Pavilion Real Estate Investment Trust (“Pavilion REIT”) has announced the successful conclusion of the acquisition of Pavilion Bukit Jalil, strengthening its position in the retail sector and marking an important milestone in its portfolio expansion and income diversification strategy.
Following the fulfilment of all conditions precedent as set out in the earlier Sale and Purchase Agreement (SPA) and an oversubscription of its first private placement, Pavilion REIT now owns Pavilion Bukit Jalil, inheriting its balance sheet and revenues.
Dato’ Philip Ho, CEO Pavilion REIT Management Sdn Bhd
“The successful acquisition of Pavilion Bukit Jalil signals a strategic expansion in Pavilion REIT’s portfolio, bringing total asset under management to RM8.3 billion and the start of another new chapter for Pavilion REIT,” stated Dato’ Philip Ho, the Chief Executive Officer of Pavilion REIT Management Sdn Bhd.
Dato’ Philip added that Pavilion Bukit Jalil’s robust tenant strategy, combined with its role as the host of numerous local and international events, has successfully driven the mall’s occupancy rate to over 82% in a relatively short span, and that this positive momentum is expected to continue.
The mall’s diverse tenant mix has recently secured new brands particularly in the F&B space including BONCAFE @ HOME, Mixbowlicious, Noodleface Express, MOVON, CrunchCraze, 117 Coffee Bar by Psycoth, Superhero, and Xi Yu (喜鱼). Further adding to the unique experience, the mall also will welcome new concept outlets such as Iron House Cafe (铁皮屋) and JP & Co.
Dato’ Philip Ho highlighted that Pavilion Bukit Jalil’s energetic atmosphere, catering to diverse interests, is poised to solidify Pavilion Bukit Jalil’s positioning as a premier retail destination. By incorporating novel retail brands and concept stores, while hosting renowned exhibitions and events, the mall’s strategic vision supports a wider visitor and shopper base, making it an increasingly attractive proposition.
L’Occitane Hotel pop up
Pavilion Bukit Jalil has established itself as a preferred event destination, hosting various international and local pop-up exhibitions. The mall is currently hosting the world’s first L’Occitane Hotel pop up and ‘The World of Tim Burton Pop-Up Museum’, the first in South East Asia. Recently concluded events include the internationally acclaimed Van Gogh immersive experience and Demon Slayer: Kimetsu no Yaiba Total Concentration exhibition from Japan.
Pavilion Bukit Jalil will also soon play host to the Japan Expo Malaysia 2023, the biggest all-Japan event from August 18 to 20. The event is expected to draw enthusiasts for all things Japanese and will incorporate a number of zones including music, food, travel, arts, education, health and wellness, anime and cosplayers.
About Pavilion REIT
Listed on 7 December 2011, with the largest exposure to the retail sector by any listed Malaysian REIT, Pavilion REIT owns a RM6.0 billion portfolio based on appraised value, to which its most prominent asset is the Pavilion Kuala Lumpur Mall that is located in Bukit Bintang, Kuala Lumpur, Malaysia. Pavilion REIT is established with the principal investment policy of investing, directly and indirectly, in a diversified portfolio of income producing real estate used solely or predominantly for retail purposes (including mixed – use developments with a retail component) in Malaysia and other countries within the Asia-Pacific region. For more details, please visit www.pavilion-reit.com
About Pavilion REIT Management Sdn Bhd
Pavilion REIT Management Sdn Bhd is the manager of Pavilion REIT. Incorporated in Malaysia on 7 April 2011 with an issued and paid-up capital of RM5 million, it is 51% owned by Urusharta Cemerlang Development Sdn Bhd and 49% owned by Urusharta Cemerlang Project Corporation Sdn Bhd. The principal activity of the Manager is to manage and administer Pavilion REIT.
Today’s investing landscape features a confluence of challenges. The current economic environment of high inflation and higher cost of living has led to heightened uncertainty in financial markets. Meanwhile, an ageing population is adding pressure on retirement savings. As a result of these global trends, Malaysians are experiencing new vulnerabilities in the course of their investment journeys.
The Institute for Capital Market Research Malaysia (ICMR) embarked on a nationwide study to better understand these new age vulnerabilities. We found the underlying reasons for investor vulnerability are multifaceted and can be broadly grouped into three categories based on their characteristics. In this article, we will explore the first and most common category: financial behaviour and accessibility.
More Decisions, More Fatigue
Our survey findings reveal that most Malaysian investors experience vulnerability due to their financial behaviours and accessibility to financial products and services. 93% of surveyed respondents have three or more behavioural and access drivers that could make them feel vulnerable, which includes their perception of their own financial status, savings behaviour, and financial literacy.
In terms of perceived financial status, most Malaysians reported they are either financially unstable or are living paycheck-to-paycheck, which influences their level of financial stress and wellbeing. 74% of those who are financially unstable and 54% who are living paycheck-to-paycheck claimed to always feel stressed and worried when thinking about their financial futures.
Figure 1: Perceived Financial Status (Data Source: ICMR)
Past behavioural studies have shown that the more decisions that one is forced to make, the more fatigue one develops, which consequently leads to a deteriorating quality of decision-making – a concept known as decision fatigue. Moreover, people who frequently experience financial stress tend to experience decision fatigue more intensely compared to others.
Indeed, 61% of those who are financially unstable and 42% of those living paycheck-to-paycheck admitted that they get mentally drained when thinking about financial planning and would prefer to follow their family and friends’ decisions. As highlighted in our previous article, this makes them more susceptible to being involved in scams, misled, and creating investment bubbles.
Not Saving Enough For Difficult Times
Beyond financial status, ICMR also set out to understand Malaysians’ savings behaviour, given the importance of having enough savings to ensure financial resilience to any unexpected life shocks. Based on guidance by the Employees Provident Fund (EPF), it is recommended that Malaysians have at least 20% monthly savings and 6 months’ worth of emergency savings.
One common assumption is that Malaysians are not generally aware of these savings benchmarks, but ICMR’s findings suggest otherwise. While 43% of respondents know they should save 20% of their monthly income, only 23% actually follow through. Similarly with emergency funds, 34% know they need 6 months’ worth or more, but only 22% claim to have that amount of buffer for emergencies.
Figure 2: Monthly Savings and Emergency Savings Behaviour
Another assumption is that those with higher incomes can save the most, while financial stress is commonly associated with those in the lower income group. Our study again challenges these assumptions, as our findings indicate that 68% of respondents in the high-income group are saving less than 20% of their monthly income and 76% have less than 6 months’ worth of emergency savings.
Since Malaysians are already struggling to save regularly and are not able to financially sustain themselves during difficult times, it is hard to expect them to show better saving habits for a longer-term goal such as retirement. This then leads to another factor that defines investor vulnerability in Malaysia – retirement savings or a lack thereof.
Lack Of Retirement Readiness
Based on the assumption that one will retire at the age of 55 and life expectancy in Malaysia is 75, one’s savings need to last for at least 20 years. However, when we asked our respondents how long they expected their current and EPF savings to last after retiring, 75% felt that their total retirement savings would last them less than the required 20 years post-retirement.
This is mainly due to the lack of retirement savings, especially among retirees and gig workers. 62% of surveyed gig workers claimed to have less than RM50,000 worth of retirement savings, and what is more worrying is that 70% of surveyed retirees have less than RM250,000 worth of retirement savings – less than what the EPF estimates is adequate to cover basic needs for 20 years after retirement.
Figure 3: Retirement Savings by Age Group
While those who are 40 years old and below tend to meet the basic retirement savings threshold as determined by EPF, as soon as they reach 41 years old, more than half of the EPF contributors are not able to meet the target basic savings for each age group. This is probably because they start withdrawing from their EPF accounts for home loans, children’s education, or even health expenses.
To supplement the findings from our survey, ICMR also conducted qualitative interviews with retirees in the Klang Valley. The interviewees shared that they did not know what to do with the big sum of savings that became accessible to them after retiring. As a result, they tended to invest on a trial-and-error basis and followed advice from friends and family – with many plagued by failing investments.
Overconfident About Financial Literacy
Although Malaysians are generally not saving enough and unprepared for retirement, ICMR’s findings also show that they are overconfident with regards to their financial knowledge. Only 39% of respondents scored 80% – 100% in a simple financial literacy test prepared by ICMR – but 67% of respondents claim to be highly confident of their financial capabilities.
Topics such as compounding interest, inflation, risk and return, cost of borrowing and diversification, are considered as the most basic to test respondents’ understanding of some of the key financial concepts. However, it is concerning to see that 59% of respondents who scored lower than 80% (less than 4 questions correct) feel highly confident about their financial capabilities.
The overconfidence effect is observed when people’s subjective confidence in their own ability is greater than their objective (actual) performance. Overconfidence has been attributed to a range of issues. More generally, among investors, overconfidence has been associated with excessive risk-taking and is most likely to lead them to make wrong financial decisions.
Overconfidence also relates to one’s optimism bias during investment or broader financial decision making. Optimism bias refers to the tendencies for people to overestimate the probability of positive events and underestimate the probability of negative events happening to them in the future. This kind of thinking is dangerous and often leads investors to make reckless financial decisions.
Investor Vulnerability Is Multifaceted
Making good financial decisions is not an easy task for most people. It involves overcoming biases and considering the satisfaction of short-term gains against the things that are beneficial for us in the long-term. The challenges of making good financial decisions get even more difficult when factors such as financial stress hinders one from making optimal decisions with a sound mind.
Nonetheless, ICMR’s study highlights that different ‘types’ of vulnerability are frequently overlapping and closely interconnected – meaning that financial difficulties are not always easily attributable to a single particular ‘cause’. Stay tuned for our next article as we explore how situational circumstances and industry-related issues can also lead to new vulnerabilities for Malaysian investors.
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 behavioural tips and insights for better investing habits. To learn more about ICMR’s research on new age vulnerabilities, visit www.icmr.my or download the full report.
About the Authors
Datin Aida Jaslina Jalaludin, Head of Research, ICMRNadhirah Ibrahim, Research Analyst, ICMR
Malacca Securities Sdn Bhd announced the launch of M+ Global, a one-stop, all-in-one global trading platform for all traders, with access to a diverse range of international investment opportunities, starting with two of the world’s largest global stock markets – the United States and Hong Kong.
M+ Global is a revolutionary digital trading platform which empowers Malaysians to navigate the dynamic global market, seize opportunities, and take control of their financial future. Through a single account, users can access over 7,000 stock listings in the United States, 3,000 in Hong Kong and unlimited tradeable derivatives, including warrants, ETFs, CBBCs and REITs. This unparalleled access to foreign exchanges allows Malaysians to invest in major corporations such as Apple, Tesla, Alibaba, Tencent, and many more.
Lim Chia Wei, Managing Director of Malacca Securities Sdn Bhd, said, “We’re excited to take Malaysians on a journey to win the world with M+ Global. By offering access to the United States and Hong Kong markets, Malaysians now have greater investment opportunities in some of the largest and most successful companies across various sectors and industries globally.”
M+ Global is the first digital trading platform in Malaysia which offers basic real-time data in partnership with the National Association of Securities Automated Quotations (NASDAQ). This leading global technology company provides trading, exchange technology and information services to the world’s financial markets. Through this partnership, Malaysians will now have access to Real-Time-Quotes (RTQs), which will boost their investment experience and help them make better-informed investment decisions with access to the actual price of a security in real-time.
In addition, M+ Global is the only digital trading platform in Malaysia which offers a Shariah Screening feature for global stocks, allowing Malaysians to identify Shariah-friendly stocks efficiently and accurately on a global scale. This unique feature on the platform was offered to Malaysians through a partnership with IdealRatings Inc, a global leader in providing Islamic finance solutions. With just a few taps, modern-day investors seeking to invest according to Islamic principles can now swiftly identify and gain instant access to a comprehensive selection of Shariah-compliant stocks.
Chuck Lim, Head of Business of Malacca Securities Sdn Bhd, said, “We believe in empowering our users with the tools and insights they need to succeed. We’re thrilled to offer our users a seamless platform that combines cutting-edge technology and real-time market intelligence. With M+ Global, traders can easily and confidently navigate the complexities of global investments, unlocking endless possibilities for growth and success at their fingertips.”
The M+ Global is a seamless and intelligent platform integrated with 24/7 stock-mover monitoring and real-time news, providing users exclusive access to timely global financial information to stay up-to-date on important market-moving events and make more informed investment decisions. Users can personalise their watchlist news, customise their alerts and get instant updates on top trending news from front-line financial news sources such as Benzinga, MT Newswire and many more.
With over two hundred licensed dealer representatives with foreign trade insights, Malaysians can leverage their expertise and diversify their portfolios through global investment for both Shariah-compliant and non-Shariah stocks in the United States and Hong Kong markets at a competitive price.
M+ Global offers a first-of-its-kind customer support experience with 24-hour multi-channel customer support service on in-app live chat, WhatsApp, hotline, email and live stream.
“Our rich sixty-year history as an award-winning homegrown stockbroking company places us at the forefront of stock market innovation. Building on the success of M+ Online in 2012, we are committed to staying ahead of the curve to provide a first-class digital experience to enhance the investment experience for our valued customers. We’re paving the way for a new era of wealth-building with Malaysians, starting with the launch of M+ Global,” said Lim Chia Wei during the launch of M+ Global.
“ As a hybrid broker with sixty years of experience, M+ Global was created to stand out in the market through the seamless integration of cutting-edge technology and personalised human expertise. Our powerful global trading platform provides easy access to a wide range of investment opportunities across global markets. However, we understand that technology alone is not enough, which is why our team of two hundred licensed dealer representatives bring their industry knowledge to provide a comprehensive and personalised trading experience,” added Lim Chia Wei.
Malacca Securities Sdn Bhd, the creator of M+ Global, is committed to continuously improving and advancing the platform to provide Malaysians with an intelligent and accessible gateway to the global marketplace. Users can expect more upcoming features such as initial public offering (IPO), conditional order, US fractional shares and options trading, which will be rolled out soon to the public in stages.
To celebrate the launch, M+ Global is hitting the town with free shares under its “Unbox Mystery Stock” campaign! Starting from 15th May 2023, new users who register for an M+ Global account will receive one (1) unboxing chance to get one (1) free stock randomly (Apple, Tesla, Google, Shell, Coca-Cola, Manchester United, Krispy Kreme or Snapchat) when they deposit a minimum of RM1,000 into their account for the first time. Additionally, they can also access thirty days (30) of free live quotes to the United States and Hong Kong markets.
Malacca Securities Sdn. Bhd. is an award-winning homegrown stockbroking company with 60 years of experience providing investment solutions for retail investors and corporate organisations. Malacca Securities is listed as a participating organisation under Bursa Malaysia and licensed by the Securities Commission Malaysia. Malacca Securities remained a pioneer in the industry after surviving several world crises through innovations to make stockbroking more accessible to Malaysians. Malacca Securities is committed to revolutionising the financial landscape through technology and innovation, starting with the launch of M+ Online in 2012 to boost investors’ trading journey in the local scene. With its 60th anniversary in 2023, Malacca Securities launched M+ Global, a one-stop global trading platform with real-time market data, news and alerts to help Malaysians make better-informed trading decisions to navigate the global market confidently.
About M+ Global
M+ Global is a one-stop, all-in-one global trading platform created by Malacca Securities Sdn. Bhd., an award-winning homegrown stockbroking company with 60 years of expertise in building wealth together with Malaysians. Malaysians can trade globally with M+ Global, starting with two of the world’s largest and most important global markets – the United States and Hong Kong. M+ Global is Malaysia’s first digital trading platform that offers NASDAQ basic real-time data. M+ Global is the only trading platform offering Shariah Screening for global stocks. As a one-stop, all-in-one global trading platform for all traders, M+ Global is equipped with all the professional tools, news and customisable alerts to enhance Malaysians’ trading experience on a global scale seamlessly.
The Securities Commission Malaysia (SC) has taken action against Huobi Global Limited, and its Chief Executive Officer Leon Li for operating a digital asset exchange (DAX) in Malaysia without registration.
Accordingly, the SC has issued a public reprimand against Huobi Global Limited, and Leon Li for operating illegally in Malaysia.
In addition, the SC has ordered Huobi Global Limited to stop its operations in the country, including to disable its website and mobile application on several platforms such as Apple Store, Google Play and any other digital application platform.
Huobi Global Limited has also been directed to cease circulating, publishing or sending any advertisements, whether in email or on social media platforms, to Malaysian investors.
Leon Li, as the CEO, has also been specifically ordered to ensure that the above directives are carried out.
This decision comes after concerns about the platform’s compliance with local regulatory requirements and protecting investors’ interests. The SC views this breach seriously, as operating a DAX without obtaining the SC’s registration as a Recognised Market Operator (RMO) is an offence under Section 7(1) of the Capital Markets and Services Act 2007.
The SC urges Malaysian investors who have been using Huobi Global Limited to immediately cease trading through its platform, withdraw all their investments, and close their accounts.
Investors are strongly advised to invest and deal with RMOs that are registered with the SC. Registered RMOs have undergone strict regulatory scrutiny and are required to adhere to strict guidelines so that investors are protected under Malaysia’s securities laws. Those who invest with unlicensed or unregistered entities or individuals are exposed to risks such as fraud and may not be protected under Malaysian securities laws.
Investors should exercise caution when choosing investment platforms and to always do their due diligence before making any investment decisions. Additionally, investors should be wary of investment schemes that promise high returns with little risk, as they may be too good to be true. By taking these precautions, investors can safeguard their investments and avoid falling victim to fraudulent schemes.
RHB Research recently published the Top 20 Malaysia Small Cap For 2023 (20 Jewels), which marks the 19th edition that is part of a regional compendium of 80 top small-cap investment ideas from four ASEAN countries. Just as market sentiment was beginning to turn following the worst of the pandemic, as the interest rate cycle entered a matured stage, sentiment took another knock from the banking crisis in the US and Europe in the aftermath of the swift monetary policy tightening by the US Federal Reserve.
Local investor sentiment has remained tentative in the past year as investors were drawn to other regional opportunities and asset classes. Nonetheless, investors continued to show interest in winning small-cap ideas to generate alpha for their respective portfolios – especially as valuations have also retraced. The stock selection remains paramount, and investors should focus on fundamentally strong companies that have the potential to deliver above-industry growth, as well as turnaround candidates.
Notably, the Top 20 Malaysia Small Cap Jewels 2022 outperformed the broad market with a holding period return of 15.7%, beating the FBM KLCI’s and FBM SC’s returns of -8.5% and -5.5%.
Without further ado, let’s look at the list of Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) by RHB Research:
1. Aemulus Holdings
2. Apex Healthcare
3. Bonia Corporation
4. Hiap Teck Venture
5. Kumpulan Kitacon
6. Kronologi Asia
7. Lee Swee Kiat Group
8. MCE Holdings
9. Malayan Flour Mills
10. OM Holdings
11. P.I.E. Industrial
12. Scicom (MSC)
13. SDS Group
14. Supercomnet Technologies
15. Thong Guan Industries
16. Tune Protect Group
17. Uzma
18. Vestland
19. VSTECS
20. Wah Seong Corporation
Here’s the Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) at a glance:
Source: RHB Research Team
The Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) are spread across seven sectors with an average market cap of MYR597m. The consumer and industrial products & services sectors feature prominently, making up 50% of our picks. All but four – which are ACE Market-listed – of the 20 names are in the Main Market. None of the 20 companies featured this year are within RHB Research’s existing coverage as they continue to seek new investment ideas.
*All investors are advised to conduct their own independent research into individual stocks that are listed in the Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels)before making any decision to buy or sell. Investors are also advised that past stock performance is no guarantee of its future price.
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.
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
The recent collapse of Silicon Valley Bank (SVB) triggered mass panic in which the contagion effect have unfurled ramifications across the traditional finance industries. One of the main reasons in the SVB post-mortem is the lack of advanced cutting edgetechnologies for risk and regulations in the fintech sector.
In light of SVB and the FTX collapse, people started flocking toDeFi (Decentralised Finance) platforms. the recent collapse of FTX and bank runs actually underscores the need for a more decentralized financial system. When centralized institutions fail, there is no safety net to protect investors. DeFi distributes the risk across a network of users and smart contracts, making it less vulnerable to individual failures. traditional banks started to feel the pressure.
They realized that they needed to adapt or risk becoming obsolete. They started to explore the use of blockchain technology and DeFi, incorporating these systems into their existing infrastructure.
In other words, the collapse of FTX and the subsequent bank runs marked a turning point for the banking industry. It showed that traditional banks were no longer the only option for financial services. DeFi offered an alternative that was transparent, secure, and accessible to everyone. And as more people embrace this new system, the future of banking looks brighter than ever.
Smart Investor recently interviewed Terrence Hooi, CEO and Co-Founder, Singular Technologies to find our more about this topic. But before that, let’s begin by understanding more about non-custodial DeFi.
Terrence Hooi, CEO and Co-Founder, Singular Technologies
Non-Custodial DeFi
Non-custodial DeFi does not require regulatory controls because it is designed to be trustless and decentralized. Unlike centralized financial systems, where a central authority controls the flow of funds and is responsible for ensuring compliance with regulations, non-custodial DeFi operates on a peer-to-peer basis without intermediaries.
In non-custodial DeFi, users have complete control over their funds and can transact directly with each other using smart contracts. These contracts are self-executing and enforceable, meaning that transactions are executed automatically without the need for human intervention.
Since there is no central authority or intermediary involved, there is no need for regulatory controls to ensure compliance. Instead, the rules of the system are built into the code of the smart contracts, which are transparent and auditable by anyone. But again, Singular wants to actively work with regulators like DFSA and MAS Singapore.
Additionally, non-custodial DeFi is designed to be permissionless, meaning that anyone can participate in the system without needing permission from a central authority. This makes it more accessible to a wider range of users and reduces the potential for discriminatory practices or exclusionary policies.
Overall, non-custodial DeFi’s trustless and decentralized design makes it less vulnerable to fraud, hacking, or other forms of malfeasance that regulatory controls are designed to prevent. Instead, its transparent and auditable nature allows the system to self-regulate and enforce compliance with its own rules.
Singular Technologies recently launched a new institutional gradeatomic settlement platform – aptly called “Singular” – that is built on decentralized finance (DeFi) infrastructure. Atomic settlement is a technology that allows for simultaneous execution of multiple transactions or exchanges, reducing the risk of failed transactions or malicious attacks.
Singular’s DeFi platform has been recognized with numerous awards, including the Bold Awards 20’ Europe, Top 10 Fintech Startup, APAC, StartupWorldcup Regional Top Winner 22’, Alibaba Cloud Innovation Awards 22’, and ORIGIN Web 3 Top Disruptor 22’.
Smart Investor: What is the outlook on Stablecoins with looming recessionary and geopolitical pressures?
Terrence Hooi: With regards to the outlook on stablecoins in the face of looming recessionary and geopolitical pressures, there are a few different factors to consider:
1. Potential for increased demand: During times of economic uncertainty, people may turn to stablecoins as a safe haven asset. This could lead to increased demand for stablecoins, which in turn could drive up their value.
2. Potential regulatory challenges: Stablecoins are still a relatively new and unregulated asset class, and regulators may become more concerned about their potential to destabilize financial systems during times of crisis. This could lead to increased scrutiny and regulation, which could impact the growth of the stablecoin market.
3. Impact of inflation: If the recessionary pressures lead to high inflation, stablecoins could become more attractive to investors as a hedge against inflation. However, if stablecoins are not properly backed by assets, they could lose their peg and become vulnerable to inflation.
4. Geopolitical risks: Geopolitical risks can have an impact on the value of stablecoins. For example, if a country decides to ban the use of stablecoins or restrict their circulation, this could lead to a decrease in demand and value.
SI: Why did you and your co-founders decide to launch this product? What are 3 pain points or areas that Singular Technologies’ product addresses which other digital banking solutions or cryptocurrencies do not? How are you unique?
TH: The current state of DeFi Apps are notoriously complex to use and it is not a skill everyone can master. One of the main challenges facing DeFi today is the accessibility and scalability with subpar UX.
The very wealthy have always been able to afford to pay expensive money managers to manage and invest in Crypto, but financial APIs and DeFi in the late ‘Tens’ let Singular extend a similar service to people with a ~$10k net worth instead of ~$5M using Distributed Ledger Technology for the unbankable in emerging markets.
The current financial system is slow and expensive. For example, if you look at global remittances today using ACH or SWIFT, it is often slow and expensive ~2–3days. Compare that to stablecoins like USDC, which maintains a peg to the US dollar, it takes ~3 minutes without relying on any intermediaries.
Singular (SD) is an all-in-one banking and financial services platform for cryptocurrency users. Singular aims to outperform banks using the best elements of DeFi.
SI: Which markets are you currently active in? Any new entries planned in the near term? How has MRANTI assisted you in growth and expansion plans?
TH: US, Singapore & Japan. Japan have always been a hub for innovation, and we are excited to be a part of this thriving community with the help of MRANTI & MaTrade. Our new office will allow us to provide even better support and services to our Japanese users, as well as to collaborate with local partners and experts in the DeFi space.
The Founding team has expertise in building institutional-grade Crypto Exchanges capable of processing 2 million orders per second and building decentralized finance platforms for institutions.
SI: How is your new product purpose-built to promote financial inclusiveness ie banking of the unbankable?
TH: One of the key features of our platform is that it allows users to easily convert between traditional fiat currencies and cryptocurrencies. This makes it easy for users to participate in the global financial system and take advantage of the benefits of decentralized finance.
Our platform is different from traditional financial institutions in that we do not require users to have a traditional bank account or credit history. Instead, our platform is designed to be user-friendly and accessible to anyone with a smartphone and an internet connection. This is particularly important for the unbankable, who may not have access to traditional financial services due to a lack of documentation or credit history.
SI: So how does a person “buy” a stablecoin / Singular Token? What’s the minimum sum / volume or amount?
TH: Min can be as little as RM 100 and can it be traded, exchanged, borrowed, lent to only those w “stablecoins” or is it open to participate in any other crypto exchange?
We’re currently working with an internationally compliant fiat-gateway Xanpool, to allow users from Indonesia, Malaysia, Singapore , Hong Kong, Thailand, Vietnam, south Korea, India, Phillipines to easily use a bank account or CC to purchase Stablecoins like USDC or major cryptos like BTC and ETH.
SI: How do you ensure that your stablecoin remains stable and maintains its peg to the underlying asset, especially during periods of market volatility?
TH: The potential benefits of Stablecoins like USDC or Tether, which are now available on the Singular App. One of the key advantages of Stablecoins is their ability to maintain their peg to the underlying asset, even during periods of volatility. Assets backed USDC for instance is registered with FinCEN and regulated by 46 regulators.
This is particularly important in the context of decentralized finance (DeFi), where users are increasingly turning to Stablecoins as a way to mitigate the risk of market fluctuations. By providing users with access to Stablecoins, platforms like Singular App are helping to make DeFi more accessible and user-friendly for a wider range of users.
Stablecoins like USDC or Tether are designed to maintain their value through a number of mechanisms, such as backing the coin with a reserve of the underlying asset or using algorithms to adjust the coin’s supply in response to changes in market conditions. This ensures that the value of the Stablecoin remains stable, even in the face of market volatility.
In addition, Stablecoins can be used for a wide range of purposes, such as trading on decentralized exchanges, paying for goods and services, or as a store of value. This versatility has made them increasingly popular among users who are looking for a reliable and stable alternative to traditional cryptocurrencies.
Overall, the availability of Stablecoins like USDC or Tether on the Singular App represents a significant step forward for the DeFi industry. By providing users with access to Stablecoins, platforms like Singular App are helping to make DeFi more accessible and user-friendly for a wider range of users.
SI: Can you explain the process of creating and redeeming the stablecoin, and how do you ensure that the collateral backing your stablecoin is secure?
TH: The process of creating and redeeming Stablecoins on the Singular App is relatively straightforward. To create Stablecoins, users can deposit the underlying asset (such as USD) into a collateral pool on the Singular App. The app then mints an equivalent amount of Stablecoins, which can be used for trading or other purposes within the platform. To redeem the Stablecoins, users can simply exchange them back for the underlying asset in the collateral pool.
To ensure the security of the collateral backing of the Singular token, the platform uses a number of mechanisms. One of these is a smart contract that is designed to automatically liquidate collateral in the event that its value falls below a certain threshold. This helps to ensure that the value of the collateral backing the Singular token remains stable and secure.
In addition, the platform uses a combination of on-chain and off-chain mechanisms to monitor the value of the collateral pool in real-time. This helps to ensure that the collateral backing the Singular token is always sufficient to maintain the value of the token.
As Singular continues to develop its platform, it plans to roll out its own native token that is privacy-based. This token will be backed by a collateral pool, similar to the Stablecoins, and will provide users with even more flexibility and functionality within the decentralized finance ecosystem.
Overall, the use of Stablecoins on the Singular App represents a significant step forward for the decentralized finance industry. By providing users with a stable and reliable means of transacting, Singular is helping to make DeFi more accessible and user-friendly for a wider range of users.
SI: How do you plan to scale your decentralized finance solution to accommodate a growing user base, and what challenges do you anticipate in the process?
TH: Singular Milestones 2023
i.Smart Contract based Privacy Token.The Singular Token will be implemented with a smart contract that is ERC-20 compatible as well as privacy-preserving features such as zero knowledge proofs.
ii. To ensure The Singular Token on theSingular DeFi platform are private, the privacy token will utilize zero-knowledge proofs. Allowing two parties to prove the validly of transaction without revealing any information about the transaction while maintaining the integrity of the blockchain.
iii. To facilitate the trading of Singular Token, a KYC baseddecentralized exchange (DEX) will be built on Singular’s DeFi platform. Holders of Singular Token will be able to use Singular Token for zero fee global transfers, high-yield staking, and access to professionally managed decentralized assets. The platform will have robust security and compliance measures to ensure users funds are safe and secure and that the platform is compliant with regulators.
iv. Lending and Borrowing. To enable landing and borrowing of Singular Token, users can lend and borrow the privacy token, with interest rates determined by supply and demand. The protocol will be implemented as a smart contact on the Ethereum blockchain , ensuring the transactions are completely private while operating in a completely decentralized manner.
SI: How do you plan to handle regulatory challenges related to decentralized finance, and what steps have you taken to ensure compliance with relevant laws and regulations?
TH: Singular aims to submit a regulatory sandbox application with the Monetary Authority of Singapore (MAS) and the Dubai Financial Services Agency. A regulatory sandbox is a testing environment that allows companies to experiment with new technologies and business models while still being subject to regulatory oversight.
By participating in regulatory sandboxes, Singular can work with regulators to ensure that its platform meets all regulatory requirements and is safe and secure for users. It also provides an opportunity for Singular to demonstrate the value of DeFi to regulators and policymakers, potentially paving the way for broader adoption of DeFi in the future.
SI: How do you address concerns around transparency and auditability in your stablecoin decentralized finance solution, and what measures do you take to ensure the integrity of your platform?
TH: Every year, more money is lost in DeFi without the hackers being held accountable, resulting in a diminished sense of security with users. Currently, the largest drivers of crypto adoption are centralized exchanges (CEX) like Coinbase who integrate KYC processes. These regulatory measures issue accountability that lead to consumer confidence which DeFi currently lacks.
The Singular DeFi platform facilitates proper regulatory compliance while maintaining privacy by adhering to critical aspects of the users identity. Singular aims to solve these two major barriers that could led to large scale crypto adoption:
Lack of accountability and security in Web 3
Preserving investor privacy while interacting across DeFi protocols
SI: How do you plan to incentivize liquidity providers to participate in your stablecoin decentralized finance solution, and what benefits do they stand to gain?
TH: Firstly, as a liquidity provider, holders of Singular Dollar will be able to earn a share of the transaction fees generated by the network. This means that the more assets you contribute to the liquidity pool, the more fees you will earn. Our platform also offers additional rewards for early adopters and long-term holders, so you can earn even more as you continue participating in the network.
SI: What future developments do you have in mind for Singular, and how do you see the industry evolving in the next few years?
TH: 2023-2024 Singular DeFi platform that supports DeFi applications, including lending and borrowing protocols, automated market makers (AMMs) and decentralized exchange. The smart contracts will be written in a high-level programming language, such as Solidity, and replied on the blockchain network.
The DeFi platform will earn revenue through fees charged on professionally managed DeFi funds programmed on a smart contract. The platform will charge a management fee for the funds under management, typically ranging from 0.5% to 2% per annum. In addition, the platform may also charge a performance fee of 10% to 20% of profits generated by the fund. The revenue will be used to cover operational costs, pay the management team, and generate profits for the platform.
SI: What advice would you give to someone looking to enter the stablecoin decentralized finance space, and what key factors should they consider before getting started?
TH: Before investing in any stablecoin or DeFi project, it’s important to research the market and understand the risks and potential rewards. This includes looking at the track record of the stablecoin, the team behind the project, and the market demand for stablecoins.
DeFi is a relatively new and complex technology, and it’s important to have a solid understanding of how it works before investing. This includes understanding the basics of blockchain technology, smart contracts, and decentralized exchanges.
As with any investment, it’s important to carefully consider the risks and potential rewards before making a decision.
SI: Some transparency in terms of your reserves – how much is cash, how much is treasury?
TH: Singular Dollar privacy token is not yet launched.
Technical analysis is an important tool that traders use to identify potential buying and selling opportunities in the stock market. Support and resistance levels and trendlines are two key concepts in technical analysis that can help traders make informed decisions about when to buy or sell stocks.
In this article, we will explore what support and resistance levels and trendlines are, how they are plotted on a chart, and how they can be used to identify potential trading opportunities.
But is that true by mastering support, resistance & trendline you can make money from the stocks market? Technically yes, if you are using technical analysis to trade a stock and if you are looking to trade in short term.
For longer term, you are advisable to use fundamental analysis as well to study on the company financial health.
Support is a price level where a downtrend is expected to pause due to demand or buying interest. As the price drops, demand for the shares increases and thus forming a support at that area.
It can be seen as an area or zone that is strong enough to stop the stock from falling any further. Therefore, traders and investors use support as part of their decision-making tool.
Buy At Support
Some investors buy shares at support level as they expecting the share price will bounce back upward if the price does not break the support level
Sell When Price Break The Support Level
Investors also use support level as a cut loss point if the price keep falling and break the support
Resistance is opposite to support. Resistance is a price level an uptrend is expected to pause due to selling pressure. As the price increasing, early buyer starts to sell the shares to take profit and thus forming a resistance at that area.
It is an area or zone that is strong enough to stop the stock from getting higher. If the resistance level is very strong, the price may reverse and drop lower.
But what if the price breaks the resistance? When the price breaks the resistance level, this is called as breakout.
A quality breakout is when the price breaks the resistance with high volume. This indicates high demand in the stock as more buyer attracted to the stock and willing to pay higher price.
Sometimes breakout happens when there is positive catalyst related to the company such as increase in earnings, strong quarter / annual result, good news and etc.
What Is Trendline?
Sometimes trendline can be considered as trendline support and resistance levels. Trendline can be upward sloping or downward sloping. Since the stocks market move in trend, trendlines are often used to identify uptrend and downtrend.
Trendlines connect significant highs together or significant lows together. For a trendline to form we need to see at least three touches.
Why It Is Important To Identify Trendline?
The answer is to help determine the current direction of market prices. Have you heard from technical analysts saying trend is your friend until it bends? Identifying uptrend stocks is the first step to perform a good trade. Look for an uptrend stocks, hold the stocks and exit when the trend starts to bend.
Conclusion
Support, resistance levels and trendlines are powerful tools in a trader’s arsenal that can help them identify potential buying and selling opportunities in the stock market. By understanding these concepts and how they can be used, traders can make more informed decisions about when to buy or sell stocks.
As with any trading strategy, it is important to conduct thorough research and analysis before making any trading decisions based on support and resistance levels and trendlines. With practice and experience, traders can become more proficient in using these tools to navigate the complex and ever-changing landscape of the stock market.
