Opening Speech at the InvestSmart Fest 2023

Speaker: YB Tuan Steven Sim Chee Keong, Deputy Finance Minister II
Location: Kuala Lumpur Convention Centre
Delivered: 17 November 2023

[Salutations]

Beringat kisah Tun Tuah beli gajah,
10 ekor dibayarnya enam,
Bringat waspada sebelum terjah,
Jangan sampai pelaburan terbenam.

400 years ago, an unnamed chronicler wrote the romance we now know as Hikayat Hang Tuah, the Malay world equivalent of King Arthur's Tales in the West and San Guo Yen Yi the Romance of the Three Kingdom in the East.

In one of the episodes, the Sultan of Melaka sent our hero Hang Tuah to Siam to purchase 6 elephants. When in Siam, Hang Tuah observed that the currency of the country was very fragile, easily broken and easily available. In other words the currency was not durable, can be counterfeited and risk being inflationary. As a solution, Hang Tuah offered the ruler of Siam a type of rare shells from Brunei as an alternative currency. The ruler agreed and ended up giving Hang Tuah 10 elephants for the price of the original 6.

Hang Tuah not only prevented a currency crisis in Siam but also returned a much higher value on the sultan's investment. 67% return on investment to be exact. 67 cent on a dollar investment - if you receive a brochure for such return on investment today, caveat emptor.

Now at least you know Hang Tuah is not only a martial art expert but also an economist and perhaps a fund manager.

Whether this is fiction or history is another matter. What I want to say is this, if Hikayat Hang Tuah is a memoir of ideas, then financial stewardship and management are not foreign to the Malay-Muslim world, not least here in Malaysia.

Congratulations to Securities Commission Malaysia for the long standing initiative to educate the Malaysian public on investments. Admittedly “investment” can be a big word to some. And with rapid innovations in the financial sectors and even faster proliferation of scams, “investment” can be a big and scary word.

This is why programmes like InvestSmart are critical to help ordinary Malaysians to understand the sector and allow seasoned investors to keep abreast of the latest developments.

It is my hope that we will have a more dynamic and vibrant financial sector which in turn will support genuine growth in our economy.

In June this year, for example, Prime Minister Anwar Ibrahim announced a 3-prong strategy to boost our financial sector, to reflect the aspirations of the Ekonomi Madani framework: 1) provide more investments opportunities not only for sophisticated investors but also for ordinary Malaysians; 2) expand the availability of funds for SMEs especially in new economy; 3) structural reform to the bourse for more efficiency and enhanced competitiveness.

I see that among the topics to be discussed is shariah compliant investments and sustainable investments. When I attended the ASEAN Finance Ministers Meeting earlier this year, one of the discussions I had with my ASEAN colleagues was on alternative financing models to fund development, especially in the green economy. In one of the sessions, I raised the idea of waqaf or Islamic endowment being a potential model of alternative financing. Penang and Selangor are two of the forerunners expanding the concept of wakaf investment. This year the federal government has allocated RM200 million for wakaf-based development projects and the amount will be raised to RM500 million in 2024.

Malaysia, as a leader in Islamic finance offers not only existing Islamic finance products but also should be the lab space to discuss and discover more financing models based on compassion, justice and responsible stewardship of the environment especially as espoused by the Shari'ah concept of the economy.

As the finance sector recovers from the stigma of being associated with an inequitable and volatile playground of the rich, we want to explore models which are more just, transparent and sustainable here in Malaysia.

Investment should be about sustainable wealth creation, not destructive speculations nor quick to get rich schemes.

This brings me to the topic of scams.

I must commend the SC for their foresight in launching this educational campaign 10 years ago, at a time when this issue was not as hot as it is today.

When I came into this position one of the first things I did was to meet with the authorities and stressed on the need for 5 key strategies to fight scam: Security, Response & Recovery, Shared Liability, Penalty, and Literacy.

First is Security: we must enhance the security of systems both on the service provider side and consumer side. The banks have by and large taken major steps to implement better security features over the past one year.

Second is Response and Recovery - the authorities must ensure fast action to respond to cases of scams and the recovery of money to the victims. In this regard, the National Scam Respond Centre (NSRC) has been empowered with RM10 million allocation this year and in Belanjawan 2024, RM20 million to ensure timely response to scam reports. To-date, NSRC has managed to intervene and freeze upto RM60 million, thus preventing losses to the victims.

By mid next year, the National Fraud Portal, a smart system by BNM in collaboration with PayNet to trace fund movements and identify mule will be completed.

Please remember, 997. It may save your hard-earned savings..

Thirdly, Shared Liability. I firmly believe service providers have to bear some liability when it comes to scam incidents and not push responsibility solely to the consumers or investors. Yes, there is the problem of moral hazard but this argument works on either side. If financial service providers can just push liability to consumers, then won't it create a situation of moral hazard on their end? I believe risk must be distributed proportionately between the parties involved and not just loaded against one party.

Fourth, Penalty, we are working closely with the Communication Ministry and Home Ministry to look at updating some of our legislations to ensure laws are able to keep up with the evolutions of financial scam activities.

Having said all that, I firmly believe that Literacy - Awareness and Education - is still the most important strategy to fight scams.

Allow me to give you a tip, and I must thank the SC for this:

Whenever you hear or read of a seemingly amazing investment opportunity, remember this acronym TIPU. What does this stand for? Tidak Akan Rugi, Indah Khabar dari Rupa, Peluang Hanya Sekali and last but not least, Untung Besar. Be alert! In fact, when people start promising you outsized returns, it is not enough to walk away. Run!

It all boils to checking and re-checking before you put down your hard-earned money. Firstly, be cautious of investments offered via social media platforms. If they sound attractive to you, remember that the AI has been observing your behaviour and collecting your data to make the offering in words that would most attract you.

Secondly, NEVER deposit your money into personal bank accounts. If someone is asking you to do this as a “temporary” measure, it should trip off your internal alarm system. Payments should only be made to official bank accounts of licensed entities.

Always deal with authorised companies and individuals. How do you figure out who these are? Four places for you to check:

SC Investor Alert List
BNM Financial Consumer Alert List
Bursa Alert List
PDRM “Semak Mule”

If you are still unsure, call the SC hotline or email them to check if an investment is legitimate. This also alerts the SC to the new scammers out there.

In this regard I must also congratulate Bursa Malaysia for their efforts in educating the Malaysian public about investment. The Bursa’s latest investment education initiative called Burmon Traders is very very interesting to say the least. It is a gamification of learning about investment and trading concepts. I have played it myself, I must say it is fun and educational at the same time. I have recommended it to my 9 year old son as the game is targeted at 8-14 year olds. But I will definitely recommend it to anyone who wants to learn more about trading in a fun way.

For those who prefer more serious materials, head on to the Bursa Academy website. This is a comprehensive e-learning platform that caters to the needs of investors at all levels, across the Securities, Derivatives and Islamic Capital Markets. All these are free, hence I hope not only members of the public but schools can also utilise these resources to create early awareness on investment among our students.

In summary, there is much help available when it comes to investment education. Allow me to emphasise again that investment should be about sustainable wealth creation, not destructive speculations nor quick to get rich schemes. There are no shortcuts, but once you have gained enough knowledge, then your investment journey can be fruitful and fulfilling.

Once again congratulations to SC and all parties involved for the successful 10th series of the InvestSmart Fest.

Thank you for your attention.