From November 20-22, Bursa Malaysia Berhad in partnership with CGS-CIMB Securities Sdn Bhd will be hosting the inaugural InvestHack hackathon event.
Themed “InvestHack: Reimagine Investing”, its goal is to develop innovative solutions and offerings that can enhance retail investor participation in the marketplace.
Dictionary Time: A retail investor, also known as an individual investor, is a non-professional investor who buys and sells securities, mutual funds, or exchange traded funds (ETFs) through traditional or online brokerage firms or other types of investment accounts. Retail investors purchase securities for their own personal accounts and often trade in dramatically smaller amounts as compared to institutional investors like pensions, endowments or mutual funds.
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Supporting the competition are Malaysia Digital Economy Corporation (MDEC) and the Malaysian Global Innovation & Creative Centre (MaGIC).
InvestHack has free registrations for those who meet the requirements, and the top 3 winning teams will enjoy a total cash prize of RM35,000, but more on all these later.
Of Course, We Have Existing Retail Investing Solutions
“In Malaysia, most brokers offer online trading platforms and solutions to their respective clients. This includes StashAway, MyTheo, Wahed Invest and Invesk by Kenanga, to a name a few,” a Bursa Malaysia rep told Vulcan Post.
Investors have much more control over their investments by overseeing and trading their portfolio directly, which is more efficient, convenient, and cost-effective.
However, Bursa Malaysia believes that there’s a need to ensure investors are well-informed with access to pertinent and relevant information on the market.
Their broker partners have made this available to their clients through research reports, analysis, market information, educational talks, and webinars.
At the exchange, several initiatives to do the same have been taken through its platforms like Bursa Marketplace, Bursa Academy, and Mirror, Learn & Trade (MLT).
… But Here Are The Remaining Problems
“The current solutions that are available for the local market are very much transactional based. They still do not cater to investors who want to learn how to participate in the market,” the rep said.
“Questions on ‘how’, ‘where’, and ‘what’ to buy are the questions that are most commonly asked. The share market has also always been perceived as being risky.”
With proper analysis and investment plans though, this is often not the case.
Investors also want access to platforms that are easily understandable, which Bursa Malaysia said are still lacking in the market.
“Another area that we believe needs immediate address is making share investments more affordable for everyone.”
Promotional content and hype by celebrities and unlicensed individuals are also no strangers to the market, and investors have to be wary of these as herd mentality still sways the public when making investment decisions.
“Misleading promises of quick earnings and returns can often lead to the wrong decisions being made by investors,” the rep explained.
“It is not uncommon to learn about investors being left vulnerable in the stock market due to becoming influenced in this manner.”
Once investors find themselves losing money, they end up discouraged and leave the stock market altogether.
The Numbers Prove That Retail Investing Is On The Rise
During the MCO, retail trades recorded its highest level in 10 years.
As of October 2020, the average daily value (ADV) traded by retail investors amounted to RM1.35 billion. This represents a 214% increase from 2019, and a 260% increase compared to the ADV recorded in the past ten years.
Additionally, as of October 2020, Bursa Malaysia registered a total of 347k new Central Depository System (CDS) account openings.
This is a 118% increase versus the total accounts opened for the full year of 2019, signifying a shift towards investing in the stock market.
“Given these developments in the retail investing scene, we are taking the initiative to engage the fintech community as innovative disruptors to strengthen the retail investor base,” Bursa Malaysia’s rep said.
“Having active participation by retail investors is essential towards a vibrant securities market. It improves liquidity as well as its depth.”
InvestHack is only one such activity that Bursa Malaysia has up its sleeve to drive the long-term sustainability of our marketplace.
Now, here’s what the event is set to do.
Challenges To Address
In total, there are 4 challenges that teams can pick one from to address.
Challenge 1: Attracting more Malaysian retail investors to share investment in the stock market.
As of June 30 2020, Malaysia’s employed population is estimated to be 14.99 million (~45.8% of our total population). Approximately, 7.6% of these individuals invest in Malaysian equities. How can we increase the participation of retail investors in Malaysian equities?
Challenge 2: Improving financial literacy among Malaysian retail investors.
1 in 3 Malaysians rate themselves as having low financial knowledge. Bursa Malaysia has endeavoured to educate Malaysians through online platforms such as BursaMKTPLC, MLT and Bursa Academy. But how do we further improve the financial literacy of Malaysians?
Challenge 3: Assist Malaysian retail investors to overcome herd behaviour when investing in the stock market.
The need for quick decision making when important news flashes on trading screens can put retailers in a vulnerable situation, so they follow the herd to feel secure. How do we assist Malaysians in making informed financial decisions quickly?
Challenge 4: Addressing the commonly asked question: “Do you have any stock tips?”.
Who Can Join?
You can join InvestHack so long as you’re:
- Aged 18 and over,
- A Malaysian or non-Malaysian with a valid Malaysian PR work/student permit.
It is a team based competition, so you will need a minimum of 3 to a maximum of 5 members, with at least 1 coder.
What Prizes Do I Get For Winning?
From the 3 winners:
- The champion will win RM20,000 and a trophy,
- The first runner-up will win RM10,000 and a trophy,
- The second runner-up will win RM5,000 and a trophy.
All winning solutions stand a chance to potentially collaborate with either Bursa Malaysia or CGS-CIMB to launch their solution in the capital market.
The Timeline
To join, you’ll have to register before or by November 15, 2020. You can do that here.
On November 16, you’ll receive a Kickoff Kit during the Pre-Hack Virtual Briefing session.
Once the virtual hackathon ends at 12PM on November 22, the announcement of semi-finalists will happen on November 26.
The semi-finals will take place on November 28.
Grand Finals will happen on December 5, 2020.
While most of the event may be virtual, the Grand Finals may be held at Bursa Malaysia’s HQ in KL, but it will be subject to the government’s SOPs if necessary and may go virtual too.
- You can find out more about InvestHack here, and Bursa Malaysia here.
- You can read more investment-related articles here.
Featured Image Credit: Datuk Muhamad Umar Swift, CEO of Bursa Malaysia Berhad