Readers of this entry ought to understand I am not against the idea of PNB/Unit Trusts or other professional investment management companies in Malaysia. In fact, I'm very much for investing through a professionally managed funds for the know-nothing or know-something investor in Malaysia, but more needed be done in terms of educating the investing public on the benefits and perils of self/direct investment in Malaysian equities.
To reflect on my personal thoughts on retail investors in Bursa Malaysia, I would like to share a comment I placed in a very good blog on Corporate Governance in Malaysia, in an article entitled Wooing retail investors in Malaysia:
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As a layman direct stockmarket investor in Malaysia, I thought the creation of
PNB to increase Bumiputera's (nowadays non-Bumi included) ownership of Malaysian
equities via indirect investment through PNB's funds has its good and bad side,
from this article's POV. Lets not talk about EPF, they are a 'must'. PNB is an
option.
Way before today, investment funds like PNB impressed upon
investors of one thing - invest through us, your capital are guaranteed and you
get 'good' returns of 8%. (Fine with that, you can't expect much with that low,
almost non-existent risk of losing capital).
As time passed by, the
offsprings of PNB early investors and young adults have this firmly planted in
their mind - "my dad/mom/grandparents lose money when they invest directly in
stockmarket in the 90s, why should i try?. Okay, I will open ASB/ASW2020/ASM
account tomorrow, ask PNB to invest for me at a 'good' 8% return".
This
'stay safe,stay low' stance eventually distanced investors away from directly
investing in Bursa Malaysia. I get the same reaction when I told friends and
family I invest directly in Bursa - "aren't you afraid of losing money?" What
they don't know is that, the money they placed in PNB or mutual funds were also
used to invest in Bursa equities!
To increase retail participation in
Bursa, the perception of Bursa as a place to make/lose money easily must be
aggresively retorted, against the aggresive marketing of unit trusts and
safe-haven investment management companies alike.
