Wednesday, January 13, 2010

Younger generation of M'sians not active in stock market. Why?

KUALA LUMPUR: Bursa Malaysia needs to address the low retail participation among the younger generation in the stock market or risk losing out on a huge investor base, said CEO Datuk Yusli Mohamed Yusoff.

There is data to prove it. Based on a survey spearheaded by Bursa and conducted by Synovate Malaysia to understand the investing attitudes and perceptions of Malaysians, it was revealed to StarBiz that only 12% of investors represent the 20-29 age group, while 59% involve those 40 years and above.

In addition, those in the younger and older age groups make up merely 4% and a staggering 61% respectively of the total number of dealers in the market.

“We need to enhance our current business model. The younger generation will not wait for us. If we don’t capture them, they will invest in other products and other markets in the future,” said Yusli at Bursa’s industry leadership forum entitled Rethink Retail yesterday. With 67% of the Malaysian population aged below 25, Yusli said there was tremendous potential in attracting the younger segment.

Chief Executive Officer Bursa Malaysia, Datuk Yusli Mohamed Yusoff delivering his speech during 'Rethink Retail" forum at Bursa Malaysia. AZMAN GHANI/The Star

“We at Bursa are out of touch. If we don’t tap the right age group, we will be in trouble,” said chief operating officer Omar Merican. He highlighted that there was a generation gap between young potential investors and ageing investors and dealers and that half the population used the Internet to monitor share prices.

Yusli also said that one of Bursa’s main tasks in attracting investors was to convince them that it had good products to offer. “There are good companies listed on Bursa ... the only problem is convincing people on that,” he told StarBiz.

The survey also revealed that of an addressable market of 1.2 million, almost 50% of potential investors reject shares while 26% sit on the fence when it comes to shares.

“People are spending on property, cars and going for movies. We want to take some of that spend to the stock market,” said Yusli.

AirAsia X CEO Azran Osman Rani, who participated in the forum, said that wooing greater retail participation had less to do with infrastructure and more to do with content.

“You need to get people excited. If you get people excited, they will walk through cut glass to obtain it. In AirAsia X, we create the demand. Because of our cheap prices, customers fly to locations they had not initally planned on going.”

Synovate Malaysia research director Ben Llewellyn said many viewed investing in shares as requiring very high capital over a short investing period and also having a higher risk premium.

“People shy away from investing because they feel there is a high risk attached and they do not have enough money and don’t know how to invest. Clearly these reasons show a lack of knowledge and can be addressed by education,” he said.



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