Why Ordinary Investors Are Shunning Bursa Malaysia

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I refer to the letter, “Stock market fastest way to stimulate economy”, as published in Malaysiakini today
I think the views presented in the letter are not holistic and comprehensive. In fact, they are quite one-sided and biased
To me, it is not surprising that the Malaysian stock market has lost its lustre. The market is no longer a venue for investment, but rather more for speculative play and gambling
Let’s be realistic, I think for speculative play and gambling, ordinary investors stand no chance against corporate bigwigs and insiders
May I ask how many percent of the listed companies in Bursa Malaysia today are of investment grade? My estimate is not even exceeding 20 percent
These companies raised money from the market, but do they really care for returns to shareholders? How many companies have provided decent dividends, if at all declared any dividend, to shareholders
To me, many of these companies with listed status are nothing more than “conduit” for them to print money. They exist mainly for the sole benefits of those who are in control of the companies. The management and the controlling shareholders are being lavishly rewarded while shareholders who provided the funding are given pittance or nothing
Even seemingly investment stocks are going nowhere. Sometimes I wonder why Malaysian owned companies have not made as much profits as some foreign-owned companies listed in Bursa Malaysia
If we want to make Bursa Malaysia an investment destination of choice, the strategy is not to allow every Tom, Dick and Harry to list their companies. I have seen too much abuse on this. On the contrary, we must be more selective to allow companies to list
I understand caveat emptor must be the basic guiding principle of investing. However, if the market is ineffectively regulated and infested with poor governance, I think it is difficult for ordinary investors to make choices. We can’t blame them for shunning the stock market if their experiences have been less than encouraging
Instead of encouraging more people to invest in the stock market blindly, the focus should be on making the market more efficient and transparent. The authorities must monitor the listed companies to prevent them from indulging excessive corporate abuse for the benefits of controlling shareholders. Sometimes I see captains of industries and bosses of corporation destroying rather than creating values
I think there is no such thing as “great companies trading at depressed value” or bad companies trading at a boisterous price if the stock market is relatively efficient and transparent
Right now, many ordinary investors choose not to invest in the stock market because the odd is not in their favour. Short of using harsh words, many listed companies are con jobs. - Mkini

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