The brokerage industry and related companies are currently under pressure to embrace the behavioural changes of both retail and institutional investors. On the retail side, consumers are spoilt for choice as they have greater access to more information, sometimes at a quicker pace than analysts can provide.
On the other hand, institutional investors are being pushed to make decisions at a quicker pace in the face of ever-changing geo-political and global economic issues, while trying their best to enhance the value of their portfolios.
Business Today sat down with CGS-CIMB Securities (CGS-CIMB) CEO Designate Azizah Mohd Yatim, who touched on some of these challenges and explained the actions that the company plans to implement in the future. One of the main areas discussed includes the potential for investors and companies in Malaysia to seek funding from overseas sources.
“Due to our presence in the ASEAN market, we hope to promote our local companies to overseas investors,” said Azizah Mohd Yatim, adding that measures could be taken to promote semiconductor and conglomerate stocks.
Overall, Malaysia has enjoyed a relatively stable investing environment. Azizah believes the local banking sector can resist the global financial headwinds caused by the collapse of the First Republic Bank, Silicon Valley Bank and Signature Bank Of New York. According to her, local banks hold strong deposit bases and are well capitalised.
Banks have been able to grow their deposits from domestic sources as well as from foreign direct investors investing into Malaysia. Although Malaysia’s OPR has been rising, Azizah said this is not as bad as economic growth has picked up strongly post the Covid-19 pandemic. Even with the rise to 3%, she believes the monetary environment is better than in 1997 or 1998 as the liquidity conditions are accommodative.
Relating this to Malaysia’s GDP growth for 2023, Azizah said most research houses are looking at a rate of around 4% to 5%, which is half of last year’s at around 8.7%.
Narrowing down on the stock market, she said it is very important for well-governed companies to be listed, as this will help safeguard the interests of the retailers and institutional clients. A good corporate governance system, coupled with reputable and experienced people to manage a company is equally vital.
With regards to products, CGS-CIMB has local and global equities, futures and contracts for difference, equity derivatives and, not forgetting its nascent fund management, a unique combination that facilitates cross selling.
Azizah also said that CGS-CIMB has shareholders’ funds totalling RM1.6 billion and a MARC (Malaysian Rating Corporation) AA flat credit rating. CGS-CIMB is also ranked the no. 1 broker on Bursa Malaysia (Bursa) by market share in 2022, and has 30 branches throughout Malaysia and total staff and remisier strength of 900. It is therefore one of the largest stockbrokers in Malaysia.
“We are going to have unit trust and money market fund products. We will have more products by the end of the year,” she said.
Regarding sustainability, Azizah said it is important to stay connected with clients and offer better products to transform the market to be more ESG-centric. ESG research is another way to educate clients on how to pick and choose a good product.
Towards this end, CGS-CIMB furthers the effort of sustainability through its trading labs in several local universities, notably, University Teknologi MARA in Segamat Johor, Puncak Alam, Shah Alam, University Malaysia Terengganu and the Multimedia University in Melaka. These labs start the students early on financial literacy by teaching them how to make sound investments.
Even now, CGS-CIMB is discussing with Bursa to make available fractional shares locally. Azizah believes fractional shares will be a great source of education for the younger generation as well as open the market to more investors. Fractional shares allow the retailers to buy and sell shares listed on Bursa in micro units, less than the standard lot size.
Being the newly appointed chief executive officer designate of CGS-CIMB Securities, Azizah brings over 30 years of experience from the financial industry, having served as New Clients & Business Development at Maybank Investment Bank Head and prior to that she was with KAF Equities as Executive Director (Head of Dealing). She was also Non-Executive Director with KAF Equities & Non-Independent Director of Philip Capital Management.
