There seems to be a relentless stream of critical commentary on Pakatan Harapan (PH) since it assumed the rein of government nearly a year ago. The overarching narrative is one that sees a steep slide in public confidence in PH governance.
Beside plugging all the loop holes, jailing all the corrupted politicians and corrupted government officials, I think the fastest way to stimulate our economy is by encouraging people to invest in the stock market so that entrepreneurs can raise more funds to expand their business operations. As a result, they can make more profit to pay more taxes which the government requires to function efficiently. The government can use the money to build better infrastructures and other facilities to stimulate our economy.
Currently, less people are investing in stock market than previously. Bursa used to have a total of 4.4 million of CDS accounts, now it only has 2.5 million. Bursa registered an average of 100k accounts openings each year. Yet the total figures of CDS account still stood at 2.5 million since 2014.
25 years ago, we were one of the largest trading stock market in the world. During our heyday, our brokers were filled with money literally, our economy was prosperous and growing. Our capital market back then was awash with hot money, and it fuelled the speculations of common people dream. Those golden days are no more.
Today, people don’t even dream about stock market. Our entrepreneurs are no longer aspired to raise funds from stock market, nor do the men in the street wish to participate in the opportunity that offered by our best and brightest entrepreneurs. Stock market has become a boring place.
It is not that our entrepreneurs lost their shine. They just shunned our stock market. Entrepreneurs do not see stock market as the channel to raise funds. They can issue bond, get bank financing or dispose assets. Investors do not see stock market as a path to build their wealth. They invest in property, bonds and fixed deposits. The last thing that comes to everyone mind is the stock market.
How hard things have fallen. I see great companies trading at a depressive valued. And there is no light at the end of the tunnel. I see people giving up on stock market; there isn’t any gold mine to dream of. After many years, the journey been lonely and only some of us survived, scraping by each day. Not exactly a great sight.
About 25 years ago when I co-founded IJM Corporation Bhd, its market capitalisation was below Rm 1 billion and very quickly it expanded to have a market capitalisation exceeding Rm 10 billion.
I believe the fastest way to stimulate our economy is for the PH government to encourage entrepreneurs and investors to list their companies in the stock exchange to raise more funds to expand their businesses.
I wish to suggest the PH government instruct the officers from Bursa and Securities Commission to wake up and start working. Listen to your direct customers. Years after years the investment community is not widening, but shrinking.
They must be mindful of the ruinous effect of the unit trust. Unit trust industry as a whole collect fee no matter what happens. It pays for the parties of managers, promoters, and analyst. The fee amounts to billions given that the size of such industry is in hundreds of billions. Promote low-cost ETFs as alternative instead. Encouraging these unit trust isn’t helping the market any more as we are oversaturated with unit trust. There are 1800-unit trusts and there are only 1,100 listed companies. This does not make sense. The industry is addicted to unit trust rather than other alternatives is due to the lucrative nature of these industry as it kills the fee that incumbents enjoying.
The very basic thought is to get back people into stock investing. Start launching initiative and creating program that worked. Get out of the building, go to the universities and colleges. Engaging real people and get feedback that can be built upon. It’s been a long time since we see anyone championing stock investment at the universities and colleges where the young and bright gather. Instead of waiting at office worrying and analysing the number, hear what people want to say. Find influencer and engage them instead of penalise them. Showcase the best listed companies instead of letting them lying low. Have an aggressive mindset. It’s been ages since we had a good time and hurrah listening to the captain of industry.
I trust readers will circulate my article to all their contacts and hopefully they will circulate it to all their contacts. Eventually it will reach the relevant persons from Bursa and Securities Commission.