Feb 06 2007
What is it that Bursa Malaysia (KLSE: BURSA, stock-code 1818) chief executive officer Datuk Yusli does not understand about local retail investors? After blaming retail investors for not sticking their neck to the KLSE’s (Kuala Lumpur Stock Exchange) chopping board, he’s now turning to local stockbrokers for not hiring more young remisiers.
According to the Star titled “Hire more young remisiers” today, Yusli noted that the number of remisiers had been stagnant since the financial crisis in 1997/98 despite increase in stock-broking branches. He blamed the lack of retail interest on remisiers, who acted as a market intermediary, and the stockbrokers, who seemed to have stopped hiring remisiers. He further urged stockbrokers to recruit young remisiers (20 to 30 of age) to cater to the new generation of investors.
First thing first, do you think by recruiting more young sexy remisiers the retail participation in the Malaysian local bourse will increase? If the existing “experienced remisiers” do not even have the latest knowledge to advice investors on listed companies’ prospect (both technically and fundamental), do you really think the young chaps will make any difference? Do not trust what I wrote? Go and ask your remisier the earning per share (EPS) or price-earning-ratio (P/E) of any stock that came to your mind. I bet he/she couldn’t answer you such basic question. Where’s the flaw? Could it be in the lack of quality of education/training that each remisiers undergo in order to pass before granted the trading license? Supposing all the remisiers are competent enough, do you think majority of retail investors are convince of the current bullish market? If you do not agree with me, you’ve the right to think otherwise. At least Remisiers Association of Malaysia president, Sam Eng agreed with me when he said “Retail investors are still not convinced with the current rally. This is perhaps something that Bursa Malaysia needs to look into.” Eng said the bullish trend was not across the board. “Only the blue chips have gone up, not the second and third liners, which are the retailers’ preferred choice,” he added.
Couple with lower commission, you need to have really huge volume with retail investors’ participation in order to attract younger people to join the profession of remisiers. Remisiers depends heavily on retail investors – they don’t really care even if composite index reach 2,000 points tomorrow but only blue-chips were the gainers. Most of the blue-chips were transacted via stock-brokers’ dealers (instead of remisiers) who deal directly with foreign investors.
So, during such blue-chip-centric bullish market, dealers are the one who benefits the most with guaranteed fat yearly bonus. Either retail investors are super-smart nowadays not to get burnt again or they’re really out of money for further investment. Have you thought of the possibility that the nation’s economy is not in good shape that there’re no surplus in the retail investors’ pocket to invest in stocks?
Other Articles That May Interest You …
|
|
February 6th, 2007 by financetwitter
|
|
|
|
|
|
|
Comments
i agreed that most of us (if you’re able to read this blog chances are you’re trading online – stock or option) do not rely on remisiers to execute transaction … but the penetration is still low compare to U.S. due to multiple factors …
even if all of retail investors are trading online, bursa should be able to monitor the actual retail participation … either way the retails are not in the local market as expected in the current bull-run …
hence, just like what you mentioned, there’s definitely something very wrong the malaysian economy … or else yusli won’t be crying on retails investment looking at the high daily volume transaction …
cheers …
Perhaps, in this new economy, we do not require remisiers to execute our transactions at all. Hence, the lack of retail participation is of no relation to the number of remisiers we have. Anyway, I totally agreed with you that the current rally is not felt by the retail players. Certainly, there is something wrong with our economy. Well, what’s the use of 6% growth every year when most of it only concentrates in the hands of few people. Private investment is not great, still way below its level before the 1997/98 crisis.