Author Topic: Retail investors are back with A BANG >> Abandon FD , 4D , ASB , Casino !  (Read 633 times)

Offline DR KIM

  • Prince
  • **********
  • Posts: 44,772
WELCOME  BACK....Unties , Uncles , Cikgu(s) , Ex- Gamblers , PTPTN Students  & what not.... :clap: :clap: :thumbsup:

# Better abandon your snailed phased chicken feed@peanut old fashioned  FD 2 %  , ASB - ASM  peanut  4 %  , Magnum / TOTO  4D  , CON FOREX  ,
kaput Genting Casino & what not....

BTW  THANKS to COVID 19  which bring ONG@LUCK to many stock traders in BURSA  & world wide  :beer: :cocktail: :party: :dancing:  :cash: :cash:

TWO decades after the devastating Asian financial crisis and the dot-Com bubble burst, retail or individual investors have once again returned in a big way to Bursa Malaysia, to the point that they have become a stronger buying force than foreign investors and local institutional funds.

Retail investors are not just ruling the local stock market in terms of trading volume, but also in terms of the money they pour into the market.

To put it into perspective, the value of shares traded by retail investors was RM32.3bil in June, which compares significantly to the foreigners’ RM14.6bil and local institutional funds’ RM30.28bil.

In comparison, a year earlier, retail investors’ value of traded shares was only RM5.48bil.

The unexpected surge in retail participation, which took off since mid-March this year, was a major factor that spurred the mini bull run as the FBM KLCI leaped by about 30% in a span of just four months.

Stocks in the small- and mid-cap universe were the clear winner in this retail investor-fuelled rally. The FBM Small Cap Index, for instance, has surged by about 67% from its year-to-date on March 19.

The flood of retail investor-driven liquidity came at the right time to support the local market, considering that foreign funds have been dumping local stocks.

Foreigners have been net sellers for 22 consecutive weeks, and so far in 2020, foreign investors have sold net RM17.8bil on Bursa Malaysia.

But the scenario is no different elsewhere in Asia where foreign fund outflows have largely been the case this year.

The surprise for any veteran investor this time around has been the return of the retail investor. The recent euphoria largely consists retail investor participation and it is reminiscence of what transpired during the height of the super bull run in 1993 and the second board bull run in 1996.

There are, nevertheless, several features that may explain how the latest episode of retail investor surge differentiates from the 1990s.

The ability to do online trading and a robust flow of information, on top of the increase in risk-taking young investors, have made the retail investor story more compelling and different than in the 1990s.

The concern is, however, on whether the retail investors are making informed investment decisions or are they part of an investing herd mentality.

Herd mentality, or the tendency to follow and copy what other investors are doing, while could further fuel a rally, would be detrimental when panic selling or heavy profit taking begins.

Retail investors are typically prone to herd mentality, and in a market full of uncertainties and volatility, they could easily succumb to the market forces unless they are backed with good holding power.

In addition, there is also a huge concern on the flow of stock-related information in today’s world.

In recent years, there have been an increase in online blogs and discussion platforms that focus on listed stocks, much off the books as it would appear from what the regulators are focused on. This is not unique to Malaysia alone, but also to other countries.