The world of work is changing. The COVID-19 crisis has accelerated existing structural trends and caused organizations to rethink many aspects of employment. How work gets done, where and by whom is becoming more varied and fluid. As the nature of work and how we make money continues to change, this will inadvertently impact other aspects of personal finances as well.
If you’re a young Malaysian saving for retirement, your future might be less secure than you think. Even though the next decade will see one of the greatest transfers of intergenerational wealth to millennials and Gen Z, the current financial habits and behaviours of these young generations, as well as the changing nature of work, are poised to put their future savings in jeopardy.
The Existing Pension System Won’t Be Enough
ICMR’s nationwide study of millennials and Gen Z in Malaysia found that 70% of respondents anticipate changes to their work life over the next 12 months. Of this, 61% see themselves changing job modalities, be it taking up additional side hustles or part-time work, or working as a freelancer or business owner.
Figure 1: Expected job changes in the next 12 months (Data Source: ICMR)
As the number of people moving away from the traditional notion of a single full-time job increases, issues of coverage and adequacy within the existing pension system will become more serious. The old retirement wisdom of relying on traditional retirement plans might have worked for their parents and grandparents, but these won’t be enough to get millennials and Gen Z through their golden years.
The existing pension system in Malaysia is largely employer-based, with a portion of salary automatically deducted from payroll and put towards retirement savings. But as we highlighted in our previous report, gig workers, freelancers, and small business owners are not covered by the existing system, and neither does it accurately capture extra income from side hustles or other job modalities.
“I’m comfortable with freelance working arrangements, and I don’t think I’ll go back to full-time work in the future. But I’ve been looking to buy a house recently and it’s been hard to get a loan because banks don’t recognize freelance work, even though I’m getting paid consistently every month for it.”
– Hussein, 30, freelance consultant
Overcoming Present Bias For A Better Retirement
Without access to employer-based pension plans, young Malaysians will be left to take on the responsibility of planning for their own retirement. However, ICMR’s survey found that a worrying number of millennials and Gen Z do not consider retirement savings as a top priority. Instead, they are prioritising to buy a house, high-priced items, and making profits from higher investment returns.
This is in line with insights from our qualitative interviews, where only one respondent had a specific retirement financial goal in mind. For all other respondents, retirement was a vague and distant notion, or there was a belief that “things would fall into place” for retirement purposes. Many also felt they had too many present commitments and expenses to think about retirement.
Present bias makes us favor the present and discount the future – fueling problems like addiction, procrastination, impatience, immediate gratification, and poor planning (Image Source: Don McMinn)
These examples indicate a present bias when thinking about retirement, or the tendency to settle for a smaller present reward than to wait for a larger future reward. In fact, past research has shown that Malaysians only start planning for retirement after the age of 40, hence missing out on the critical long-term accumulation stage that could make a significant difference in their retirement savings.
“I lost my job in March 2020. Now I’m a Lalamove driver, and I help out at a friend’s workshop for extra income. It’s hard to think of financial goals or make any long-term plans when I’m just focused on trying to get by day-to-day. I don’t have the time or the energy to research these things, and I don’t have the funds for it.”
– Zaim, 34, Lalamove driver
Starting Early To Benefit From Lifecycle Planning
The lack of retirement adequacy among young Malaysians is concerning both on an individual level, as well as on a national policy level. The combined effects of population ageing and lack of retirement savings is multifaceted and complex, with policy implications for the labour market, productivity, as well as social and family institutions.
Fortunately, millennials and Gen Zs who have a longer time horizon can benefit from better lifecycle planning based on their own risk appetites. It is therefore crucial that individuals take the first step as early as possible in assessing their overall financial situation, and making a long-term financial and investment plan that fits their own needs and lifestyle.
What can help is to think of retirement savings as wealth accumulation instead. Building a sizable nest egg becomes more difficult later in life as one acquires more and more expenses, such as a mortgage and a family. But by starting early, saving for retirement can be a much more pleasant – and exciting – prospect. Even a small amount saved for retirement now can make a huge difference in the future.
With time on their side, millennials and Gen Z can take advantage of the power of compound interest and minimize the impact of market fluctuations on their investments. They can also make informed decisions about their career choices, education, and lifestyle, all of which can have a significant impact on their financial futures.
The more time money has to compound and grow, the more opportunity for those earnings to earn additional money. (Image Source: Ramsey Solutions)
Redesigning Retirement For The Future
As the nature of work continues to evolve in Malaysia and across the globe, it’s important for individuals to recognize the impact this can have on their personal finances, particularly in relation to retirement planning. Meanwhile, policymakers must also play their part in ensuring that the current pension system is adequate and inclusive for all Malaysians.
Ultimately, building a sustainable and secure financial future for all Malaysians requires a combination of individual action and systemic reform. By prioritizing early and comprehensive planning, as well as addressing policy gaps, we can ensure that all Malaysians have the opportunity for a comfortable and dignified retirement.
This article is part of a content series by the Institute for Capital Market Research (ICMR). Follow ICMR’s Facebook page to stay updated on behavioral tips and insights for better investing habits. To learn more about ICMR’s research on millennials and Gen Z, visit www.icmr.my or download the full report.
About the Authors
Datin Aida Jaslina Jalaludin, Head of Research, ICMRNadhirah Ibrahim, Research Analyst, ICMR
Thomson Hospital Kota Damansara (THKD) has become the first hospital in Malaysia to receive accreditation for its Core and Ambulatory – Cancer Services under the Evaluation & Quality Improvement Programme (EQuIP7) from the Australian Council on Healthcare Standards (ACHS) International.
This accreditation involves an internationally recognised evaluation process to assess and improve the quality, efficiency and effectiveness of healthcare organisations. The whole evaluation process on the hospital’s Oncology and Nuclear Medicine facility, its systems and processes were stringently managed by ACHS International’s team of experienced healthcare professionals facilitated by its licensed partner, GlobalHealth Quality and Innovation Accreditation (GHQIA). With the successful completion of audits, THKD’s cancer services proudly holds the EQuIP7 accreditation and ACHS membership for three years.
ACHS International is the third oldest accreditation body in the world and has been at the forefront of developing healthcare standards and assisting healthcare providers to implement safe and quality healthcare in Australia and overseas for nearly 50 years.
Nadiah Wan, Chief Executive Officer of Thomson Hospital Kota Damansara, expressed her delight in having achieved this milestone and was pleased with the team’s dedication to providing quality, compassionate cancer services to patients and customers, adding that the accreditation is a testament to the hospital’s commitment to continuous improvement and innovation. “I trust that being the first hospital in Malaysia to be conferred an accreditation for our Cancer Services will provide even greater peace of mind to our potential customers, patients, friends and family members when selecting a healthcare facility of choice for their treatment. We are committed to provide better service delivery, with improved outcomes and enhanced patient experience,” she further commented.
Ms Nadiah Wan, Chief Executive Officer, Thomson Hospital Kota Damansara (THKD) holds the accreditation certificate representing THKD’s achievement of being the first hospital in Malaysia to receive accreditation for its Cancer Services under the Evaluation & Quality Improvement Programme (EQuIP7) from the Australian Council on Healthcare Standards (ACHS) International
Thomson Hospital Kota Damansara is equipped with the latest and comprehensive Oncology and Nuclear Medicine facility which provides both diagnostic and therapeutic capabilities for cancer patients. Its oncology facility also proudly houses the Mediso AnyScan SPECT/CT/PET, the first Tri-modality nuclear medicine imaging equipment in the Asia Pacific region.
“At Thomson Hospital, our promise to our patients is that we will walk with you on your road to recovery. We are confident that this accreditation by ACHS will give further assurance to our cancer patients through our cancer services. We are committed to providing our valued patients the best care throughout their cancer journey; from diagnosis to treatment and during recovery, and aim for better health outcomes through our cancer services,” said Dr. Tan Chih Kiang, Consultant Clinical Oncologist and Head of Clinical Oncology.
Adding on, Dr. Zool Hilmi Bin Awang, Consultant Nuclear Medicine Physician and Head of Nuclear Medicine, said, “We are pleased to be one of the pioneers to offer this Mediso AnyScan SPECT/CT/PET. Thomson Hospital Kota Damansara is constantly innovating to provide the latest diagnostic and therapeutic services for their patients. Nuclear Medicine therapies such as Yittrium-90, Lutetium-177, Ac-225 and high dose I-131 Therapy are in the pipeline, while radiotherapy and radiosurgery services will be further sub-specialised into gynaecology, haematology and paediatric treatments. We also plan on collaborating with other healthcare institutions in Malaysia and other countries in making cancer therapies accessible to them.”
Participating in accreditation processes demonstrates Thomson Hospital Kota Damansara’s commitment to a lifelong journey to attain continuous quality and safety improvements guided by rigorous international standards. ACHS International assessors are highly trained and come from healthcare organisations from Australia and around the world. The assessment process is conducted using the EQuIP Assessment Methodology which utilises a robust structure of cross-referencing, observation and information gathering.
“Thomson Hospital Kota Damansara should be proud of this achievement and the ongoing commitment it has made to continuous quality improvement to provide safe healthcare services to its patients, staff, and community,” said Louise Cuskelly, Executive Director, ACHS International and Consulting.
Also sharing his thoughts was Varun Panjwani, Group CEO of Global Health saying, “GHQIA partners on the quality improvement and accreditation readiness journey, selecting associates with a shared vision and dedication. We are thrilled to work with Thomson Hospital, where everyone embodies the spirit of excellence and exhibits a passion for their patients.”
About Thomson Hospital Kota Damansara
Established in 2008, Thomson Hospital Kota Damansara (THKD), is the flagship hospital of TMC Life Sciences Berhad (TMCLS) located in a prime alcove of Kota Damansara, Selangor. THKD is expected to grow to a 559-bedded hospital with additional specialist centres and an operating theatre as part of the Group’s expansion plan. THKD sets new standards in healthcare through comprehensive facilities and excellent service for both our local and international patients. The Hospital offers medical and surgical services from over 120 reputable specialist consultants covering more than 53 medical and surgical sub-specialties. For more information, please visit thomsonhospitals.com or follow THKD on social media platforms @thomsonhospitalKD.
It is rare to come across a book whose title comes in one word. Many books have titles and subtitles that are too many words. Many such books, in the hope of crafting an exciting title to captivate readers, end up just too long. However, there is one book on the market now of which the title is just one word, and it is powerful and sufficient.
MOTHERHOOD is a compilation by Jermaine Li Yuen of the sharing of 72 mothers describing their experiences of what motherhood is all about. Each sharing is brief and concise with a range from 200 to 300 words which makes easy reading.
This book is dedicated to all mothers and mothers-to-be. Jermaine believes that the real-life stories shared in this book can inspire, motivate and give hope to all mothers in their journey of motherhood. The book is well illustrated by Alison Lim, with each write-up with a family photo of the mother and her children converted into a photo illustration format.
The good thing about a photo illustration compared to the actual photo image is that it would not take the attention away from the write-up’s content. The calligraphed name of each mother at the end of the write-up is elegantly done by Gladys Yowono.
The book’s content is as attractive as its layout, illustration, and calligraphy. The sharing of the insights of each mother comes with varied experiences. As much as there are differences in their journey of motherhood, there is also the common joy, pain, thrill, and chaos experienced by each mother.
Having read this book I personally understand for the first time much clearer what motherhood is all about and the sacrifice a mother has to go through to bring a newborn to this world and nurture him or her with tender loving care all the way. This is certainly a valuable book worth reading every page.
The review of this book would not do any justice if I do not share an extract of a two-liner from the book shared by the mothers. It is certainly not easy to pick 5 from the 72 equally interesting ones. So, I chose them based on the 5 criteria on being dramatic, hilarious, meaningful, touching and inspiring.
Dramatic
“A journey of endless possibilities, like having your finger clipped in between the door hinge because your kid got excited and slammed the door while you were trying to grab some ointment to apply on his chest, and before you know it, you are lying on the hospital bed being dragged into the operating theatre because your finger tendon tore.”
-Jermaine Li Yuen, Co-Founder of The Ark and Arkmosphere, Mother of 3
Hilarious
“Motherhood is nights of breastfeeding while your 11 months old baby boy kicks you relentlessly at your caesarean wound as you suffer quietly in pain. Motherhood is watching your husband sleep and snore next to you as you enviously wish how good it is to be a man instead.”
– Mei Xin, Corporate Banker, Mother of 1
Meaningful
“Having a child is a gift from God and it is moments like this that you know somewhat God’s love and patience is with us. I thank God daily for this gift and what my son has taught me about motherhood, patience and humility.”
-Freda Lu, Broadcaster/Author/Emcee/Speaker, Mother of 1
Touching
“To me, motherhood is not about winning a popularity contest. If I had come across as a naggy mother, it is because my love knows no bounds. I remember whenever my children had a fever, I would nurse them throughout the night till they recovered. I will do whatever it takes to ensure their safety and well-being.”
– Juliet Bee, Marketing Director, Mother of 3
Inspiring
One day, a therapist told me something that changed my parenting approach. She said, “connect instead of correct”. Wow! Simple yet powerful. She explained that when spending time with our children, it is better to connect by talking and listening to them about everyday stuff rather than giving instructions and correcting their behaviour (e.g., constantly saying don’t shout, don’t run, don’t touch).
– Emelia Thiran, Artist & Art Educator, Mother of 2
The above two liners excerpts are too short and certainly have shortchanged the value of the full write-up and likewise for the other mothers’ sharing which are not extracted here. So, my recommendation: go get this book and read these great insights from these wonderful mothers.
I promise it will take you through the whole gamut of human emotions. This book is not just for mothers; in fact, everyone should read Motherhood to understand what a mother has to go through to bring all of us up and alive.
Dr Victor SL Tan is the CEO of KL Strategic Change Consulting Group and an international change management consultant. He is the author of 15 books, including management books and biographies. His work has been widely recognized and has recently won 2 awards from The BrandLaureate International for the company and consultant that made the most positive and productive impact for corporations. He can be contacted at 012-3903168 or by email at victorsltan@klscc.com.
A report by the Department of Statistics Malaysia (DOSM) in 2019 showed that 390,000 out of 560,000 SPM candidates were interested in joining the workforce immediately after the exam, while only 170,000 students were interested in continuing their studies. The three main factors why youths aged 17 to 18 did not want to continue their studies were:
The belief that furthering their studies did not guarantee better-paying jobs;
The availability of job opportunities in the gig economy, and;
The interest to become influencers on social media.
Such is the sad state that this worrying trend is set to continue over the years. This could potentially impact Malaysia’s future supply of skilled labour, hindering its progress toward becoming a high-tech nation.
But on the other end of the spectrum, the Malaysian government has adopted aggressive measures aimed at internationalising its higher education system, a process it hopes will improve the sector’s dynamism and make it more responsive to the demands of a knowledge-driven world economy. In 2012, the higher education ministry established Education Malaysia Global Services (EMGS) to promote Malaysia as an international education hub and facilitate the movement of international students into the country.
Offering a degree that is well-recognised globally, Malaysian universities rank in the world’s top universities, with a total of 13 in the top 600, according to QS World University Rankings. Based on QS World University Rankings by Subject 2022, 10 Malaysian programmes were placed among the top 50 universities for studying their academic subject.
As a result, Malaysia was the 13th-largest destination for international students in the world in 2020. According to the UNESCO Institute of Statistics (UIS), in 2020, Malaysia hosted 89,193 international degree-seeking students.
Smart Investor talked to several industry experts to learn more about the state of Malaysia’s education among the youth and their level of financial literacy.
The State Of Malaysia’s Education And Financial Literacy Among The Youths
Raja Edriana Baizura, head of career services at Taylor’s University
“Education at the very base of it is required for everybody. Having an education will lay the foundation that the youths of today require to be better shapers of tomorrow for society to live in,” said Raja Edriana Baizura, head of career services at Taylor’s University.
“It is said that education and knowledge are two different things. Knowledge is what one knows, and education is how one learns it. Knowledge can be gained by the environment we are exposed to while growing up, while education is acquired knowledge from teaching and learning,” she added.
Terence Ooi, the co-founder of Wiki Impact
“Being in Asian culture, the value of structured education has not diminished. In fact, those who can afford it would be looking for alternatives for their children to receive a better education than what is being offered mainstream. The pressure of getting straight A’s is still there as it is perceived that this would be a stepping stone to tertiary education and progress in life,” echoed Terence Ooi, the co-founder of Wiki Impact.
“In the past, a heavy emphasis was on getting higher education to secure a high-paying job. However, current perceptions about having a traditional 9-to-6 job have shifted as youths are more inclined to look for alternative sources of income, such as trading or even growing and monetising their social media. While general sentiments are that higher education may aid one’s chances in securing a better job, the key is to find your niche,” stated Yeap Jun Rong, a market strategist at IG International.
Haida Tahir, Director of Contingent Workforce Central, PERSOLKELLY Malaysia
“Today’s job landscape is so competitive, and while education does not guarantee a high-paying job or that you will land your dream career, it is a fundamental requirement. Nonetheless, it is undeniable that higher education leads to better job prospects in the long-term. Beyond furthering your studies, continuous learning is also very important, more so now as technological advancements shift the demands of what an organisation requires from talents,” shared Haida Tahir, the director of contingent workforce central at PERSOLKELLY Malaysia.
Dr Sanjay Sarma, CEO, president and dean of Asia School of Business (ASB)
“I have never met a young person disinterested in learning. Curiosity is the most fundamental aspect of learning, and it is impossible to extinguish. I have, however, met many people who are disaffected with how we teach,” explained Dr Sanjay Sarma, CEO, president, and dean of Asia School of Business (ASB).
“At ASB, we are all about action – and I believe classrooms need to have a more engaging, thought-provoking nature for the next generation to be prepared,” he added.
The emergence of new methods of teaching and learning platforms, such as self-learning through learning management systems (LMS), has given students the ease of studying at their own pace. This minimises the effects of constraints they have when pursuing their education and their opportunity cost. They are becoming smarter and gaining skills faster than their predecessors, all at the same time.
For example, Udemy is an online learning platform founded in 2010. According to the company’s website, Udemy has over 155,000 courses taught by over 70,000 instructors and has served over 50 million students worldwide as of 2021. In terms of growth, Udemy has seen significant expansion over the years. In 2016, Udemy reported that it had over 11 million students enrolled in its courses, and by 2019, the number had grown to over 50 million.
The number of courses on the platform has also grown significantly, from around 30,000 in 2016 to over 155,000 in 2021.
Johary Mustapha, founder and CEO of Forest Interactive
“Through our foundation arm, Forest Interactive Foundation (FIF), we are trying to bridge this gap by developing future innovators in tech. Our FIF programmes upskills young entrepreneurs and students alike by curating a robust tech-focused hands-on curriculum needed to solve the digital skills shortage and increase the overall employability rate within the country,” said Johary Mustapha, founder and CEO of Forest Interactive.
Nisa Saharuddin, the community engagement lead, Forest Interactive Foundation
“Through our various programmes, we provide the younger generation with a varied skill set to help them stay relevant with the progressing economy. Our #SeKODlah programme, partnered with corporations like CIMB Bank and CIMB Foundation, would enable the future Malaysian workforce to explore and develop in-demand skills through e-learning and mentorship. If we are to meet the ever-increasing demand of the economy, it must be a collective gesture of both the private and public sectors,” shared Nisa Saharuddin, the community engagement lead at FIF.
Education is and always will be important. However, the dynamics of learning have changed. Evidently, the younger generation places less value on traditional education as, from their viewpoint, there are multiple ways of achieving economic growth.
Are The Youths Of Today More Financially Savvy?
Bankruptcy cases are a telling point of where we stand regarding financial literacy. The number of bankruptcy cases seems to be declining, but let’s not forget that our government amended the Insolvency Act 1967 in 2017, raising the bankruptcy threshold from RM30,000 to RM50,000. This was followed by another amendment, raising it from RM50,000 to RM100,000.
Personal loans are the highest cause of bankruptcy among Malaysians, contributing almost 42%, followed by hire purchase loans at almost 15%. Another worrying sign is the high number of cases in the 25 to 34-year-old age group, which makes up more than 21%, with the highest being in the 35 to 44-year-old age group, with more than 37%.
“As information is readily available on the internet, consuming the right information to be financially savvy is important. Not many know how to save or start investing early but those who have early exposure to financial literacy will or may start saving and investing earlier in life,” said Edriana.
“From my observation, they are generally still quite largely ignorant. Many are still unaware of basic investment options and opportunities. However, if compared to generations of the past, they do have greater access to resources on financial tips and investments – thus if you compare apple to apple, they are in a greater state,” added Ooi.
“They are more aware and practical of their financial capacity, so it’s a yes – if we take the literal meaning of financially savvy. However, long-term planning is also important, and that depends on a case-by-case basis,” opined Johary.
Where Do The Youths Invest?
The Institute for Capital Market Research Malaysia (ICMR) recently conducted a nationwide study to better understand their issues, challenges, and behaviours regarding personal finance and investing. The survey was distributed to 1,500 respondents and found that millennials and Gen Z Malaysians can be categorised into three groups, each with unique characteristics.
A higher proportion of respondents from the east coast do not invest (Group A), while Group C has a higher proportion from the Central region. More notably, there are differences in household income levels between all three groups. While 69% of Group A earns less than RM5,000 in monthly household income, 56% of Group B earns between RM3,000 to RM7,000.
Meanwhile, respondents who fall under Group C were found to have significantly higher incomes, with 31% having household incomes above RM10,000.
Financial Literacy And Risk Tolerance
ICMR’s research suggests a link between financial knowledge, financial confidence, and risk tolerance with the likelihood of investing and the products invested in. For instance, someone who does not know much about financial matters and has little financial confidence would also be unwilling to take risks – hence not investing and falling into Group A.
This could also explain behavioural differences between Group B, which invests only in ASNB funds or unit trust products, and Group C, which invests in other capital market products. The first unit trust company in Malaysia was set up in 1959. This might be why retail investors are most comfortable with unit trust products, considering their long history in Malaysia.
Additionally, many investors who only invest in ASNB funds or unit trust products (Group B) tend to be less risk tolerant and financially confident. In contrast, those who invest in other capital market products like shares or cryptocurrency, which are perceived to be riskier, tend to have higher risk tolerance levels and feel more financially confident.
“Based on our data at IG International, with the recent volatility, youths are more inclined to trade major US indices and forex. The Dow Jones Industrial Average and Nasdaq 100 are popular choices. Since the Covid-19 trading boom, youths continue to have their feet in the game in terms of trading,” shared Yeap.
Jason Low, Co-founder and CEO, Virtualtech Frontier (VTF)
“In addition to the stock market, young people are also investing in alternative assets such as cryptocurrency, NFT’s, and real estate. Cryptocurrency has become increasingly popular among younger generations, with platforms like Coinbase and Binance providing an easy way to buy and sell various cryptocurrencies. Real estate investing has also gained popularity among young people, with crowdfunding platforms like Fundrise and RealtyMogul allowing investors to pool their money together and invest in commercial real estate,” explained Jason Low, co-founder, and CEO of Virtualtech Frontier (VTF).
“Personally, I have seen students who invest in the stock market or even trading to make their money ‘grow’ even as early as their first year of university. We invite speakers from the industry to introduce topics such as financial literacy to students in their final year during Professional Development Week, where they learn the importance of being financially savvy,” added Edriana.
“Most young people I know are investing in insurance and crypto. This is perhaps the access they have to either opening the accounts or someone within the industry educating them,” said Ooi.
“Some common options for youth to invest in are NFTS, cryptocurrency, stocks, fixed deposits, and real estate. Stocks are popular with those looking for higher returns and are willing to take more risk while fixed deposits are a more conservative option that offer guaranteed returns. Real estate is also popular for those who are looking for long-term investment with the potential for appreciation,” mentioned Johary.
The State Of Malaysia’s Education And Financial Literacy Among The Youths Summary
In short, youths of today are more financially savvy than previous generations. But it is important for them to educate themselves about personal finance and investing and seek advice and guidance from trusted sources.
Get your latest copy of Smart Investor Magazine HERE!
Investing in stocks can be a challenging task, especially for beginners. With so much information available, it can be overwhelming to determine which stocks to buy and which ones to avoid. Here are 5 financial ratios to quickly analyse stocks. It is an effective tool that can help investors make informed decisions when analyzing stocks.
These ratios provide insight into a company’s financial health, growth potential, and profitability, allowing investors to assess its investment potential.
In this article, we will explore the different types of financial ratios and how they can be used to analyze stocks, providing you with a quick and efficient way to evaluate investment opportunities.
EPS is one of the financial ratios to quickly analyse stocks. According to Investopedia, earnings per share (EPS) is a company’s net profit divided by the number of common shares it has outstanding.
Company’s EPS vary based on changes in earnings, total number of outstanding shares, or both. A company can increase its EPS by increasing its earnings or reducing its number of shares through share buybacks.
Typically, company with high EPS are considered as a profitable company. Usually, we can find EPS value in a company’s income statement.
P/E ratio is one of the financial ratios to quickly analyse stocks. PE ratio measures the relationship between a company’s stock price and its earnings per issued share. Sometimes it is also known as the earnings multiple.
Since the P/E ratio relates to the share price and earnings per share, some investors prefer stocks with lower P/E. However, a high PE does not mean the share price is overvalued. A company can have a high P/E because investors expect high future growth and thus buy it from now. This causes the price has started to increase due to high demand.
Tips for you, always compare a company to other in the same industry. Some of you may wonder, what about companies without P/E ratio? Companies that have no earnings or are losing money does not have a P/E ratio.
3. Return On Equity (ROE)
Return on Equity shows how well a company uses shareholders investment funds to generate income. ROE is calculated by comparing the proportion of net income against the amount of shareholder’s equity.
Investors love high ROE stocks because it shows the company is good at converting its equity financing into profits. If you are looking for a strong company with good ROE, a return on equity ratio of 15% – 20% is considered good.
This is why ROE is one of financial ratios to quickly analyse stocks, that is being used by most investors.
Net tangible asset is one of the financial ratios to quickly analyse stocks. NTA is the value of all tangible assets minus all liabilities in a business.
Some examples of net tangible assets are land, buildings, vehicles, equipment, and etc. There are few significances of NTA such as:
Have definite value
Help in production
Can be sold and thus raise cash
Subject to depreciation
Used as collateral / security
Usually, investors will compare current stock price to NTA value. It can help to determine whether a company is undervalued or overvalued. If the current share price is smaller than the NTA value, the stock is considered undervalued and vice versa.
5. Dividend Yield (DY)
Why does investors have to pay attention to dividend yield compared to dividend payout? Dividend yield displayed in percentage represents the annualized return a stock pays out in dividends.
So, what is a good dividend yield? Dividend yield ranging from 5% – 7% are generally considered to be good. Anything above 7% is considered very good.
But remember, other than high dividend yield, consistency in distributing dividend is equally important. You will not want to receive dividend for only one time.
The legendary Warren Buffet focused on dividend investing to get steady cash flow over the long-term. There are few stocks in Buffet’s portfolio that he has been holding for long period. That’s why dividend yield is one of the financial ratios to quickly analyse stocks.
However, investors also must keep in mind that high dividend yield may not attractive if the stock price is declining. What is the point of receiving dividends but you are losing more money from the declining stock price right?
Financial ratios are a powerful tool for investors to analyze stocks and make informed investment decisions. By examining a company’s financial statements and using various ratios, investors can gain valuable insights into a company’s financial health and potential for growth.
While no single ratio can provide a complete picture of a company’s financial health, using a combination of ratios can help investors make more informed decisions about which stocks to invest in. You can start your own fundamental analysis by looking at these 5 financial ratios to quickly analyse stocks.
However, it is important to remember that investing in the stock market carries risks, and no investment strategy can guarantee success. By using financial ratios as part of a larger investment strategy, investors can navigate the complexities of the stock market and work towards achieving their financial goals.
Generali Group, one of the largest global insurance providers, recently launched Generali Malaysia following the acquisition of a controlling majority in AXA Affin joint ventures in Malaysia and 100% purchase of MPI Generali Insurans Berhad. The transaction valued the acquired companies at close to RM1.29 billion (EUR 262 million), making it one of the largest M&A transactions in Malaysia in recent years.
On 1st April 2023, the businesses were integrated under a single, unified brand ― Generali Malaysia. The integration positions Generali Malaysia as one of the largest general insurers and emerging life insurer in Malaysia, broadening its edge in a competitive market.
With its strong expertise in providing comprehensive protection solutions in all areas of general insurance – medical and health, motor and home, travel and personal accident, as well as business and commercial insurance, Generali Malaysia is committed to further expand its offerings and better cater to customers’ growing needs. With a focus on protection, medical coverage, savings, and legacy planning, its Life segment offers customers coverage needs for every stage of life.
(L-R) Rebecca Tan, CEO of Generali Life Insurance Malaysia Berhad, Raymond Fam Chye Soon, Chairman, Generali Insurance Malaysia Berhad, His Excellency Massimo Rustico, Ambassador of Italy in Malaysia, Roberto Leonardi, Generali International Asia Regional Officer, Abdul Malek Bin Mohamed Said, Chief Corporate Strategy Officer, Affin Bank Group, Fabrice Benard, CEO of Generali Insurance Malaysia Berhad & Country Head for Generali entities in Malaysia
Jaime Anchustegui Melgarejo, CEO, Generali International commented, “This is a significant milestone for Generali in Malaysia and in the region. It highlights our commitment and dedication to Asia and the importance we place on Malaysia as one of the region’s high-potential growth markets.”
Roberto Leonardi, Generali International Asia Regional Officer, commented that “As a unified entity, we look forward to enhancing the Generali experience and becoming Lifetime Partners to our customers in Malaysia, as well as making a positive contribution to the communities in which we serve.”
“The launch of Generali Malaysia is to create a unified, customer-focused brand that can provide comprehensive insurance solutions across the full spectrum of products from general to life insurance. We aim to have a significant presence in the market and be one of the top general insurers in the country,” said Fabrice Benard, Chief Executive Officer, Generali Insurance Malaysia Bhd and Country Head for Generali Entities in Malaysia.
The launch is fully aligned with Generali’s ‘Lifetime Partner 24: Driving Growth’ strategy to strengthen its leadership position in Malaysia ― a country with strong potential for growth with its economic development and current low-insurance penetration. Holding a strong vision for the future, Generali Malaysia hopes to play an active role in contributing to Malaysia’s economic growth and development.
Supported by over 1,600 workforce, a wide distribution network of more than 9,000 agents, partners and distributors and 49 branches nationwide, Generali Malaysia is presented with the advantage of a larger market share in Malaysia which is further boosted with a broader range of products and services.
“As an insurer with over 190 years of insurance heritage and experience, we strive to provide better experiences as a whole, by transforming our role to go beyond selling products and to provide more value-added, personalized service in line with our ‘Lifetime Partner 24: Driving Growth’ commitment,” Benard added.
Rooted in Italy, Generali Group has a strong heritage and legacy of protection of more than 190 years. To date, Generali has presence in over 50 countries and a workforce of 82,000 employees serving 68 million customers. The Group has been active in Malaysia since 2015 when it acquired a 49% stake in Multi-Purpose Insurans Berhad – a P&C insurance subsidiary of Multi-Purpose Capital Holdings to create MPI Generali. In 2022, Generali acquired full ownership of the MPI Generali joint venture and purchased a controlling majority in AXA Affin General and Life Insurance in Malaysia. In 2023, Generali unfolded a new growth chapter with the launch of a single, unified brand Generali Malaysia ― one of the largest general insurers and emerging life insurer in Malaysia backed by over 1,600 employees, a wide distribution network of more than 9,000 agents and partners and 49 branches.
(L-R) Rebecca Tan, CEO of Generali Life Insurance Malaysia Berhad, Raymond Fam Chye Soon, Chairman, Generali Insurance Malaysia Berhad, His Excellency Massimo Rustico, Ambassador of Italy in Malaysia, Roberto Leonardi, Generali International Asia Regional Officer, Abdul Malek Bin Mohamed Said, Chief Corporate Strategy Officer, Affin Bank Group, Fabrice Benard, CEO of Generali Insurance Malaysia Berhad & Country Head for Generali entities in Malaysia
ABOUT GENERALI MALAYSIA
Generali Group is one of the largest global insurance providers with more than 190 years of heritage. The Group has been active in Malaysia since 2015 when it acquired a 49% stake in Multi-Purpose Insurans Berhad – a P&C insurance subsidiary of Multi-Purpose Capital Holdings to create MPI Generali. In 2022, Generali acquired full ownership of the MPI Generali joint venture and purchased a controlling majority in AXA Affin General and Life Insurance in Malaysia.
In 2023, Generali unfolded a new growth chapter with the launch of a single, unified brand Generali Malaysia ― one of the largest general insurers and emerging life insurer in Malaysia backed by over 1,600 employees, a wide distribution network of more than 9,000 agents and partners and 49 branches.
Now with an expanded scale, breadth, and expertise, Generali Malaysia strives to further its ambition of being a trusted Lifetime Partner and a progressive insurer that safeguards the needs of Malaysians and their future generations.
THE GENERALI GROUP
Generali is one of the largest global insurance and asset management providers. Established in 1831, it is present in over 50 countries in the world, with a total premium income of € 81.5 billion in 2022. With 82,000 employees serving 68 million customers, the Group has a leading position in Europe and a growing presence in Asia and Latin America. At the heart of Generali’s strategy is its Lifetime Partner commitment to customers, achieved through innovative and personalised solutions, best-in-class customer experience and its digitalised global distribution capabilities. The Group has fully embedded sustainability into all strategic choices, with the aim to create value for all stakeholders while building a fairer and more resilient society.
Based on the insights from DataSense, PropertyGuru’s market data and analytics platform, the report captured downward trends in the Sale Demand Index, with property enquiries decreasing by 5.6% QoQ. While inflation is projected to moderate in the coming months, global economic uncertainties have affected the appetite of Malaysian buyers for big-ticket purchases. Similarly, the Sale Supply Index saw a slight decrease of 0.6% as property owners continued the wait-and-see approach towards their investments.
Sheldon Fernandez, Country Manager, Malaysia (PropertyGuru.com.my and iProperty.com.my), shared, “With Bank Negara Malaysia’s decision to raise the Overnight Policy Rate by 25 basis points to 3%, it will be difficult to see an uptick in property demand. Potential homebuyers are likely to delay their purchasing plans because of the higher borrowing costs and rising cost of living. Currently, it is still too early to gauge how much impact this will have on the market.”
Sheldon Fernandez, Country Manager, Malaysia (PropertyGuru.com.my and iProperty.com.my)
Asking Price Continues to Rise
The MPMR Q2 2023’s Sale Price Index tracked the asking prices of properties listed on propertyguru.com.my, which increased by 1.6% QoQ in Q1 2023. Sellers are likely not keen to lower prices against the backdrop of an uncertain economic climate. The global increase in construction costs paired with recent labour shortages have also pressured developers to hike their prices to cover the increased costs.
While Malaysia is projected to see a moderately lower economic growth this year, we may see a more attractive property market as economic activities accelerate towards the second half of the year. Following the boost in investments from companies like Tesla and AWS, as well as China’s RM 170 Billion Investment Commitment, this is likely to spur job creation and push infrastructure development in Malaysia in the near future.
However, buyers are also aware of the external pressures caused by global inflation and remain cautious with their purchasing decisions, especially with the current higher borrowing costs. If property prices continue to peak with demand lagging, a global recession or economic shock could lead to a price correction. If it happens, property prices adjust accordingly to reflect the slower demand.
Trends in the Rental Market
From the report, the indexes in the rental market mirrored the trends in the property sale market, tracking a decrease in the Rental Demand Index by 6.3%. This is likely due to the substantial increase in rental prices, with the Rental Price Index rising by 4.7% QoQ. The rise in rental prices did not go unnoticed, and the Selangor state government has announced plans to look into the feasibility of expanding its Smart Rental Scheme to low-cost housing.
“The decrease in rental demand, as highlighted in our report, could reflect that Malaysians are becoming even more cautious, perhaps opting to stay with family members and commute to the city to work instead of renting their own place. Again, the wait-and-see approach continues but it may be further exacerbated by the uncertainties ahead,” states Sheldon.
As rental prices continue to rise, we are seeing increased pressure on the demand for affordable housing near job centres. More individuals are migrating towards these urban areas for convenience, but the rising prices may force them to forgo ideal living conditions. This presents a unique opportunity for developers and landlords to consider repurposing their unsold properties into co-living spaces, which offers more affordable living space by sharing costs and common areas with other residents without completely forgoing privacy.
“We are seeing cumulative issues of housing affordability, higher cost of investment, mismatch of demand and supply, and “sick” housing projects. These issues have been persistent in the local market, and unfortunately remain unsolved today. While we do see the government taking the first steps to address these issues, developers must also play their part in assessing what homebuyers need – because that’s changed overtime”, he adds.
Johor in the spotlight
To kick-start 2023, Johor takes the crown for the most-viewed residential properties in Q1 2023. The state boasts the top four most viewed condominium projects in Malaysia and had four other projects front-running in the landed properties category, with Leisure Farm maintaining its top position as the most viewed residential landed project. In the rental market, R&F Princess Cove became a popular project for those looking to rent, given its strategic location near the Johor Causeway.
Johor’s development surge is anticipated to persist, fueled by last year’s RM51.1 billion investment in data centres. As a burgeoning digital hub, Johor is attracting attention to its real estate market. The prospect of new job opportunities may entice more Malaysians to relocate to the peninsula’s southern region.
“Overall in Malaysia, the rising prices driven by global uncertainties will continue to contribute to the current housing affordability issue. As property ownership costs are expected to increase with the OPR hikes, we foresee property buyers and sellers alike will continue to navigate a challenging and unpredictable property market. However, we are cautiously optimistic that the economy will show improvement in the second half of 2023, and we will continue to look out for more positive signs of growth in the residential property market,” he concluded.
About PropertyGuru Malaysia
PropertyGuru.com.my is Malaysia’s leading property marketplace and has been guiding Malaysians in navigating their home-ownership journey since 2011. The company provides easy-to-use, property market data and actionable insights such as Property Guides, Property Market Reports and Home Loan Calculator, which enable property seekers to make confident property decisions wherever they are in their property journey. PropertyGuru Malaysia offers end-to-end solutions for Malaysian property agents (AgentNet) and developers to help achieve their business goals. These include, a high-quality developer sales enablement platform, FastKey; and a host of other property offerings including Awards, events and publications across Asia. The company is part of PropertyGuru Group (NYSE: PGRU), Southeast Asia’s leading property technology company.
A report by the Securities Commission Malaysia (SC) shows that the number of women holding board positions in the private sector stood at 29% as of 31 December 2022. Meanwhile, according to the Women, Family and Community Development Minister Datuk Seri Nancy Shukri, in the public sector, over 38.2% of women were at decision-making levels professionally, holding senior-level positions in the JUSA (Jawatan Utama Sektor Awam) category.
Smart Investor contacted Michelle Johnson, general manager of marketing and product development of Niro Ceramic Group (NCG), one of the female figures on NCG’s board of leaders. She talks to us about the insights on the importance of equal opportunity in the workplace and what companies can do to create more opportunities for women to excel in their careers.
Michelle Johnson, general manager of marketing and product development, Niro Ceramic Group
Smart Investor: As a successful woman in a leadership position, what challenges have you faced in your career, and how did you overcome them?
Michelle Johnson: As the chief of marketing at NCG, I’ve learnt that being adaptable and flexible is paramount to staying a step ahead of the marketing landscape for the tile industry. Managing a growing team of marketing professionals with varying skill sets and personalities can certainly raise a few roadblocks. However, as a leader, I’ve found that camaraderie and effective communication helps to build a strong foundation for an agile team.
SI: How can companies create a more diverse and inclusive workplace for women, particularly in a male-dominated industry?
MJ: Creating a more diverse and inclusive workplace for women in a male-dominated industry requires sustained efforts and a commitment to change. For a start, companies should nurture a strong culture of inclusivity internally. This means fostering a safe and welcoming environment that empowers employees to express their ideas, opinions, and concerns freely.
SI: What role do you think women leaders play in driving innovation and growth within a company?
MJ: Women leaders can bring diverse perspectives and experiences to the table, which helps drive innovation and creative problem-solving. With more diverse leadership, companies will have a more comprehensive understanding of their market and meet the needs of a broader range of customers and stakeholders to drive innovation and growth within a company.
SI: In your opinion, what qualities are essential for success in a leadership role?
MJ: Throughout my career, I’ve found that the quality of being inspiring is vital for success. To lead is to inspire and motivate the people around me to realise their potential and achieve greater things. I strive to inspire by setting a good example, providing actionable feedback and recognition, and nurturing a positive and inclusive work environment.
Besides that, I also find that being visionary is the key to a successful leadership role. As a leader, having a very clear vision for the future of your organisation helps materialise sizable growth opportunities. Having the ability to conceptualise and communicate that vision effectively is incredibly important.
SI: Can you tell us about a time when you had to make a difficult decision as a leader and how you navigated that situation?
MJ: As a leader, my guiding principles are honesty and integrity. These values help me make coherent decisions, even when challenging or uncomfortable. I have consistently demonstrated these values to those above me, my peers, and those under my leadership. By upholding these principles, I have earned the respect of those around me, and I remain committed to maintaining these values in all my actions and interactions.
SI: What advice would you give young women just starting their careers in marketing and product development?
MJ: Be curious and stay up-to-date with the latest industry trends. The marketing and product development fields are ever-changing for most industries. Always have the drive to learn new things by keeping up with the latest industry movements. You can start by always having a pulse on the market movements and developments by reading industry publications, attending industry events and networking with other industry professionals.
Identify and harness your strengths and focus on refining them further. It could be your eye for analytics or your creativity. Focusing on your strengths will help propel your career trajectory and stand out, especially in a saturated landscape.
The choices we make – the things we buy, the neighbourhoods we live in, the restaurants we go to – are influenced by our social networks. Our financial and investment choices are no exception. Thousands of behavioural studies have shown that community members’ and peers’ savings and investment decisions tend to have a causal effect on individual decisions.
These effects are propagated through direct social interactions such as word of mouth or, as we highlighted in our last article, through online channels, including social media platforms like TikTok and Instagram. Be it online or offline, social pressures such as the implicit desire for conformity, acceptability, and social identity can powerfully affect investment decision-making.
Trust Matters For Young People
It is not surprising that ICMR’s survey of millennials and Gen Z found that most respondents prefer online sources for information about investment products. Nonetheless, the people closest to them in real life still play a role in shaping their financial decisions. Indeed, friends and family ranked as the second most popular source of information in ICMR’s survey.
Figure 1: Sources to know about different capital market investment products owned (Data Source: ICMR)
During qualitative interviews with the respondents, one aspect that frequently came up was the importance of trust to millennials and Gen Zs. Most seek out financial advice from family and friends that they personally trust. Financially literate investors may add on their own online research, but those with lower financial literacy tended to immediately heed advice from friends they trust.
Moreover, previous studies have shown that millennials and Gen Z tend to lack trust in traditional institutions like news media and business, political, or religious leaders. Thus, it makes sense why they might turn to the people around them instead for financial or investment advice, regardless of whether their advice is actually good or bad.
“I definitely need to talk to friends before I invest, especially if they’ve also invested in the same thing. Recently, a friend told me he had cashed out his unit trust investments after making 15% gains. I will invest in that same unit trust once I have a bit more money.”
– Zaim, 34, Lalamove driver
Relatability Is A Key Driver Of Trust
The rise of social media influencers over the past decade has reshaped how younger generations form opinions, buy from brands, and get their questions answered. Financial and investment companies have leveraged the popularity of influencers through collaborations, sponsorships, and paid-for advertisements to promote their investment products and services.
Personal finance influencers are using social media platforms like TikTok and Instagram to offer financial tips, investment advice, and other information that can influence decision making
Nonetheless, ICMR notes that when it comes to personal finance, some respondents preferred talking to their peers as they found many personal finance influencers unrelatable. This was due to the perception that most personal finance influencers had financial goals that seemed unattainable, which ended up being demotivating.
Relatability is thus a critical trust driver for millennials and Gen Z investors. The notion of relatability goes deeper than relevancy by tapping into fundamental human truths: the need for belonging, to feel seen and valued, and to be accepted by a social group. In the end, people are highly social beings that are influenced by social norms and social identity when making key financial decisions.
“I stopped following influencers because they had goals like save RM100,000 before 30. I knew my savings was nowhere near there and it just demotivated me even more.” – Calvin, 29, performance marketing manager
More Talk About Money
While many old-school cultural taboos have been broken or at least softened, the stigma surrounding money talk is still prevalent today. For older generations, finances are often perceived as the final conversational frontier among friends and family members. However, ICMR found that millennials and Gen Z want to break this taboo and discuss money matters more openly.
Many of our interviewees felt that conversations among friends about money should be normalised, and that it can help each other navigate financial decisions. This is in line with other global studies, which found that millennials and Gen Z are a lot more transparent with peers about their money compared to previous generations.
Millennials and Gen Z are more openly talking about money matters with their peers compared with older generations (Image Source: MembersFirst Federal Credit Union)
Being more open and transparent about money might be the result of younger generations being less filtered about other aspects of their lives as well on social media. Yet even among close friends, it can be uncomfortable for young people to bring up topics like salary or earnings (not to mention financial hardships), especially if they were taught never to ask someone how much they make.
“I think we should normalise talking about our finances with friends. I’ve learned so much from talking with my friends. That’s how I first learned about StashAway and Luno. But I think I’ll only be comfortable talking with friends of similar income levels. It might get awkward if the other party makes a lot more or a lot less.”
– Sofia, 29, engineer
Promoting Financial Security And Independence
Understanding how social preferences can influence individual decision-making has wider societal implications. Herding behaviour, or when investors behave like their peers instead of using their own information or making independent decisions, can lead to individuals being involved in scams, being misled, or creating investment bubbles.
Young investors must learn to seek advice from various sources to gain the knowledge and confidence they need to make sound investment decisions that promote their financial security and independence. Establishing open and transparent communication about personal finances can empower the next generation to achieve their financial goals and enhance their well-being.
This article is part of a content series by the Institute for Capital Market Research (ICMR). Follow ICMR’s Facebook page to stay updated on behavioral tips and insights for better investing habits. To learn more about ICMR’s research on millennials and Gen Z, visit www.icmr.my or download the full report.
About the Authors
Datin Aida Jaslina Jalaludin, Head of Research, ICMRNadhirah Ibrahim, Research Analyst, ICMR
As a busy working professional, startup investing can be an exciting and financially rewarding journey. It also allows you to diversify your investment portfolio. Early stage startups are usually not “bankable” as they cannot fulfil banks stringent loan requirements. So raising funds by selling their shares tend to be the usual way to extend their cash runway.
As a startup lawyer, I have acted for both investors and companies seeking to raise funds using equity crowdfunding (ECF), one of the increasingly popular alternative fundraising method. In this article, I want to share 5 steps to invest in ECF in Malaysia.
But before we get started on the 5 steps to invest in ECF in Malaysia, let us cover what is ECF and how does it work in the context of the Malaysian regulations.
What Is ECF And How Does It Work In Malaysia?
ECF is an alternative fundraising method for entrepreneurs seeking to raise funds for their business. As an investor, you will receive new shares to be issued by the company in exchange for buying shares in the business.
In Malaysia, ECF is a regulated activity under the purview of the Securities Commission of Malaysia (SC). Therefore, every ECF platform needs to be licensed by the SC before a business is permitted to raise funds and be hosted on such an ECF platform.
5 Steps To Invest In ECF In Malaysia
As promised, here are the steps to invest in ECF in Malaysia.
1. Get Registered As An Investor
Before finding and investing in a campaign, you must register and get verified as an investor. To date, ten ECF platforms are regulated by the SC. Different ECF platforms may have different businesses seeking investments. Do the necessary research on these ECF platforms and find out their past and existing campaigns to see if they are aligned with your risk appetite and interests.
After filling up the personal details, your investment limit will be fixed based on your investor category. The SC’s rules prescribed three investor categories, namely retail investor, angel investor or a sophisticated investor. An angel investor who is accredited by the Malaysian Business Angels Network can invest up to RM500,000 per campaign while there is no investment limit for a sophisticated investor (i.e. high net worth individual or high income earner).
You can register as an investor in multiple ECF platforms.
2. Choose A Business To Invest
Once verified as an investor, you can invest in campaigns hosted on the platform. The platforms usually send newsletters to your email and updates on social media on new businesses looking for funding, so be sure to keep checking for new businesses that may interest you.
Generally, as a non-professional investor, you may want to invest in a company that you understand based on your industry’s knowledge and aligned with your value.
3. Read The Disclosures About The Business And Carefully
One of the next steps to invest in ECF in Malaysia, is not to get hyped out due to the ‘FOMO’ ‘Fear of Missing Out’ factor. Like any asset class, you need to figure out the features and characteristics of the investment and the risks involved.
As an investor you get the go through the find a list of documents known as the disclosures displayed on the campaign page. They usually include the latest audited financial statements, management accounts, an investment pitch deck containing the business plan, management team, their expertise, funding amount requested, and the breakdown of how the funds will be used for the business.
If there is anything that you need further input, you can ask the management team during the pitching sessions hosted by the platform or even ask the platform to set up a meeting with the company’s representatives to ask further questions on certain matters.
Also, all the material legal documents and agreements such as the term sheet (setting out the investment offer), subscription agreement and shareholders agreement are also uploaded on the website. Be sure to read them and understand your rights as a crowdfunding investor.
At this stage, you may want to engage your professional advisers (i.e. legal counsel, auditors and financial planner) that you usually work to help you conduct the necessary due diligence on the business to help you decide whether to invest in a company.
4. Transfer The Funds Into The ECF Trust Account
Once you have decided how much to invest in a campaign based on the investment offer, you will need to transfer the cash into a trust account using online transfer. The platform usually sends an email within a few working days to confirm that they have received your investment.
All the funds raised will be held by a custodian as an escrow agent and will only be disbursed to the company once the campaign is successful. If the company fails to raise the minimum targeted sum, the platform will refund back the money.
5. Monitor Your Investments
The final steps to invest in ECF in Malaysia, is to monitor your investments. Usually, the company’s management team will send you periodical (usually on a semi-annual or annual basis) updates setting out the progress of the business growth to the latest financials.
As an investor, you will also get regular updates and meet-ups with the management team to discuss about the business progress.
Conclusion On The 5 Steps To Invest In ECF In Malaysia
Investing in high-growth companies via equity crowdfunding can be a great way to diversify your investment portfolio. But like all types of investments, equity crowdfunding is risky, and you can lose all your capital. As an investor, read and understand the risks before investing in a crowdfunding campaign.
But if you are raring to go, those are the steps to invest in ECF in Malaysia. It’s not that hard is it?
Izwan Zakaria is a lawyer at Izwan & Partners, a corporate law firm helping startups do business and raise capital in Malaysia and overseas. He can be contacted at izwan@izwanpartners.com
