PETALING JAYA: Young Malaysians are more aware of non-capital market products in the country than capital market products, says the Securities Commission (SC).
According to the SC’s 2021 annual report, its investor survey found that high awareness among young people of non-capital market products included insurance, Tabung Haji and term deposits.
“Respondents’ awareness of capital market products, mutual funds, and stocks and shares was the highest on record, comprising 86% and 65%, respectively,” he said.
In addition, the survey results also showed that young people’s investment decisions were not based on fundamentals, but mainly driven by socio-economic status, family, friends, influencers as well as their perceptions of products and brands.
It also revealed that there was also a familiarity bias among respondents, choosing to invest in products they were already familiar with.
Regarding young people’s perception of the level of risk they were willing to take on investments, the SC said that only 3% of young people considered themselves to have a high risk appetite.
“This may suggest that risk aversion has set in due to the pandemic,” he added.
However, when it comes to capital market products and their associated risks, the survey showed that respondents viewed investments in Amanah Saham Bumiputera (ASB) as low risk.
“By comparison, 70% of respondents perceived stocks and shares to be high risk.
“Overall findings suggest that respondents perceive capital market products as high risk and this perception was consistent across all demographic profiles,” he said.
In terms of youth priorities, the SC noted that wealth creation and investment was only a priority for about a third of the sampled population.
While other respondents considered having emergency funds, savings to support family and pay off debts as their priorities.
“This shows that respondents would use their income for emergency funds and savings earlier in life and only focus on retirement at a later stage,” the SC explained.
In terms of the preferred method of learning about the capital market, about 51% of respondents prefer financial investment discussions.
Furthermore, the survey results also showed that respondents preferred online media such as social media and websites, over traditional media such as newspapers and magazines.
“The findings suggest that SC’s investor education events are essential and will continue to be a valuable platform for investors to gain knowledge. The responses collected served as a reference for the CS to formulate necessary interventions through targeted outreach programs, where possible, to advance investor protection efforts,” he said.
Overall, the survey results revealed that the top three priorities respondents considered before investing were the amount of money available to them, sufficient savings to support the family, and repayment of existing debts.
“It shows that those with low disposable income would have a harder time putting money aside to invest, especially when coupled with risk,” he said.