Minimum Brokerage Fees

I hope I'm wrong about this. Even though the 2008 Budget has been announced long ago, i came to notice the changes of the brokerage fee structure that government wanted to implement only today. With effect from 1 Jan 2008, all stock transaction will have a minimum brokerage fee of Rm40 instead of current fee of Rm12 -- this will definitely put small investors like me into a very difficult situation. This means that almost all stock transaction will be at least Rm8000 each to be at least breakeven at the brokerage level. If not, you will need to pay the minimum charge of Rm40. Compare to previous level, i only need to breakeven at Rm2449 (using 0.49% rate) per transaction.

From economics perspective, i think it's better for the government to leave this brokerage fees to the market force. The demand and supply as well as the competition among brokerage houses will determine the right level to charge. This will bring the effective use of resource as we all who have studied economics will know that floor and ceiling prices will lead to ineffective use of resource. This is called DEADWEIGHT LOSS, dudes! I think our government have much better things to do than this.

Sometimes, the government always said one thing and did another thing in my opinion. They said they want to encourage retail participation in our equity market but then they came out with this stupid idea of minimum brokerage fee of Rm40.

Let the market force decide. Mind your own business. Take care of our country ever rising inflation level -- everything has risen in price level these days. This still have not counted in the expected petrol price increase yet. If the crude oil price still hovering around USD100 per barrel, i envisage our petrol price will be around Rm3 per litre starting next year.

BN = BARANG NAIK!