Product Code: VF0135CI
The small but fast-developing Malaysian wealth market slowed down in 2015 as global economic trends - particularly weak growth in China and falling oil prices - negatively impacted retail investment values. Fortunately, the market continued to grow and expand as a proportion of the population, and although the heady growth rates of recent years are largely a thing of the past, wealth managers can still rely upon steady expansion within the country's investor class.
- The affluent investor class in Malaysia will number 1 million individuals by 2017, adding almost 200,000 people to the market.
- Going forward, the proportion of retail investments in deposits is set to fall, highlighting the continued evolution of Malaysian investment preferences.
- HNW investors have led the way in branching out into more sophisticated investments, with roughly one quarter of their onshore liquid wealth held in non-traditional investments as of 2015.
- Given its proximity and range of sophisticated investments Singapore remains a constant draw for Malaysian wealth, particularly for HNW individuals.
Verdict Financial's "Wealth in Malaysia: Sizing the Market Opportunity" analyzes the Malaysian wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
Specifically the report:
- Sizes the affluent market (both by the number of individuals and the value of their liquid assets) using our proprietary datasets.
- Analyzes which asset classes are favored by Malaysian retail investors and how their preferences and the development of the local finance industry impact the growth of the total savings and investments market.
- Examines HNW clients' attitudes towards non-liquid investments, such as hedge funds, property, and commodities.
- Identifies key drivers and booking centers for offshore investments by Malaysian HNW clients.
Reasons To Buy
- Benchmark your share of the Malaysia wealth market against the current market size.
- Forecast your future growth prospects using our projections for the market to 2019.
- Identify your most promising client segment by analyzing penetration of affluent individuals in Malaysia.
- Evaluate your HNW proposition by understanding how FATCA and CRS are affecting your HNW clients.
- Review your offshore strategy by learning HNW motivations for offshore investments and their preferred booking centers.
Table of Contents
- The Malaysian wealth market weathered a rough 2014 well
- Key findings
- Critical success factors
SIZING AND FORECASTING THE MALAYSIAN WEALTH MARKET
- Malaysia is developing as a financial center and as a wealth market
- The affluent population is still shy of the 1 million mark
- Investible assets are concentrated within the upper tiers of the wealth market
DRIVERS OF GROWTH IN THE MALAYSIAN WEALTH MARKET
- The retail investment market will see strong growth
- Retail investments are expected to experience improved growth into the future
- The Malaysian investment market is more developed than most markets in Asia Pacific but its retail sector is still focused on deposits
- Growth will be healthy across all asset classes, but investors will turn to mutual funds going forward
- Retail deposit growth will continue to outstrip GDP growth
- Deposit growth moderated in 2015 but will pick up over the forecast period
- Economic growth will be steady rather than spectacular, but will sustain growth in deposits
- The robust bond growth of 2015 will not persist, returning to 2014 levels
- Local wealth managers are highlighting their fixed income offerings
- Equities and mutual funds will rebound to stronger growth in 2016
- The Kuala Lumpur Stock Exchange suffered in 2015
- Equities are a major asset class but have not experienced widespread take-up among consumers
- Mutual funds in Malaysia are mainly equity and bond plays
HNW INVESTMENT PREFERENCES
- Onshore HNW portfolios are concentrated in simple traditional assets
- Just under one quarter of Malaysian HNW assets are in non-liquid asset classes
- Offshore banking is a not insignificant drain on onshore assets
- Offshore investments among HNW investors is slightly below the Asia Pacific average
- The lack of onshore investment options is preventing wealth from coming home
- Australia, Singapore, and Hong Kong are the primary beneficiaries of offshore investment
- Abbreviations and acronyms
- Supplementary data
- Liquid assets
- Mutual funds
- Mass affluent
- Sharia investments
- Global Wealth Model methodology
- The main sub-model
- Global Retail Investments Analytics methodology
- Verdict Financial's 2015 Global Wealth Managers Survey
- Further reading
- About Verdict Financial
List of Tables
- Table 1: Malaysia: adult population segmented by affluent category and asset band (000s), 2009?14
- Table 2: Malaysia: adult population segmented by affluent category and asset band (000s), 2015e?19f
- Table 3: Malaysia: total liquid wealth segmented by affluent category and asset band ($bn), 2009?14
- Table 4: Malaysia: total liquid wealth segmented by affluent category and asset band ($bn), 2015e?19f
- Table 5: Malaysian ringgit-US dollar exchange rate, December 31, 2014 and December 31, 2015
List of Figures
- Figure 1: The core affluent investor market remains restricted to a tiny (but growing) elite
- Figure 2: More than half of all financial assets in Malaysia are held by mass affluent investors
- Figure 3: Growth moderated in 2015, reflecting a weaker oil and gas sector, but is expected to improve in 2016
- Figure 4: Deposits dominate Malaysian investors' onshore holdings
- Figure 5: The outsized share of deposits in the Malaysian market has held back growth
- Figure 6: Retail deposits should see steady growth over the forecast period, but the heights of 2011?12 are behind the market
- Figure 7: Bond growth was healthy in 2015, but a return to 2014 growth seems likely
- Figure 8: The stock market in Malaysia has struggled since 2013
- Figure 9: Equities and mutual funds will see stronger growth in 2016
- Figure 10: Mutual funds in Malaysia are still mainly a way to gain equity exposure
- Figure 11: HNW investors have been relatively open to alternatives, strongly favoring property
- Figure 12: HNW Malaysians rank well below other Asia Pacific markets in terms of offshore investments, but the share is increasing
- Figure 13: Perceptions of a better range of investments compels HNW investors to book assets abroad
- Figure 14: Local booking centers attract the bulk of Malaysian offshore investment
- Figure 15: Malaysia has pursued comprehensive DTAs