Revisiting the standardisation of minimum trading unit in Malaysia: influence on short- and long-term stock liquidity and volatility

Key Points

• To examine how the standardisation of minimum trading units affects both short- and long-term stock liquidity and volatility in Malaysia.
• Analyzed trading data before and after standardisation of minimum trading units.
• Compared short-term and long-term impacts on stock liquidity.
• Evaluated volatility measures across different stocks.
• Short-term liquidity improved after standardisation, leading to higher trading volumes.
• Long-term volatility showed mixed results, with some stocks stabilizing while others remained volatile.