Why are young people shunning Bursa?

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While the the spate of attacks on religious sites is cause for concern, Bursa Malaysia has more worldly worries.

Few young adults are investing in the Kuala Lumpur stock market. A survey has revealed that only 12 per cent of investors are in the 20-29 age group, while 59 per cent involve those 40 years and above.

Some have cited possible reasons: the high risk factor involved in investing in the stock market; young people preferring to spend their money on property, cars and movies;  a lack of education about how to invest, etc.

I have my own theories.

Perhaps young adults, now with more access to independent information, are looking for more stable, secure investments rather than the speculative roller-coaster ride that is the Bursa Malaysia, especially in these days of economic uncertainty.

Or quite simply, many young adults don’t have enough spare cash to invest as their income levels are unable to cope with the rising cost of living. After buying a house and a private vehicle (due to the inadequate public transport) – and you know expensive those can be – and having to cope with rising fuel and food prices, how much spare cash do you think young adults will have left over to invest in the Bursa? Of course, there are study loans to repay as well.

Some of these young people might even think, why should we let the tycoons with access to capital (the young investors’ hard-earned money) earn huge profits – sometimes in ‘cronyistic’ or monopolistic businesses – in return for meagre dividends? Maybe they can see more clearly through the whole charade?

The other issue is one of confidence – or the lack of it. My emailed query to the Bursa in November 2009 has gone unanswered despite a reminder. I had posed the question to Bursa: if a listed firm fails to meet the minimum 25 per cent public shareholding spread requirement, what is the maximum duration allowed for it to comply? Is there a time limit at all?

You tell me, why do you think young people are staying away from the Bursa?

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Alysha
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Alysha

Hi uncle Anil…
I found your blog on the internet and I think its very nice. Keep up the good work!!

XXX
Alysha!!

whispering9
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whispering9

Bursa is like a rigged slot machine; a literal one arm bandit. Young people should be wiser not to gamble their hard earned salaries into slot machines. It is not even a fair game of chance now. Tales of ‘burns’ and ‘wipe outs’ from older peoples should be enough to cultivate a more discerning younger generation. Bursa is a reflection of an unreformed and spoiled Malaysian economy. Yeah….even I am extremely annoyed by this charade “…why should we let the tycoons with access to capital (the young investors’ hard-earned money) earn huge profits – sometimes in ‘cronyistic’ or monopolistic businesses… Read more »

caravanserai
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caravanserai

Bursa Malaysia The youth group skips investment Look at it this way It is still a form of gambling You buy and sell Knowing not the future The way the shares are played By the “big boys” catching the unsuspected The money better place In banks though with low interest rates yet saved Invest in trust funds and insurance policies Properties, gold and precious stones Many may go for lottery Small investments pay millions In Bursa Malaysia only hundreds or thousands Even subscribing for shares One can be eliminated and the long queue in boxes Only the old investors Habits… Read more »

Ganesh
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Ganesh

Anil, wrote a comment, what happened to it?

nkkhoo
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Those investors (who lost money in) Time Engineering privatization … forever remember KLSE is a junky stock exchange.

I lost several thousand ringgit… Never again invest in KLSE.

james
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james

In Conclusion The Tiger Cycle in relation to the financial world is unique as every Tiger year for the past cycles going as far back as there are records, the Dow Jones of the USA crashes and here i would like to stress a point that the Chinese character for crisis is made up of the words “danger” and “opportunity”. “The Dow Jones Crashes Every Tiger Year!” In every crisis there is a great opportunity for gains and sometimes much bigger gains are being presented. I have known investors that have made a lot of profits from this Tiger cycle… Read more »

donplaypuks
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Was there a time ever when they flocked to the stock market, to start with? I don’t think we want young people to dash into the KLSE until they have a reasonable amount of savings. Salting away for retirement, children’s education, owning a piece of land, house or condo, i.e. acquiring an asset, are far more important. Given that dividend yields on KLSE quoted stocks are generally below par, the main reason many over ’30’s flock to the KLSE is to gamble they can make a quick buck in an often highly manipulated market. Coupled with too many family controlled… Read more »

iron
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iron

Dear Unker Albert, We were rebellious too, once upon a time. But we were not exposed to so much variety. Our society back then was very simple. Everything was in Black and White. Not only TV, but also people. It was easy to know who are the good guys, who the bad guys. Today ? Good people steals, bad people saves. That’s why our young are much smarter than us — it’s that type of environment they are in and they adapt to it by developing the ability to discern the truth from the fake. Don’t ask me how, I… Read more »

Uncle Albert
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Uncle Albert

You are absolutely right, iron. Today, young generations are much more smarter (mostly rebellious) than older generations (mostly obedient). Why? Young generations were born in the hi-tech age whereas older generations (like me) were born at the time when TV was not even in existence. so, how to compare old folks with young guns, uh?

iron
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iron

Oh, btw, Anil, take a look at this link —> http://www.time.com/time/asia/features/malay_terror/cover.html

See how far Malaysia has become…

iron
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iron

Anil, All the reasons above plus this —> The younger generations are Net savvy. They know how to look for relevant information. They know how to discern bad info from good info. They know who is lying and who is telling the truth. And most importantly, they know that KLSE is WAY OVERPRICED — and the index is being artificially propped up by government linked funds such as EPF, Khazanah Nasional and the like. On the other hand, the older generations — yes, Anil, you and me included — are way more stupid than them. See what we have done… Read more »

Vineeth Menon
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Vineeth Menon

Those who have little extra cash invest in Singapore and other countries. It was told to me by a VP-Equity for one of the biggest bank,based in Hongkong that they usually wont recommend (unofficially) KLSE due to inconsistencies in Malaysian Government policies.

daniel
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daniel

I heard lot of ways Bursa regulating the counters. We are not blinds. Dont say young people got money, if they got their money, they will either invest some where or thinking of migration. 20 years ago, the starting pay is RM1500, now still around RM2000. With inflation around 5%. Where is their future?

Ganesh
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Ganesh

Young people know that only the Mat Salleh funds can move the Bursa. Now, the Mat Sallehs are so scared with all the drama going about. They have pulled out big time. We will never go back to the 90s bull run if the Mat Salleh don’t come back. In newspapers overseas, it is now implied that we are a politically instable country. Mat Salleh already scared. We need the multibillion dollar funds to come in as our retail players in Malaysia all small ikan bilis. They cannot push the market up like how the huge funds from overseas did… Read more »

Loh Yeow Boo - Penang
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Loh Yeow Boo - Penang

The reasons are: 1. Young people do not have that much disposal income to invest. In fact most of them can hardly survived from the 10th day of every month after receiving salary. They then spend their time n effort thinking how to earn “extra” money. 2. They do not trust the Bursa anymore. Rightly so, cs I am there and I know all the dirty dealings. It is just gambling and supporting the higher-ups. 3. Nothing is transparent in Bursa. (Many) just wants to cheat and have quick bucks. A company once listed is a gambling chip. Core business… Read more »

frags
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From the perspective of a developer, I think the indie scene has been getting plenty of buzz and support in North America. I don’t think it quite hit home here yet but more people are beginning to give the little guys a look. Be it your mom & pop store, music labels, game devs, software dev, bakery, etc. Big companies are too mired in profit making to consider things like community, creativity(franchises & constant rethread are the flavour of the day), environment, goodwill from customer(yes the opinion of 1 customer holds no sway to these companies). While they may have… Read more »

BursaPathy
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BursaPathy

Dear Anil, well said.

The main reason is still “lacking confidence ” in the local market.

If foreign fund continue to shun this market due to many obvious reasons (political, racial, crime situation, corruption,judiciary,etc), it is like a pool of dead, stagnant water.

The young generation will prefer to put their money into properties and trust funds.

With the fear of price hike in all essential items, the younger generation can hardly survive with their meager income, “shares” to them is definitely a non-essential luxury item.

This country need a total revamp of the economic policy and a restructuring before it is too late.

daniel
Guest
daniel

Some people saying: stock market is just a gambling den. History proved more people lose their fortune then people profited. The profited from stock market are the people who are at the upper hand. So, if you gamble, better gamble 4D or Casino than gamble in Stock. Just my opinion.

truth
Guest
truth

Young investors have more access to info and no that the “gold” offered by the klse is nothing but a “fleece”. Those days of conning the investors thru market rumours are ove, now the big investors can only play with themselves.

On another interesting note according to chinese astrology, US came into being in the year of monkey, and coming year is tiger year. Monkey and Tiger are enemies, every Tiger Year has seen a Dow Jones crash.

Worse still Obama is 44 Prez of US. Go into market sure die ma.