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Malaysian Investor Outlook 2015

Via Business Today : Some interesting Malaysian findings were revealed by the Franklin Templeton Global Investor Sentiment Survey (GISS) Malaysia for 2015 where investors seem optimistic, prudent and cautious in their outlook.

According to the findings, a strong majority of Malaysians are optimistic in reaching their investment goals and they also noted that risk management is important to them. The findings also revealed a more cautious approach to investment strategies this year.

The Franklin Templeton GISS is one of the largest investor sentiment surveys, and polled over 11,508 investors globally across Asia Pacific, the Americas, Europe and Africa, including 500 Malaysians. The survey is a barometer of the respective country’s perception towards investing and expectations for 2015 and beyond.

Sandeep Singh, Country Head-Malaysia of Franklin Templeton Asset Management (Malaysia) Sdn Bhd (FTAM) says: “It is encouraging to see the growing sophistication among local investors. More investors are looking to diversify away from their home-country market, they understand the importance of risk management and are also relatively patient.”

A Prudent & Relatively Patient Investor

According to the poll, an overwhelming majority of the Malaysian respondents (81%) are optimistic that they will reach their financial goals – with retirement, purchasing a new home and investing in or starting a business to be their top investment goals. A majority of the Malaysian respondents (64%) cited having an investment manager with risk management expertise as ‘very important’ to them.

Singh explains: “At Franklin Templeton, we take a disciplined approach to risk management by looking at it from three angles or the 3Rs of risk management: it should be recognised and understood at the security, portfolio and operational levels; rational, such that decisions should be an intended part of each portfolio’s strategy; and every risk should be rewarded accordingly.”

There was also a growing conservatism among the local investors this year. 71% said they will be adopting a more conservative investment strategy in 2015 compared to 55% of the investors globally, at average. On an individual country basis, this ranks them as the most conservative globally, followed closely by Brazilians and respondents from the United Arab Emirates with 70% and 65% of its respective respondents citing they will change their investment strategy to be more conservative this year as well.

There was also a sense of cautiousness towards the Malaysian stock market this year. 39% believed that the local stock market will be down in 2015, while 31% believe it will be up and 30% think the market will be flat this year. More investors indicated a decline in market performance expectation this year compared to last where 17% cited market was down in 2013 and 32% cited market will be down in 2014.

When asked about their investment concerns, 53% cited inflation, 42% chose falling oil prices and 40% were concerned of the state of the local economy. The findings also revealed a shift in Malaysians from matching market performance towards losing less when the market is down. Those who look to lose less when the market is down increased from 17% in 2014 to 29% in 2015.

On a more positive note, contrary to popular believe of Asian investors generally having a shorter investment time frame (i.e. weeks or few short months), only 7% of Malaysian respondents cited that they will evaluate investment success within less than six months’ time frame and more than a third (38%) of them have three years and beyond time horizo. In comparison, 12% of Hong Kong respondents believe investments should be reviewed in less than six months.

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