An interview with Rakuten Trade Malaysia’s Managing Director Kaoru Arai. Investing is simple with Malaysia’s first fully online broker and Fintech company of the year.
MyPF had the privilege to seat down for a lunch interview with Rakuten Trade Malaysia. Here we share a few questions brought up by our team and members.
MyPF: What makes Rakuten Trade unique?
Kaoru Arai, Rakuten Trade Malaysia MD: Rakuten Trade is the only brokerage site in Malaysia where the entire process is online. Everything is online from opening your account to placing your order to execution. There is no human interaction required. It’s a 100% online process.
MyPF: We are excited to see Rakuten launch contra trading. How is the response to Rakuten’s contra trading?
Kaoru Arai: Contra trading is very unique. Clients can check what is their trading limit and collateral, and Rakuten automatically shows the trading limit based on cash and stocks. For blue chip stocks, you can buy up to 5x limit but must be settled within 3 days by selling or picking up. Contra trading provides leverage for smaller capital used.
Malaysians and Investing
MyPF: What role does Rakuten play in getting more Malaysians to invest?
Kaoru Arai: Rakuten has above 20,000 clients with only a small percentage not actively trading. Rakuten is successful in reaching clients who are beginners in investing. The next step is to educate on how to start investing and actively trading. Rakuten is running educational programs including videos and research reports. We try to show that stock trading is simple and doesn’t have to be difficult or a headache. Hopefully we are reaching more diverse and beginner clients. This is the democratisation of investing so every person has access to capital markets.
For many previously in Malaysia, the entry level was very high. You used to get asked questions like “How much money do you have to invest?”. For Rakuten, we don’t care how much money have you have to invest. Investing should be accessible to everyone.
MyPF: What would you advice investors in today’s market sentiments filled with talk about trade wars, rising US interest rates, and an impending bear market?
Kaoru Arai: There are two types of investors. For trend followers, you follow the trend for example investors who buy when the market goes up. Another type of investor are contrarian investors who buy when markets go down. There is always volatility in the market. Some invest for the short term like contra traders, while others invest for the long term.
There may be worries such as trade wars or Malaysia’s ratings downgrade. There are many rumours. Most importantly is that even though many people say that the market is bearish. It may be difficult to try to buy the bottom. In conclusion, if you’re a trend follower, the current chaotic unpredictable market state may not be a good fit for you. But if you’re a contrarian it may be a good time to buy in today’s market.
Rakuten Trade’s Future
MyPF: What’s the future direction for Rakuten?
Kaoru Arai: Rakuten is hoping that the access and education for new beginner investors continues to grow especially on how to trade and invest. The benchmark is Rakuten Japan which includes comprehensive services including futures, mutual funds, fixed income, etc. Japan has access to diversified financial products. Maybe Rakuten Malaysia will in future access to comprehensive products and services for clients. What’s important is what services are good for Malaysians.
Rakuten aims to be #1 and also following high Japanese standards. It is very important for Rakuten to be a client driven business. We put clients first. For example if there’s a client complaint, we will focus on solving the problem and improving. There’s a variety of choice in today’s fintech economy and it’s always a two-way communication to improve service. We are a disruptor and service changer that focuses on clients first.