We all know that investing in stocks are considered to be “high risk high return” investment. Which means that it can potentially make you profit a lot, and make you lose a lot as well. With that in mind, what causes the Bursa Malaysia prices to be volatile with the price going up and down almost all the time?

It all boils down to the concept of supply and demand. When there are more buyers than sellers, naturally the price will go up. When there are more sellers than buyers, then naturally the price will go down.

Bursa Malaysia Prices Always Go Up And Down

To understand further, you need to do some Technical Analysis. Look at the charts and follow the trend.

If a stock is in a solid uptrend, you stand to make good money for as long as the trend is still bullish. Well as long as there are new buyers and the volume is strong, then there’s still potential for it to go up.

But in the end, what goes up must come down right?

You can also look at stocks that are moving downtrend and wait for a strong reversal signal. As the seller weakens with no new sellers, then buyers will start to turn the tide. Once buyers are more than sellers, the price should stop from going down any further and the momentum will start to change upwards.

Once it hits rock bottom, surely there’s no other way it can go other than up?

More Millennials Coming Into The Stock Market

Another reason why Bursa Malaysia prices are seeing a lot of volatility is due to many new investors come flooding the market – more specifically the youngsters. They typically trade stocks that are in the news, trending or based on thematic investment such as healthcare-related or oil-related stocks while also generally favoring small-cap and mid-cap stocks.

With better access to information and technology, millennials are most prepared to participate in online share trading and investment. Investment gains and validation of good analysis attract young investors to develop money-managing skills and later, to begin their own investing journey. 

Millennials are also deeply passionate about global issues that are important to them, and these include Environmental, Social and Governance (ESG), green technology and clean technology.

Know The Risks Involved

All investments carry with them some degree of risk, and these risks can range from inflation and interest rate changes to political uncertainties and economic trends. An investor must know his own risk tolerance, investment time horizon, and most importantly, his own financial goals. Holding investments for the long term, too, is advisable.

Trading on stocks that have no fundamental earnings, poor cash flow and poor business model is a dangerous start. Penny stocks and cheaply priced warrants, too, can also turn into potential big losses as their price drops can be very sharp too.

New investors should consider only value stocks and business models that are sustainable and should always make a practice of verifying if the information received is accurate. It is always good to diversify. Monitor the market and keep some cash ready for new opportunities that might arise.

Make sure you read 4 Mistakes People Make In Stock Investing.

Imagine the following situation: you bring your twins out for a family dinner in a pizza restaurant. When the pizza arrived, the restaurant didn’t split it. Now, you must split it between your children. The trillion-dollar question is how will you do it?

For this exercise, I present two plausible options:

1. You, as the parent, will split for the children.

2. You let the children decide for themselves.

For the first scenario, being their parent, you may rightfully believe that you are bestowed the right (by social convention for example) to decide for them. Here’s the catch though, what happens if you have good intentions but are inept with logic (e.g. You can’t tell that a large pizza with 8 slices and a large pizza with 12 slices is the same)?

Or your method might not yield consistently good results due to some long held tradition (e.g. tiger parenting). When your children grow up, they might constantly defer to a “higher” authority while imposing their will rightly or wrongly on their children.

For the second scenario, you are laissez-faire, trusting your children to behave well towards each other. Let’s say one of your twins is epigenetically different from the other. So one has a growth spurt much earlier than another. Making a twin stronger, but also hungrier. Then, it is easy for one to bully the other to get a larger slice. This creates an unhealthy dynamic between the twins. They might grow up hating each other, causing a rift in the family.

The first method sounds tyrannical; while the second can turn into anarchy. Both scenarios presented above are not meant to predict what would happen definitively. It aims to jolt us into being more conscious of our methods, because they might lead to undesirable outcomes.

Okay, what would be a better approach? How can we split the pizza between the children in such a way where a parent’s authority is not needed in the future; at the same time, the children will learn imaginative ways to treat each other as fair as possible?

The Fairness Solution

There is a little game to play when splitting the pizza, it is called the “split and choose”. To play the game, one of the twins is given the right to split the pizza into two slices, then the other gets to choose the first slice. For example, twin A splits the pizza into two, then twin B gets to choose which slice to take first. If twin A cheats by splitting the pizza unevenly, twin B will naturally choose the larger slice first.

In such a game, only the cheater loses. You don’t have to use your parental authority, nor enforce any fairness values. The self-evident fairness of this game creates a naturally desirable result.

Such games are at the centre of blockchain protocol development. This “split and choose” game is commonly referred to as proposer-builder separation in the blockchain development. The proposer (i.e. pizza splitter) will propose a block for the blockchain, while the builder (i.e,. pizza chooser) will build the block for the blockchain. The exact details of how this works is too lengthy and technical to cover in this article.

Nonetheless, you can find out more in the Ethereum discussion forum here. The point of all these is to keep a balance of power by avoiding centralization, so that it is worthwhile to build meaningful use cases on it. Without which, the participant with the most power can corrupt the entire system.

Not Everyone Thinks Fair

For the astute reader, you might be able to detect a flaw in this game. This game only works if participants are willing to play the game. What if in the future, without parental supervision, the stronger twin decides not to play this game and resorts to brute strength for a larger share?

This abuse of power happens a lot in the real world and in blockchain. However, let’s not forget that with continuous abuse, the weaker twin can also decide not to play the game and find other players willing to follow the fairer rule. One example in the real world is the migration of a minority group from one country to another.

In blockchain speak however, we call it “forking”. Forking is a situation where a group of participants decide to create another version of a blockchain with a new set of rules. Participants fork a blockchain because of competing beliefs in a better system given the risks and rewards like utility, cost, convenience, scalability, security, transparency, decentralization etc.

The trillion dollar question here is that given more time, which of these factors will society value most?

Shade They will Never Sit

Blockchain protocol developers are building blockchain infrastructure primitives (i.e. rules, standards, systems, protocols etc) that they believe will naturally and legitimately benefit society. Good blockchain protocols are developed through pragmatic first principles approaches using science, maths, cryptography, extensive human behavioural research etc.

We are already reaping the rewards from these efforts. In 2014, disadvantaged groups torn by war and oppression found refuge and financial freedom through Bitcoin. In 2021, we see the rise of NFTs (through ERC-721 standard) which allows artists from all around the world to have another sustainable means of income.

People living in countries with hyperinflation and foreign exchange controls use stablecoins (created through the ERC-20 standard) to keep the value of their hard earned incomes from eroding. And of course, some of us trade or invest in cryptocurrencies as a new class of asset.

In the coming years, there will be a lot more innovation in this field (so don’t sleep on it). Only with hindsight, will we realise how these imaginative games played a pivotal role in solving difficult social, political and economic problems. With it, we may no longer require blind obedience to an authority, nor giving up to zero-sum anarchy.

Future generations will reap the rewards of these old men who planted trees whose shade they shall never sit. Isn’t that what any good parent would want for their children?

About the Author

Chia Sheng Yeong is the partner of Celebrus Advisory, a bespoke and industry-acclaimed consulting firm for digital assets with focus on regulatory compliance, technical delivery, and project outcomes.

Sometimes, we check our portfolio and we gasp in shock at the horrid performance. The percentages are all in the red, and there seems to be no light at the end of the tunnel.

Young investors who invested into stocks and crypto are left holding the bag, seasoned investors are left shaking in their boots. What can we do to prepare for it?

The Anatomy of the Bear

Before we can figure out what our course of action is, it is prudent to analyze and understand the nature of the problem.

Panda-monium

Early 2020 we were greeted with the pandemic. The world went into a halt for two years, where supply dwindled and demand skyrocketed. To alleviate the pain, the US Federal reserve printed trillions of dollars.

Although the initial market reaction was of great fear, the money soon made it into the stock market, and we proceeded to have one of the greatest bull runs in the decade. The ride lasted for about a year, which brings us to the beginning of 2022.

The Ursa Awakens

March 2022 marks one of the darkest days of this year as equities dropped. War broke out in Ukraine following the invasion of the Russian army. The market was concerned with the effect the war will have on supply chain and the availability of commodities.

When the supply of the commodities dwindles, and the demand remains the same, prices skyrockets. Classic economics.

Inflation

Inflation is the kryptonite of investing (or the economy in general). The CPI numbers is the highest since the 1980s, and it is no wonder it has got everyone running around like headless chickens.

Companies will not be able to keep up with the input costs. Workers will not be able to get a livable wage since prices for basic necessities are soaring. Unchecked, this will create a cycle of hyper inflation that will instantly nuke an economy.

The Feds have been printing money and pumping it into the markets for the past two years. Although the Feds have been parroting that inflation is only transitory, now they have finally changed their tune as the bone chilling inflation numbers become available to the public. Kicking the can down the road has become a non-viable option, and the markets will suffer the consequences.

Although some of the inflation that is present today can be attributed to both the war and the Fed’s actions, one thing is for sure, everything is un-bear-ably expensive now.

Hawkish Feds

Since inflation is sky high currently, and the supply chain is impossible to fix, the Feds have only one option left. To destroy demand by increasing interest rates and reducing the money supply. That or risk runaway inflation.

As interest rates rise and money supply is actively being reduced, cash becomes more expensive, and investors demand more return for their investment, which drives down the value of investments. Complex models are used to determine asset prices, but for us simple investors, understanding this relationship is more than sufficient. In simpler terms, interest rates go up, investment go down.

Recession

With the threat of two consecutive quarters of negative GDP growth in the US, it is no wonder the markets are growing restless. The GDPNow real GDP growth, as of writing, is standing at 0.3%, it is probable that it will dip into the negative region once more information is available, which will signal to us that a true recession is here.

But can we time the recession and buy in at the bottom? Unlikely.

Recession comes and goes at its own pace, and the markets might reflect that information a lot earlier than expected. Trying to time the market might have the opposite effect of lowering long term returns, since missing just 10 best days of returns in a year will already cripple your portfolio.

Surviving the Rampage

Knowing all of the above, what can we do about it? Navigating the bear market requires understanding of the risk return profile of our portfolio and our specific goals.

Investing in a portfolio of investments that is fully diversified across all economies and geographical regions and taking on the market risk is still the simplest way one can invest without losing too much sleep, as recommended by John C. Bogle, the founder of Vanguard.

Beating the markets is nice, but trying to time derivative hedging strategies and complex long-short plays in a highly volatile market might not be suitable for the less sophisticated investor, and is a recipe for financial ruin. Beating the market is a tough racket, and almost all professionals will not be able to beat it consistently for a long period of time.

The markets have not failed (yet!), and if one believes in the markets, a monthly dollar cost averaging strategy into a diversified index fund is still the most prudent strategy for investors that can tolerate the volatility. Investors nearing retirement age might want to consult a licensed financial advisor to properly plan for retirement, as the market volatility might not be suitable for a retirement fund.

Crypto

Some experts have touted that crypto moves with the broader market, and offers no diversification benefit, which is hard to dispute, given the current state of crypto. Both institutional and retail investors have lost boatloads of money from being over leveraged and over invested in crypto as the overall crypto market tanked.

Wave after wave of projects that fail to prepare for the market downturn has left investors holding bags. Terra, Celsius and Voyager, are the 3 biggest names that have imploded into oblivion. Many projects, although not dead yet, have lost 90% or more of their peak values. Even Bitcoin and Ethereum have lost more than 60% of their peak values.

What can crypto investors do to survive the impending winter?

First, this is a lesson for young investors that they should only invest in crypto what they are willing to lose. It may sound harsh, but it needs to be said.

For some, it might be 5% of their portfolio, or maybe even less. One might not get rich quick, but at least they won’t be thrown into a roller coaster ride every time the market sneezes.

Second, investors should stay away from any projects promising unrealistic returns. Celsius, Terra, Voyager and many other projects promising extreme returns have gone belly up. If you’re a fish dead in the water, the bear will not hesitate to feast on you.

Stick to the “blue chips” and call it a day.

Summary

There is no sense in panicking in the face of the bear. The myth is that the best investors are dead! (Or forgot they have money invested).

Maybe that is the trick, to play dead, stay invested and wait for the bear to move on.

About the Author

Kevin Wong is the partner of Celebrus Advisory, a bespoke and industry-acclaimed consulting firm for digital assets with focus on regulatory compliance, technical delivery, and project outcomes.

Australians lost AU$158mil to investment scams in the first quarter of 2022. Malaysians have suffered the same fate with more than RM2bil lost through scams since 2017. The figure is potentially higher since there were many cases that have not been reported.

V. Thanga Velu @ VP Thanga, Executive Director and a Financial Planner at Blueprint Planning Sdn Bhd shares that most of the scam’s victims wanted to achieve their shortfall with the highest return. Besides, scammers are now getting smarter and more creative blending in with the people.

We seldom conduct our own research on whether the investment is legitimate. The other thing that Thanga emphasizes is that the government should impose severe punishments on the scammers. For example, longer jail terms and the seizure of their assets. 

Normal people without a finance or investment background may not know how to classify or identify whether an investment is a scam. 

“Legitimate investments tend to have lower returns and more paperwork such as Know Your Client (KYC) or fact findings to participate in the investment, which may not be attractive and troublesome to some people. If an investment is convenient, provides high returns and no questionnaires are needed, think hard, think long before making that decision as it might just be another scam,” Desmond Foo Wai Kheong, Practice Director of UOB Kay Hian Wealth Advisors Sdn Bhd explains. 

As a rule of thumb, if it is too good to be true, you should consider getting a second opinion before investing your hard earned money. 

With the rise of social media, a lot of financial gurus and influencers are now giving out tips. Some of them are legit, while some may take advantage of their followers. There were a few social media investment scam cases that were reported. 

But how do the public filter all of the information given by the gurus or shared by the influencers so that they won’t fall in the trap?

Nick Lim, a Licensed Financial Planner at I-MAX Financial Sdn Bhd shares that we need to assess the person dispensing the financial advice whether they are qualified. Check this person’s track record and ensure that verifiable facts support everything being shared. 

Senior Vulnerability

In a survey led by the International Organization for Securities Commissions (IOSCO) which represents more than 150 countries’ securities regulators including Malaysia, it found that the senior investors in particular face greater risk of becoming victims of fraud, being misled or taken advantage of.

The 2018 survey which focussed on seniors, defined as those in or nearing retirement, highlighted the rising financial fraud on the elderly across the globe.

As investors age, they may face new challenges such as cognitive impairment due to health and age reasons as well as mental health issues arising from greater social isolation. For some senior investors, these challenges are compounded by a background of limited education and financial literacy – all of which can affect their judgement and decision-making capacity when it comes to investments. 

According to the Securities Commission, this is already apparent in Malaysia – senior citizens are often targets of various syndicates, ranging from phone scams and sweepstakes to more complex scams which involve impersonation of figures of authority. Most scams or fraud activities target the life savings of these senior citizens, regardless of net worth, and take advantage of their vulnerabilities.

The growth in digitisation has also exposed vulnerabilities among investors who lack the knowledge to protect themselves in the digital age.

Beware if It’s Too Good To Be True

The reason that most of us fall prey to scams is due to us being gullible to get rich quick and forget that investment is a long term game.

Some of the more popular scams are the ones that promote non-existent investment schemes that promise high returns with little or no risk within a short span of time. Have you seen an ad that says, “Invest RM1,000 and get RM10,000 within 24 hours”?

Ask yourself, is it too good to be true? If it is, then you should be very careful and avoid it at all costs.

Scammers have also been known to use fake certificates, invoices and payment receipts from authorities such as the Securities Commission Malaysia (SC), Companies Commission of Malaysia (CCM), Bank Negara Malaysia (BNM), and Inland Revenue Board of Malaysia (LHDN). We tend to feel safe if it is endorsed by the authorities, and wouldn’t question them on the legitimacy of the documents.

There is also a rise in clone firm scams, where clone firms pose as legitimate entities by using names, logos, credentials, website and other details of legitimate entities to promote bogus investment schemes. At a glance, it looks very similar between the two. If we are not careful, we will think that it’s the real deal.

Always take some time to research any financial tips, to evaluate if that tool applies to oneself. Keep this in mind, we are the decision-maker and there will be nobody else to blame but ourselves if things don’t turn out well. Ultimately it is always advisable to deal with a licensed personnel.

There are thousands of unit trust funds in Malaysia, making it very hard for an individual to choose to invest in which unit trust. There are many categories to choose from, ranging from equities (high risk) to bonds (low risk).

Let’s check out some of the top unit trust in Malaysia as per below:

The above are the 2022 Morningstar Fund Awards winners in Malaysia.

For the category Best Asia-Pacific Equity, the winner is PB Asia Equity Fund by Public Mutual Berhad.

Best Malaysia Bond Fund category goes to AmanahRaya Unit Trust Fund by Amanahraya Investment Management Sdn Bhd.

Amanahraya Investment Management Sdn Bhd wins again in the Best Malaysia Bond (Shariah) Fund category with its Amanahraya Syariah Trust Fund (Syariah Bond Fund).

Kenanga Investors Berhad won the Best Malaysia Large-Cap Equity Fund with its Kenanga Growth Fund Series 2 (USD).

Finally, Public Mutual Berhad won again for the category Best Malaysia Large-Cap Equity (Shariah) Fund with its Public Islamic Alpha-40 Growth Fund.

How The Winners Are Selected?

The Morningstar fund category awards are based on Morningstar fund data as of 31 December 2021. The awards methodology emphasises the one-year period, but funds must also have delivered strong three- and five-year returns after adjusting for risk within the awards peer groups in order to obtain an award. In selecting winners, fund returns are adjusted for risk using the Morningstar Risk, a measure which imposes a higher penalty for downside variation in a fund’s return than it does for upside volatility. The full methodology for the awards is available here.

So there you go, those are some of the top unit trust in Malaysia. But before investing in any unit trust or any investment vehicle for that matter, do your own due diligence first. The unit trust might be suitable for me, but it might not be suitable for you or for everyone.

Malaysia’s mandatory retirement age is now at 60 years old. It can either be a good thing or worrying, depending on whether a proper planning has been done prior to retirement.

For most of us, the main savings for retirement would be our contributions to the Employee’s Provident Fund (EPF) or other equivalent retirement fund. But as statistics have shown, it is inadequate to maintain the quality of life we were used to before retirement.

Many would take a step further and seek advice from a Financial Planner to see how they can enhance their planning by growing their wealth through investments. With so many options available in the market, many have been blind-sided about one particular issue.

Retirement planning is more than just saving enough money to generate a passive income that covers your post-retirement living expenses and healthcare.

Regardless of how you save or how much you save; you need to think about a situation where you or your family members may not be able to access your savings. What if you are comatose or is suffering from dementia, and are not able to take care of yourself during old age? Or perhaps another pandemic like COVID-19 happens?

You may have a family to take care of, but they will need access to your savings. They would not be able to do so if they are not authorised to operate your account.

Planning for retirement is not just about making sure you have enough to live, but also about providing for contingencies that can happen.

A well-planned retirement covers planning in many aspects, from financial to healthcare arrangements to estate planning and even bereavement care. Proper planning could save your family from a lot of heartaches and financial pitfalls. Rather than just merely saving for retirement, you can further enhance your retirement planning by using a Trust.

A trust is like a water tank that you have installed in your house. Your house’s water supply come from the main pipe. Although the supply is supposed to be continuous, it is only a matter of time before a shortage can happen. This is where your water tank comes into use by continuing your water needs in such an emergency.

This is how an investment or insurance trust from Rockwills can help in your retirement planning.

This type of trust provides liquidity in times of need during your retirement. In the trust structure provided, you need not transfer the asset yet until the events that were predetermined by you happens. Such events could be Total Permanent Disability (TPD) such as being comatose for a period of time, critical illness, and mental disability.

Rockwills as your appointed Trustee will then utilise the trust funds to take care of your financial needs, such as medical expenses and even your living expenses while you are under nursing care. This is very useful especially for those whose children have migrated overseas and are no longer around to help.

In summary, you need to build a safe where you can keep piling up your life treasures; and when the need arises, your dependants are able to access it. You will then need someone who can act as your trustee with a backup key to access your funds and carry out the distribution instructions. By setting up a trust, you will be protected in case of unforeseen events and that will only mean a safer future for you and your family.

Rockwills can help you plan to ensure that your retirement planning objectives can be achieved. Established in 1995, Rockwills is the specialist in providing comprehensive Will Writing, Will Custody & Trust services. We are one of the largest estate planning groups in the region, having written more than 280,000 Wills, 12,000 Trusts and holding over RM25 billion assets under Trust.

“Fintech for inclusion” seems to be on everyone’s lips and countless articles have been written on advancing the benefits of fintech for the underbanked and underserved segments. Undeniably, many of us, to a certain extent, may have already benefited from the adoption of fintech, from payment to data-driven investment in consultancy services.

With more intense competition between the major players, it would translate into better services at a lower cost.

However, the term “customer loyalty” and “customer satisfaction” may no longer apply in this era of digitalisation. Customers may not be loyal although they are satisfied with a particular service provider.

Seamless easy experience remains the utmost important factor for customers in their selection of a service provider. In other words, a service provider may face the risk of losing its customers at just the slightest inconveniences from technical glitches in their platforms.

This explains why fintech providers are so obsessed in improving customer experience particularly in the area of digital on-boarding in their services. Palatable decent services is no longer good enough but services that intrigue and keep customers delighted may help to retain them.

Investing With Fintech

On the investment front, customers may be inclined to prioritise investment returns over convenience. Thus for investment platforms, they may stop utilising the platform if it fails to generate enough returns according to the users’ risk profile or risk appetite.  Conversely, they may still utilise the platform, even if it is complicated, as long as the provider could deliver some ‘magic figures’ for their investment returns.

So, with a myriad of fintech systems that can help us to save, borrow, plan, trade, invest and automate our portfolios along with alternative investments and in emerging asset classes such as Decentralised Finance (DeFi) – cryptocurrencies and Non-Fungible Token (NFT), could we invest better with fintech?  Could we make more profitable returns compared to our predecessors or to those who are reluctant to embrace the technology?

Studies have shown that humans are not always rational especially when it comes to investing. Digital assisted investment tools can help us invest with less emotions and make better fact-based decisions. For instance, with the advancement of fintech applications with Artificial intelligence (AI), we could preserve the value of assets with the right risk-management techniques. Market sentiments for a particular asset or asset types could be gauged with the help of fintech applications in analysing and interpreting into human language by looking into their preferences, their opinions, what they say, likes or dislikes.

However, whether the tools can be harnessed for better investment decisions depends on how smart we are in utilising it. The increased amount of available information together with fake news daily, may result in ‘illusion of control’ over our investment abilities or ‘illusion of knowledge’ over the capacity of fintech platforms for investing.

Such psychological biases could lead to excessive financial risk-taking that inadvertently results in less than optimal investment decisions when we underreact or overreact to information. Overreaction and under-reaction to information are due to our brain’s tendency to use shortcuts when processing large amount of information as detailed in the psychological literature.

Trying to avoid the ‘falling out of herd’ mentality is another type of bias commonly experienced when making investment decisions. This can then lead to domino effects of ‘false consensus’ and ‘momentum bias’ when making decisions.

‘Investing is most intelligent when it is most business like’ and ‘Be fearful when others are greedy’ are perhaps the famous quotes by Warren Buffet that we have to remember when investing. We can only consistently beat the market and earn a return only if we are smarter than the market. Hence, by just emulating the trading strategies of others or adopting their software could make us as smart or as silly but not necessarily smarter than others.

No matter how sophisticated or data-driven the fintech platform is, the ability to discern real from fake news is also critical. We are essentially living in a big machine under digital surveillance daily, with tons of information produced daily from the moment we use electronic devices.

With increased competition, major players may be heading for more partnerships and initiatives such as Open-Banking, to share and leverage our data in providing a more customised application and solution for us.

After all, fintech is also a tool that feeds on data. The right investment action for better investment outcome could not be possibly extracted from a large amount of garbage.

Yet, being not digitally exposed may also mean becoming more digitally vulnerable to financial scams. Thus, it is important to invest in oneself by acquiring knowledge and skills, while undertaking finance and non-finance related risks that are brought about by rising fintech development. 

In short, too much of something is never a good thing; just like consuming too much vitamins or supplements may be bad for our health. There is no perfect formula or system for investing in this world.

We should not forget that many market crashes like Black Monday in 1987 and the liquidity crunch in August 2007 are in part due to mechanical glitches.

About the Author

Dr Audrey Lim Li Chin is a lecturer and a researcher at Multimedia University (MMU) Melaka. She teaches International Finance and Derivatives. She is particularly interested in retirement planning, mental health, fintech especially in blockchain and data analytics. She is also a Certified Financial Planner, (CFP) and is currently pursuing Chartered Financial Analyst (CFA) certification. She is also the external educational advisor to Max Wealth Education Sdn Bhd.

This article is in collaboration with Max Wealth Education Sdn Bhd, an approved Education Provider for the CFP Certification Program.

---

Upgrade Yourself To Become A Certified Financial Planner And Islamic Financial Planner

The Certified Financial Planner (CFP) qualification is for those wishing to practice the profession of financial planning and who wish to master a certain level of theoretical knowledge and practical application of financial planning in such areas as:

• General principles of financial planning
• Insurance planning
• Taxation planning
• Investment planning
• Retirement planning
• Estate planning
• Financial plan construction and professional responsibilities

Islamic Financial Planner (IFP) is designed especially for professionals and personnel serving the retail segment of the Islamic financial products and growing demands of discerning Muslim retail clientele call for higher standards of competency and ethical practice of financial planning professionals. Equip yourself with enhanced knowledge in the personal financial advisory space.

Exclusively for Smart Investor followers, click https://www.smartinvestor.com.my/SIxMaxWealth to find out more about the Special Promotion Package and get up to 20% special discount.

*This promotion is valid until 31st December 2022 only

Shariah investing is a very popular buzzword and Malaysia is the world’s leader in Islamic finance industry.

Smart Investor spoke to Ruzi Rani Ajith, chief executive officer of CGS-CIMB Securities Sdn Bhd to find out more about Shariah investing and the inaugural CGS-CIMB Regional Shariah Investing Symposium 2022 which was held in Singapore recently.

Themed Sustainability & Shariah: Investing for a Brighter Future, the symposium brings together experts from across Malaysia, Singapore and Indonesia to discuss the latest developments in Islamic Finance and Shariah Investment. Top management from leading Shariah-compliant companies listed on Bursa Malaysia, the Singapore Exchange and the Indonesia Stock Exchange were present to share their future strategies and growth plans post-pandemic.

Smart Investor: Hi Ruzi Rani Ajith, thanks for taking the time to have this interview with Smart Investor. Perhaps we can begin with a brief introduction about yourself?

Ruzi Rani Ajith: Hi, thank you for having me. It is my pleasure to be here with Smart Investor. Sure, my name is Ruzi Rani Ajith. I am the chief executive officer at CGS-CIMB Securities Malaysia and group head of shariah services at CGS-CIMB Securities.

Prior to my appointment, I served as the head of equities in CIMB Investment Bank, where I have worked with the organisation in various capacities over the past 23 years. Before joining CIMB, I was with Affin Investment Bank for three years as a fund manager.

SI: Why do you think Shariah investing is important, and is it only limited to Muslims?

RRA: Shariah investing is not limited the Muslims. Shariah investing is for all. It is another approach to investing where Shariah compliance is to be adhered to. Shariah investing among others avoid prohibitive elements in shariah such as riba (interest), gharar (ambiguity) and maysir (gambling). In its process to uphold Maqasid (objective) Shariah, Shariah investing has always been closely linked to Social Responsible Investment (SRI) and Environmental, Social And Governance (ESG).

Shariah investing is a subset of SRI and also complementary to ESG. Due to its overlap with ESG and SRI, it is becoming increasingly popular and important for investors, with an increase in take-up on Shariah investing.

SI: What are the market trends should investors look out for in the near future?

RRA: The trend is the focus on Shariah and ESG investing. Global investors are increasingly aware of the synergy between ESG investments and Islamic finance. This contributes to the growing demand for Shariah-compliant investments as investors seek greater portfolio diversification and an alternative to investing traditional ESG. Shariah-compliant and ESG investing are complementary investment approaches that have important points in common, such as being a good steward of society and the environment. “According to research by Refintiv, Shariah compliance screening can do much to improve ESG performance. There is a direct correlation between Shariah compliance and higher ESG scores, and combining the two could improve overall risk-adjusted returns”.

We should see an increase in new Shariah or ESG product offerings to cater for various market segments.

Another trend that is taking centre stage is the green and renewable energy space as the world is gearing towards a net zero carbon by 2050. This is where the transition into green and renewable energy comes into play. Hence, funding this transition has created the demand for sustainability and green sukuk which has resulted in exponential growth.

SI: With the rise of inflation and interest rates, what should an investor do?

RRA: Never put all your eggs in one basket. Portfolio diversification can help to balance the risk and reward in your investment portfolio.

Also, investors can consider investing in ESG and Shariah-compliant products to reduce the risk in an uncertain market.  To also take into consideration to invest in defensive and high-yield stocks.

SI: Tell me more about CGS-CIMB’s involvement with Shariah investing?

RRA: CGS-CIMB started its Shariah business in Malaysia office where Shariah investing is further enhanced with various innovative products that are in the pipeline and will be launched soon. Confident with the prospect of Shariah businesses, we have also extended our Shariah services to our Singapore and Indonesia offices.

In Malaysia, CGS-CIMB offers a range of Shariah-compliant products and services from Shariah compliant trading accounts; with access to thousands of Shariah-compliant securities, margin facilities. We are the first broker to launch Islamic Cross Border Trading, as well as setting the framework for Islamic Securities Selling and Buying (ISSBNT).

The responses have been very positive. Over the past two years, we have managed to triple the number of Islamic trading accounts. We aim to continue to launch innovative Shariah Compliant products such as Shariah-compliant Discretionary Trading and Shariah-compliant Futures.

We are happy to have Singapore and Indonesia embarking on this journey, launching their first Shariah-compliant products and services at this Shariah Symposium. Moving forward, we will continue to expand our product and services in the region.

SI: Congratulations on the inaugural CGS-CIMB Regional Shariah Investing Symposium 2022 which was recently held, care to share more about this event?

RRA: Thank you.

The CGS-CIMB Regional Shariah Investing Symposium (RSIS) will be organized annually.

The RSIS sets as a platform to bring together exchanges, corporate leaders, industry experts and investors to explore economic and market trends within the Shariah Investment landscape.

RSIS aims to bring awareness and educate investors and public on Shariah investments, especially in Singapore and Indonesia.

The symposium showcases CGS-CIMB’s contribution to Islamic Finance industry in creating awareness on the subjects and its focus on Islamic businesses in the region.

CGS-CIMB’s aspiration is to become the regional leader within the Islamic Broking space. On the long run, this annual symposium is aimed to further provide deep awareness to the growing trend for Islamic Finance and Shariah Investment across the region.

The support from three exchanges namely Bursa Malaysia, Singapore Stock Exchange and Indonesia Exchange shows a positive sign to create awareness of Shariah investment around the region and encourages Shariah investments as a choice and an alternative to conventional investments.

SI: What are some of your plans for the future that you can share with us?

RRA: Our goal is to be a leader in Islamic Finance in countries with CGS-CIMB presence.

We hope to use our experience in Malaysia to lead the Islamic initiatives in countries where CGS-CIMB has a presence starting with Singapore and Indonesia which has the most potential.

In Malaysia, our focus will be on operational efficiency as well as continue to improve our Sariah product offerings. We will be launching two new products namely Shariah Discretionary Trading and the first in the world Shariah-compliant Futures this year.