and receptive to using technology to invest," said Malaysia's Deputy Minister of Finance Lee Chee Leong.

One step closer on the regional map of innovation

Lee further added that the launch of Rakuten Trade puts the country one step closer to enhance its standing on the regional map for innovative digital solutions.

"When I was first informed about this event, I must say I was intrigued. Why? Because we as Malaysians have broadly embraced the benefits of this era of digitalisation, e-commerce and financial innovation in many aspects such as purchasing air tickets, gadgets, clothes and groceries online. 

"Today marks another significant step forward with the introduction of a full-fledge online trading services platform by Rakuten Trade," said Lee.