KUALA LUMPUR: Malaysia continues to be the most preferred market for retail investors to invest in this year, according to the 2022 CGS-CIMB retail investors’ sentiment survey.
The survey, which was conducted from June 13-22 and included some 1,068 Malaysian participants, revealed that 63% of the retail investors picked Malaysia as their most preferred market to invest in.
“Based on the score derived from the ranking placed by respondents, the final score on the most preferred market for exposure in equities were Malaysia, the United States, Singapore, Hong Kong/China, Indonesia, Thailand and others,” CGS-CIMB said.
The survey also indicated that higher income investors are keener to invest overseas, in particular the United States, Hong Kong/China and Singapore markets, because they look to diversify and search for better returns on their investments.
“We saw rising preference to invest in US, Hong Kong/China and Singapore markets. Investors that choose the United States as their most preferred market rose to 21% from 16% in 2021.
“Another 8.1% revealed that Hong Kong/China is their most preferred market to invest in now,” it said.
For Malaysia, the survey showed that retail investors’ share of trade fell from its peak of 37% in 2021 to 27% in the first half of this year (1H22).
“Likewise, their net buy flow for equities has fallen 79% year-on-year to RM1.7bil in 1H22 from RM8.2bil in 1H21.
“They are currently the second-largest participants behind institutional investors’ share of trade of 47% but ahead of foreign investors’ 26% share of trades in 1H22,” CGS-CIMB said.
Most retail investors surveyed remained net buyers in the market over the past 12 months.
The survey noted that retail investors surveyed were bearish about the market outlook for the next six months, with 47% expecting it to post negative returns.
That said, the majority of the respondents expected lower return form the stock market of 0%-10% this year as compared to 11%-20% a year ago.
The respondents’ top three concerns for the equity market were the state of the domestic economy, sharp fall in stocks as well as external factors including rising interest rates and a crash in the US market.
Nonetheless, the survey gathered three big catalysts that could prompt investors to buy more equities – a sharp fall in the stock market that could push stock valuations to attractive levels, stronger economic growth and a more stable political landscape.
In particular, the survey showed that respondents preferred to invest directly in the Malaysian equity market and appeared less keen on unit trust products and robo-advisers compared to a year ago.
“The key motivation for investing in equities is to achieve higher returns from their savings and their preferred trading strategies continue to be buy and hold,” it said.