The three biggest catalysts that could prompt retail investors to buy more equities are a sharp fall in the stock market pushing stocks’ valuations to attractive level, stronger-than-expected economic growth, and a more stable political landscape, according to a survey of retail investors carried out by CGS-CIMB
He said that the three biggest concerns are the domestic economy, sharp falls in stocks/markets, and external factors (crash in US market, rising interest rates).
The findings were based on the third edition of its annual retail investors’ sentiment survey in June 2022. A total of 1,068 Malaysian retail investors responded to our survey request, which was carried out from 13 to 22 June 2022 (a 10-day period). The survey’s aim was to better understand Malaysian retail investors’ preferences, views, and investment strategies.
It said that respondents continue to state their preference to invest directly in the Malaysian equity market and appeared less keen on unit trust products and Robo-advisors compared to a year ago. Their preferred overseas markets are the US, China/Hong Kong and Singapore
On motivation in investing in equities, it said that the key motivation for investing in equities is to achieve a higher return from their savings and their preferred trading strategies continue to be “buy and hold”. The majority said their expected return from the stock market is 0-10% (lower vs. the previous year’s survey where the majority were targeting a return of 11-20%)
On investment decisions, it said that retail investors made their investment decisions via their own research and follow research reports.
It said that they used a combination of fundamental and technical analysis to arrive at their stock selection with fundamental research taking a slight edge over technical
CGS-CIMB advised investors to seek shelter in defensive and high dividend-yield stocks, as well as companies that will benefit from the rate hike cycle.
