Why are young people shunning Bursa?

Blog from Anil Netto why so few young adults invest on Bursa Malaysia. He also refers to a query he emailed to Bursa that went unanswered. I am afraid I have had very similar experiences with Bursa.

The comments to this article are also telling.

"Few young adults are investing in the Kuala Lumpur stock market. A survey has revealed that only 12 per cent of investors are in the 20-29 age group, while 59 per cent involve those 40 years and above.

Some have cited possible reasons: the high risk factor involved in investing in the stock market; young people preferring to spend their money on property, cars and movies;  a lack of education about how to invest, etc.

I have my own theories.

Perhaps young adults, now with more access to independent information, are looking for more stable, secure investments rather than the speculative roller-coaster ride that is the Bursa Malaysia, especially in these days of economic uncertainty.

Or quite simply, many young adults don’t have enough spare cash to invest as their income levels are unable to cope with the rising cost of living. After buying a house and a private vehicle (due to the inadequate public transport) – and you know expensive those can be – and having to cope with rising fuel and food prices, how much spare cash do you think young adults will have left over to invest in the Bursa? Of course, there are study loans to repay as well.

Some of these young people might even think, why should we let the tycoons with access to capital (the young investors’ hard-earned money) earn huge profits – sometimes in ‘cronyistic’ or monopolistic businesses – in return for meagre dividends? Maybe they can see more clearly through the whole charade?

The other issue is one of confidence – or the lack of it. My emailed query to the Bursa in November 2009 has gone unanswered despite a reminder. I had posed the question to Bursa: if a listed firm fails to meet the minimum 25 per cent public shareholding spread requirement, what is the maximum duration allowed for it to comply? Is there a time limit at all?"