http://www.btimes.com.my/Current_News/BTIMES/articles/201306130...

Dearth of young investors on Bursa

Muhammed Ahmad Hamdan bt@mediaprima.com.my 2013/06/13 DEVELOPING CAPITAL MARKET: Call for better Bursa game plan to woo Generation Y into the Malaysian stock market Bursa Malaysia needs to address Generation Y's low level of participation in the local stock market, which is below the global average, analysts say. Their comments came on the eve of Invest Malaysia's ninth edition, organised by Bursa Malaysia, with a long-term aim of developing the country's capital market. Generation Y are those born in the 1980s and 1990s. "Gen Y lacks knowledge and resources to invest in the stock market. There are other options which entice this group to participate like unit trusts and bank investment products," said Ng Chze How, AmInvestment Bank Bhd's director for retail funds. He added that recent stock market crashes have also left a bitter mark on investors, which is why Gen Y is a bit more cautious. "The global financial crisis in 2011 was a bad experience for retail investors, which is something hard for them to forget," Ng pointed out. His view was echoed by a Mercury Securities' analyst as one of the main reasons for the group's lack of participation. "Gen Y learnt from the seniors or parents who lost in the stock market investment during the 1990s. They believe that the stock market is not transparent enough as many shares were manipulated," the Mercury Securities analyst added. Still, equity analysts say that Bursa Malaysia must come up with a better game plan if it wants to step up the plate to attract the Millennial Generation to the stock market. Findings of a 2010 survey by Bursa Malaysia with Synovate Malaysia's help show Generation Y making up 12 per cent of investors on the stock exchange. On the converse, a research done in the US this year by Merrill Edge, an online brokerage owned by Merrill Lynch and Bank of America, revealed that 57 per cent of Generation Y see investing in stock market as a priority. Lee Chee Hooi, Maybank Investment Bank Bhd vice-president and head of retail research, pointed out that the younger generation's household income is too tight to accommodate investing in the stock market.

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"Their debt-to-income (because of high cost of goods, cars and houses) would generally make them unable to invest in the markets as they are maxed out in terms of car hire purchases and house mortgages," he said. Meanwhile, Bursa Malaysia have not provided fresh data on the participation of Generation Y, despite Business Times' query a month ago. The stock market operator has been under pressure lately due to retailer investors giving the cold shoulder to the local market. At its recent annual general meeting, Bursa's chief said that it will introduce more initiatives to boost retail investors' participation in the equity market. "Yes, among the exchanges we are the lowest (in terms of) retail participation. This is something that we need to work on extensively," said chief executive officer Datuk Tajuddin Atan. At Bursa's industry leadership forum entitled "Rethink Retail in 2010", its then-CEO Datuk Yusli Mohamed Yusoff warned the stock exchange of the risk of losing out on a huge investor base if the low retail participation among the younger generation is not addressed.
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