Is now a good time to invest in the stock market?

By Zaidi Isham Ismail
editor@dagangnews.com

At the height of COVID-19 in March, something strange brewed in Bursa Malaysia land. At a time when the rakyat are losing their jobs and companies are making losses, the stock exchange on the other hand saw a huge spike in share market activities.

For some strange reason, investors were flocking to the local bourse driving up stocks to a level not seen for a long, long time. Investors are now making a beeline to the local market in droves to snap up the best stocks money can buy.

By right, COVID-19 should spook punters to tie their purse strings tightly. But on the converse, investors are congegating at Bukit Kewangan as soon as the trading bell chimes at 9am every work day.

A conspiracy theory emerged that the investors who are swamping Bursa are not bonafide investors. They are gamblers and hustlers who can't get their fix currently at casinoes which are still not allowed to operate.

Thus they have no where to go but to invest their money into Bursa.

Plausible?
 

Interestingly, Bursa Malaysia chief executive officer Datuk Muhammad Umar Swift had said that up to 60% of new accounts are millenials.

Why is this so?

An investment banker at Maybank Investment said that millenials are fed up with the scarcity of jobs in the local labour market and would prefer to be their own boss which comes with financial freedom.

"At this current moment, the stock market can generate returns as high as 20 percent or more in a single trading day.

That is a lot more compared to fixed deposit or even Amanah Saham Bumiputera which generates a return of 6, 7 or 8 percent a year," said the banker.

Admittedly, the resurgence in the stock market was brought about by "saham" COVID which refers to COVID-19 related counters.

They include rubber glove, sanitiser, face masks, vaccine, hospital beds and others.

Stocks such as Top Glove, Supermax and Hartalega have given stratospherical profits and have injected new found enthusiasm in the  stock market.

As a result, shares transaction value surged to almost RM500 billion, a 80 percent increase between January and June this year.

But even without saham COVID, interests in retail stocks have already been piqued.

Stock market motivator Datuk Seri Nazri Khan's tagline : Biar tak ensem tapi kaya, has also become viral on social media.

Bursa Malaysia is having a field day and everybody knows that the stock market is arguably one of the country's economic indicators.

What this means is that when the stock market is doing well, our economy is also doing well.

A lot has been said about the stock market. Bursa Malaysia can either make you or break you.

And for that, budding stock market players especially the millenials must the very least have basic mininum knowledge of how to trade.

Do not dive headfirst into this financial quagmire as investors can get burned. But with a little hard work, a crash course in financial literacy, a young Malaysian investor cum entrepreneur is born.

Famed stock market legend Warren Buffet started trading when he was 11 starting with US$38. And now he is the iconoclast of all the investors all over the world.

Malaysia will one day too, see the emergence of its very own Warren Buffet. - DagangNews.com

The writer was  former NST Business assistant editor.