Malaysia Regulator Welcomes Rush of Small Investors Into Stocks

(Bloomberg) -- Malaysia’s Securities Commission said the recent surge in retail investors is a boon for the country’s stock market and doesn’t pose a risk.

“We are happy to have the retail investors back and in the market,” Securities Commission Executive Chairman Syed Zaid Albar said in a Bloomberg Television interview with Haslinda Amin on Tuesday. “At the moment, what we can say is that it is helping the activities and vibrancy of the market.”

Malaysia’s benchmark stock index has rebounded more than 30% from a low in March, as small investors flocked to the battered stock market, sending trading volumes to a record high. The surge in trading came after the government implemented stimulus measures and interest rate cuts to weather the pandemic-induced economic downturn.

Read more: Small Investors Send Malaysia Stock Volumes to Record High

The Securities Commission, the country’s capital markets regulator, also introduced a slew of measures including a temporary ban on short-selling to ease stock volatility.

Local retail investors have bought close to 6.4 billion ringgit ($1.5 billion) of shares as of the end of June, making up 29% of the total value of shares in the market, up from 21% for the whole of last year, said Syed Zaid.

“Although it might be too early for us to say that the increase in retail participation is a good sign of their confidence in the companies yet, it is definitely a good sign,” he said.

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