For the past few years, there has been the rise of "fake gurus" and many "finfluencers" that provide investment advice to the public be it with the best intention or otherwise.
This has brought about a significant challenge for the regulators especially Securities Commission (SC) and Bursa Malaysia.
While it is in the best interest of our country's capital markets to have more retail participants in the stock market, however, providing unregulated investment advice is not only against the law but strictly prohibited by regulators because it may open the floodgate to pump and dump or share price manipulation activities.
Acknowledging the importance of promoting investment literacy, Bursa decided to lead the way and launch its inaugural Bursa In-Depth Equity Analysis (IDEA) research competition. This proactive measure is to acknowledge up-and-coming researchers and analysts who are interested in writing reports related to the sectors and stock market.
This competition not only provided a platform for emerging talents but also significantly enhance the vibrancy and credibility of the capital market.
The grand prize of RM5,000 was awarded to Te Ren Kai for his research report, "Water Utilities – Boring is the New Sexy," which positioned water utilities as a defensive stock with a high and consistent dividend coupled with a long awaited catalyst for potential stock price re-rating for the sector.
Born in Penang, Te said he chose to focus on water utilities due to numerous reasons. Among them was that water tariffs have not been revised for at least eight years, and a revision in domestic tariffs would be a huge needle mover as 63 per cent of water is consumed by domestic users while 37 per cent are non-domestic, according to the National Water Services Commissions as of 2022.
On the difficulties that he faced while carrying out the research, Te said the challenges range from obtaining accurate and timely data to navigating the complexities of the financial landscape, encompassing company financials, market trends, and policy intricacies.
In addition, there was some information which was not freely available on the public domain. He had to sought out further information from the Malaysia Water Association which is made up of all the water industry market players in the country.
"For a report to be comprehensive, there must be sufficient data to provide legitimacy. But what is more crucial is writing a report that has actionable idea. I do not believe in coming up with lengthy report with no actual actionable outcome as it would be a waste of time for both the writer and the readers," he said.
Te, who holds a Bachelor degree in Mechanical Engineering from Loughborough University, is an investor relations (IR) practioner who has always been interested in stock investing.
"Effective investor relations can play a pivotal role in uncovering hidden gems within small capitalisation companies and getting the attention they deserve," he added.
Another winner, Nik Mohd Izzul Azfar Nik Razali, secured the third prize of RM1,000 with a 66-page research report. His exploration of gold as a safe haven is particularly relevant amid ongoing economic uncertainties that often lead investors toward stable and defensive assets.
Nik Mohd Izzul Azfar who holds a Master's degree in mechanical engineering from University of Technology (UTBM) said he has been learning and exploring the world of stocks and investments since he was young.
He said the win has motivated him to delve deeper into the intricacies of the stock market.
"At least I know I am on the right path and doing the right thing in learning more about the stock market," he added.
The competition, in aligning with Bursa's commitment to nurturing talent and fostering capital market growth, featured a panel of judges, namely, Loui Low, head of research at Malacca Securities, Dr Rosnani Rasul, head of research and acting chief executive officer of BIMB Securities, Kenneth Leong, head of research at Apex Securities, Bobby Lee Chia Yih, director at CFA Society Malaysia and Ng Zhu Hann, chief executive officer of Tradeview Capital Sdn Bhd., who assessed the reports based on its presentation structure, research methodology, coherence of ideas and risk analysis.
With over 100 entries, the competition held from Oct 9 to Nov10 demonstrated substantial interest, particularly in topics related to the semiconductor industry.
Bursa's dedication to regulating and white-labelling reports is a commendable move toward enhancing transparency and reliability in the market.
In an era where misinformation and scams can influence public perception, having a reliable platform for verified research reports provides retail investors with a trustworthy source of information that would spur informed investing.
It is important to recognise that retail investors can be a potent third force in the stock market like how developed markets such as South Korea has exhibited.
Therefore, having a growing number of informed retail investors is the best way to elevate the local bourse and countering the proliferation of scams or get-rich-quick schemes.
*The writer was a journalist with the New Straits Times before joining a Fortune Global 500 company. She is now with Impact Advisory Sdn Bhd, a public relations/investor relations company.
