Thursday, June 20th, 2019
BRUSSELS, June 20 — Irish Prime Minister Leo Varadkar warned today there is “enormous hostility” in the European Union to allowing Britain to delay Brexit once again to seek new concessions from Brussels. Varadkar spoke as he arrived for an EU…
NEW YORK, June 20 — Apple Inc said proposed US tariffs on goods from China, including iPhones, iPads, and Macs, will reduce the company’s contributions to the US economy and hurt its global competitiveness. The US government should not move…
NEW YORK, June 20 — Wall Street stocks sprinted higher early today, celebrating the new dovish tilt of the US Federal Reserve and lifting the S&P 500 back into record territory. Stocks rose modestly yesterday following the Fed announcement,…
PARIS, June 20 — Airbus called today for a chance to compete for a blockbuster plane order by British Airways owner IAG which stunned industry executives at this week’s Paris Airshow by ordering 200 of Boeing’s grounded 737 MAX. Airbus…
LONDON, June 20 — Oil rose more than 3 per cent towards US$64 a barrel today after Iran shot down a US military drone, raising fears of a military confrontation between Tehran and Washington. Expectations that the US Federal Reserve could cut…
NEW YORK, June 20 — The S&P 500 index was set to open at a record high today, after the Federal Reserve reassured investors that it was ready to cut interest rates as soon as next month to counter growing risks to global and domestic growth….
KUALA LUMPUR: The local asset management industry is reaching an inflection point signalling a slowdown in future growth, according to Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Albar.
“Concerns over the growth trajectory were also given impetus as industry shortcomings were increasingly raised by investors and industry players themselves,“ he said at the launch of the first joint research report by the Institute for Capital Market Research Malaysia (ICMR) and Japan’s Nomura Institute of Capital Market Research (NICMR) today.
Over the last 20 years, the asset management industry has recorded strong growth with a compound annual growth rate of 16%.
However, the country’s asset under management saw the first decline since 2008, falling 4.2% to RM743.6 billion in 2018 from RM776.2 billion in 2017. This compares with the Malaysian capital market which was valued at RM3.19 trillion as at end-April 2019.
Unit trust funds (70%) is the biggest segment within the asset management industry.
The joint report highlighted there are signs of a slowdown amidst fundamental shifts which are expected to alter the industry, which include changing demographic trends and investor preferences, the advent of digitalisation, availability of talent, as well as changes in market regulations and structure.
ICMR director Datin Azleen Osman Rani (pix) highlighted that the asset management needs a revitalisation and innovation, given the fast-changing financial and economic landscape.
“The report helps us assess the long term potential for asset management in Malaysia, and what needs to be done to ensure its sustainability towards the future,” she said.
Digitalisation within the industry is one of the issues raised by the report. In this regard, Azleen said there is a need for agents to quickly transform themselves.
“Digitalisation will see the introduction of robo-advisory that will enable the industry to leverage on technology to provide complex information in a simplistic manner to their customers.”
In the future, she said, agents will have to deal with the adoption of robo-advisory and to be able to provide even more value-added offerings than its digital competitors.
“It is well discussed in the industry for the agents to move up the value chain and provide comprehensive financial advice. Digitalisation will also see the robo-advisory linking up with other fintech offerings. The landscape will be very difficult for the agents.”
Moving forward, the issue of digitalisation also needs to be addressed by the regulators.
Azleen said from a regulatory perspective, there has been more innovation coming through robo-advisory. “For example, in Indonesia, robo-advisory has linked up with payment systems to provide microinvesting.”
Australian micro-investment app Raiz Invest is expected to make its debut in the Indonesian market in the third quarter of this year. The app will allow users to collect spare change from their debit cards and e-wallets transactions, rounding up to the nearest 5,000 rupiah (RM1.46) and once it hits a threshold of 10,000 rupiah (RM2.92) it will be automatically invested in mutual funds.
“Perhaps, this is something that regulators could consider going forward,” Azleen said.
ROME, June 20 — Italy’s Prime Minister Giuseppe Conte has pledged to abide by EU fiscal rules, while insisting his country’s financial health is on the mend, despite its slowing economy. “We do not intend to ask for exceptions or concessions…
PETALING JAYA: The joint research report compiled by the Institute for Capital Market Research Malaysia and Japan’s Nomura Institute of Capital Market Research has identified four structural challenges faced by the local asset management industry.
1. Changing demographic trends and investors’ preferences.
Retail investors are demanding access to a wider range of products to match their varying profile, risk appetite and returns expectation. There is a growing demand for more international options from regional fund registration blocks to be allowed to be distributed locally.
Inspired by the digital experience they encounter in their daily lives where prompt or immediate gratification ensues, investors are beginning to demand a similar level of experience from their financial service provider. This takes shape in the form of innovative investment solutions which offer greater convenience, channel access, transparency and lower cost.
It is essential to assess if there exist any barrier prohibiting talent building and inflow as well as if existing talent incentives for the industry are sufficient to develop and retain the required human resource for the advancement of this asset management industry.
4. Market regulation and structure.
As regulators increase their oversight on asset managers, asset management companies have to congruently strengthen compliance through staff and system upgrades to cope with the dynamic and evolving operating environment. In line with this there is also a need for greater coordination among regulators so as to achieve a harmonised approach for efficient reporting and to minimise displacements and repetitive procedures within the industry.
In response to the challenges faced by the asset management industry, the report has come up with the following recommendations:
1. Facilitating market diversity for revitalisation.
2. Going beyond mere capital with differentiated strategies.
3. Developing talent through internationalisation and reciprocal relationships.
4. Embracing digital distruption.
5. Making Private Retirement Schemes a more attractive option.
6. Widening product range.
7. Strengthening the value of distribution channels.
8. Embedding financial literacy.
9. Establishing a high-level task force to address regulatory and policy harmonisation.
Retail investors are demanding access to a wider range of products. BERNAMAPIX
LONDON, June 20 — The prospect of Britain crashing out of the European Union without a deal has risen since last month, the Bank of England warned today, as it kept interest rates unchanged. “Domestically, the perceived likelihood of a no-deal…