PETALING JAYA (July 10, 2013): Malaysians hold over half of their assets in cash - the most of all Asia markets surveyed, according to the latest Manulife Investor Sentiment Index in Asia (Manulife ISI) based on 3,500 interviews across seven Asian markets.

Overall, the single biggest asset holding for Asia investors is cash, amounting to an average of 52% in Malaysia, the highest in the region. Malaysia investors’ proportion of cash for day-to-day and unexpected expenses is also the highest in the region - at 14% above the regional average.

“One reason investors are holding on to cash may be a lack of self-confidence in moving into other asset classes and/or the lack of investment knowledge. When asked what would influence them to move their cash to other asset types, well over half indicated they would only do so if the investment provided guaranteed income,” said Manulife Asset Management Services Bhd chief investment officer Jason Chong in a statement yesterday.

He said similarly, many investors cited concern over “making the wrong investment decision” as the number one reason for not investing.

Malaysia investors were also found to have the second highest net sentiment towards investing among the seven countries surveyed.

Despite a drop since the last survey, Malaysia remains far more optimistic than the regional average, with the second highest index score behind only Indonesia. Hong Kong is the least optimistic and the only market with a negative sentiment score.

Overall, however, there was an upward trend in investor sentiment in Asia.

Manulife ISI in Asia is a quarterly, proprietary survey measuring and tracking investors’ views across seven markets in the region on their attitudes towards key asset classes and investment vehicles.

Though the survey indicates that Malaysia respondents are holding idle cash, nearly half of respondents said they do not hold enough cash. Only 2% said their cash holdings were too big.

The survey however found that compared with the survey in March 2013, respondents have rebalanced their cash with more stocks.

This rebalancing was led by those aged 25-39, whose stock holdings as a proportion of assets rose from 3% to 11%. Apart from this, though, Malaysian investors have not significantly increased their investments into other investment vehicles or asset classes such as property and unit trusts, despite the positive sentiment towards those asset classes.

“This increase of stocks may have come from the easing of political uncertainty and the post-elections stock market rally. Despite this increase, stocks and equity still constitute a small and less-than-optimal percentage of Malaysia investors’ overall investment portfolio.” said Manulife Holdings Bhd group CEO Mark O’Dell.

A new aspect of the survey covering Malaysia indicates that investors are positive towards investing. Almost half said that now is either a good or very good time to invest, with only 15% saying it was either a bad or very bad time, the balance being neutral.

Over half of Malaysian investors surveyed also said they expect Bursa Malaysia’s performance to improve in the next 12 months, the top reasons being that “the market is very stable” or “the employment situation is getting better”.

Despite this strong positive sentiment towards Bursa Malaysia’s performance, overall investor sentiment towards stocks and equities is the lowest of all asset classes, unchanged from the last survey. The most positive sentiment towards stocks was among young investors (25-29 year olds), possibly due to a higher risk appetite.

By thesundaily.my

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