Key Insights for MISI Sentiments…1
n The overall sentiments of Malaysia investors continued its vacillation in the current quarter, touching a low of
+47 pts in Q4’14 (compared to +48 pts in Q4’13, +58 pts in Q1’14, +48 pts in Q2’14 and +55 pts in Q3’14).
n Apart from cash and mutual fund/ unit trusts, investors’ opinion on fixed income investment, stocks/ equities and
real estates have become less favorable.
n In early January 2015, Malaysia’s ringgit fell to the lowest level in more than five years as a slump in crude
prices damped the net oil exporter’s economic outlook. It will be the sole loser among emerging Asian
economies from the drop in crude prices as 30% of state revenues are oil-related. The nation’s gross domestic product was forecasted to increase 5.5% to 6% in 2014, and 5% and 6% in 2015, the finance ministry said in its 2014/2015 economic report released in October1.
n Malaysia investors’ sentiment towards fixed income investment showed a drop from +43 pts in previous
quarter to +32 pts in current quarter. Perception on investment in stocks/ equities similarly plummeted, falling from +43 pts in Q3’14 to +26 pts in Q4’14. The proportion of investors who felt it is favorable to buy this asset class dropping significantly from 59% to 43% in the same period.
n Despite industry view is that bond investors do not need to panic2; the fact is investors’ sentiment dropped with
the percentage of investors who believed that it is a good time to invest in this asset declining significantly from 57% to 44%.
n Investors’ enthusiasm towards properties has dimmed, with sentiment towards primary residence and other
real estate properties declining in the current quarter (to +51 pts and +55 pts respectively).
n A survey by the Real Estate and Housing Developers' Association Malaysia also painted a grim picture. The
survey found 35% of respondents are pessimistic about prospects for Malaysia's housing market for the second half of 2014, while 46% are pessimistic about the first half of 20153.
SOURCE :
1. http://www.businessweek.com/news/2015-01-05/ringgit-falls-to-lowest-since-2009-as-oil-drop-damps-outlook
2. http://www.fundsupermart.com.my/main/research/viewHTML.tpl?articleNo=5357
Key Insights for MISI Sentiments…2
n Malaysia investors have generally turned pessimistic on almost all markets except for Asia themes (Emerging
or Developed Asia) or Greater China. Sentiment on local market has declined (+42 pts in Q3’14 and +36 pts in Q4’14), although it is still the market most investors are interested in in 2015 (24%). Other popular investment choices for 2015 are Developed markets (11%) and United States (8%).
n While US is being seen on strong recovery, MY investors were gloomy about the investment environment for the
market in Q4. Yet, despite the huge sentiment drop for US, still some MY investors nominated the market as the one they are most interested in investing in 2015.
n The main reasons investors selected the particular market (incl. home market) to invest in are due to family/
friends’ recommendation and potentially better returns than other markets.
Key Insights for Personal Sentiments… 1
n Across different aspects of life surveyed (incl. marriage/ family relationship, social relationship, health, work/
life balance, living condition/ environment, job/ career/ own business, financial situation), Malaysia investors are currently MOST happy/ satisfied with their marriage/ family relationship while LEAST happy/ satisfied with their financial situation (even among those who are satisfied with the performance of their investment in 2014).
n Investors have various chief financial concerns, “managing or maintaining current lifestyle”, is commonly rated by
a quarter of the investors (across age or gender groups) as the chief concern they have. To the older investors (those 35 or above), being able to afford high quality healthcare is also one of the top concerns mentioned; while for those aged 35 to 49, it is “saving or paying for child(ren)’s higher education”.
n No matter which chief financial concern investors has, many have set “save more” or “manage better my
expenses” as their top financial priority for 2015.
n Although investors are least satisfied with their financial aspect, they are appreciative and optimistic of their
financial situation.
n 49% of Malaysia investors said they are currently better off financially than 2 years ago, compared to 10% who
perceived themselves to be worse off. A similar percentage of investors (52%) believed their financial position will improve in 2 years time, while 10% felt that it will worsen.
n Besides, almost half of the investors (47%) expressed satisfaction with their investment performance in 2014
while a similar proportion (48%) are ambivalent. 38% of investors are satisfied with the performance in the last 5 years.
n Portfolio performance satisfaction is commonly attributed to proper rebalancing of portfolio, receiving
professional financial advice (esp. among the younger investors below 35 and stock investors) and unexpected market events that raised investment returns.
n Among the 5% of investors who expressed dissatisfaction with their investment performance, half said
Key Insights for Personal Sentiments… 2
n In 2015, Malaysia investors expect their investment to give an average return of 10%.
n Reflecting their cautious sentiment, cash is predicted by one third of investors, particularly females, to be the top
performer in 2015. One-fifth of investors expect property to lead, followed by REITS.
n Hence cash is the asset class that most investors (44%) plan to hold more of in the next 6 months, followed by
increased holdings in REITs (30%) and property for investment purpose (25%). Mutual fund also has 26% of investors indicated that ]they will invest more.
n On average, Malaysia investors are saving 14.3% of their monthly personal income, and they have named
saving more as their top financial priority in 2015.
n Almost 6 in 10 investors (57%) said they save in case of contingency/ emergency. Other popular reasons for
saving include for future medical expenses (42%), for retirement (37%) and for children’s education (34%).
n There is no common factor that will cause Malaysia investors to determine the time of retirement.
n About one-fifth will each do so when they want to spend more time with their family or when they want to enjoy a
leisurely life, while 15% of investors will retire when their health does not allow them to continue working.
n Only 12% named “enough funding” as the thing to determine when it’s time to retire.
n Both “household expenses (utility, food, etc.) and “health and medical” are seen by investors to be their biggest
Key Insights for Generational Differences… 1
n Comparing with their parents’ generation, Malaysia investors perceived themselves to be better off; and they
are equally positive about their next generation.
n Financial situation (57% better than their parents’ generation, only 8% worse)
n They are also positive about the next generation’s financial situation, with 55% of investors believing that
it will be better off than theirs.
n A quarter of the parents are already saving for their children’s future use (excl. education) as they see it
either their responsibility as parents to save for their children (45%) or so that they want their children to have a more comfortable life (41%).
n A bigger proportion of the parents are not saving for their children’s future use. The 2 most common
reasons cited are that “their children will have a better job and earn more” (37%) and they “will leave what they have as estate” (31%).
n Job security (52% better their parents’ generation, 7% worse)
n Job security is rather low on investors’ concern for work. Instead, earning potential (36%) and to a lesser
extent pay equality (18%) are.
n Therefore, among those who have switched employment in the past, unsatisfactory earnings/ poor
employee benefits is the top reason (esp. among those below 35). Other than that, job change could be triggered by “wanting to have a change/ try a new career” or “dislike the nature of the work/ not happy with the boss/ colleagues).
n Nearly two-thirds of surveyed investors have changed job in the past. While investors have worked an
average of 18 years (with males working longer), they have switched employment an average of 2 times. No doubt, the average tenure for the younger (below 35) is shorter (av. 6.2 years per job) than the older (35 and above, av. 8.8 years per job)
n Investors are also sanguine about the next generation’s job security, with half of them expecting it to be
Key Insights for Generational Differences… 2
n Comparing with their parents’ generation, Malaysia investors perceived themselves to be better off in terms of:
n Quality of life in retirement (57% better, 7% worse)
n Reasons why investors felt the quality of life in retirement has improved compared to parents’ generation
are mainly due to improved living condition, better financial situation vis-à-vis their parents, and improved medical system.
n For the minority who perceived it has deteriorated, the most mentioned reason is the high cost of living. n The proportion of investors who said the next generation’s quality of life in retirement will be better than
theirs (60%) is much larger than those who felt it will be worse (9%). The 2 most common reasons given for the former are “improved living condition” and “better financial situation compared to them”, while “living cost too high” is the most mentioned reason for the latter.
