Youth Capital Market Survey – A Malaysian Perspective

INTRODUCTION

The Securities Commission Malaysia (SC) leverages behavioral insights to improve its regulatory outcomes, policy adjustments, and investor empowerment initiatives. Currently, there is a perceived lack of participation by Malaysian youth in the capital market. Thus, this research was conducted to provide insight into youths’ participation in the capital market. The findings will be used to guide the SC’s direction moving forward.

RESEARCH OBJECTIVES

KEY OBSERVATIONS AND FINDINGS

Majority of Malaysian youths’ income is spent on food, household expenses, and debt repayment leaving them with not much left for savings or investment.
The pressure to keep up with appearance is apparent across segments. Controlling their expenses e.g. putting a limit on eating out, shopping, and travel makes them feel that they are unable to enjoy the fruits of their labour.
The lower-income segment feels financially stressed. They feel that they do not have sufficient surplus for investment after they have set aside cash for emergencies. Conversely, those with a higher income feel more inclined to invest their additional funds.
Respondents prioritise setting aside their income for emergencies and for expenses on children/family
Youths generally are unable to manage their finances well.
Before deciding to invest, respondents will consider if they have sufficient money at their disposal. Other considerations are advice/recommendations from friends and family/colleagues.

Youth awareness of capital market products

Overall the respondents were more aware of non-capital market product such as insurance, Tabung Haji, and fixed deposits, compared to capital market products. On respondents’ awareness of capital market products, unit trust and stock/shares were the highest at 86% and 65% respectively.

FACTORS CONSIDERED BEFORE INVESTING

Respondents considered several factors prior to investing, such as being aware of how much money was available for them to invest, advice/recommendations from friends and family, including the potential returns of the investment. This shows that those with low disposable income would find it more difficult to set aside money for investment, especially when paired with risk concerns.

YOUTH'S PRIORITIES

Building wealth and investment was only a priority for one-third of the sampled population. The others viewed having emergency funds, savings to support family, and paying off debts as their priorities. Therefore, respondents would use their income towards emergency funds and savings earlier in life and would only focus on retirement at a later stage.

YOUTH’S PERCEPTION TOWARDS RISK

When respondents were asked on the level of risk that they were willing to take for their ideal investment, only 3% considered themselves to have a high-risk appetite.

Have a High risk appetite

Have a Medium to Low risk appetite

On capital market products and their associated risks, respondents viewed investment in Amanah Saham Bumiputera (ASB) as low-risk. In comparison, 70% of the respondents perceived stock/shares to be high-risk. Overall observations suggested that respondents perceived the capital market products as high-risk and this perception was consistent across the demographic.

PREFERRED LEARNING METHOD

In terms of the preferred learning method, 51% preferred financial investment talks. Additionally respondents also preferred online method such as social media and websites, compared to traditional media such as newspapers and magazines.

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