CGS-CIMB Research revealed that Bursa Malaysia has seen a 125% year-on-year increase in new central depository system (CDS) account openings in the first seven months of 2020. Of the total new accounts made, 78% belonged to investors aged less than 45 years old.
With this substantial spike, the research house said that millennials now make up 36% of the total CDS accountholders. To clarify, CDS accounts are mandatory accounts that must be opened before investors who wish to trade on Bursa Malaysia can carry out any transactions on the local bourse. Once registered, the investors’ trading activities, such as the crediting and debiting of their securities, will be conducted through the account.
“We view the increasing direct participation by millennials in the equity market and rising adoption of online trading as positive developments that will sustain retail trading activities,” said CGS-CIMB Research.
According to the research house, the surge in interest could be indirectly attributed to the Covid-19 pandemic as the Malaysian public was obligated to stay home during the movement control order (MCO) period. Malaysians – some of whom enjoyed more liquidity due to the economic stimulus plans implemented by the government – were also likely attracted to the equity market due the lack of attractive investment alternatives that offer high returns with a declining interest rate.
Apart from noting the increase in millennial investors, CGS-CIMB Research also said that online trading by retail investors has grown from 50% to 60% in 2019, to 80% in July 2020. The top five sectors that they traded in between January to July 2020 were industrial products and services (21.6% of total retail traded value), healthcare (19.59%), technology (16.2%), consumer products and services (12.48%), and energy (7.34%).
(Source: The Star)