KUALA LUMPUR (Aug 18): Bursa Malaysia said the number of new central depository system (CDS) accounts opened in January to July 2020 jumped 125% to some 218,000, from about 97,000 a year earlier, due to apparent strong interest among retail investors in the stock market.

Hong Leong Investment Bank (HLIB) Research's note today quoted Bursa senior vice-president of retail marketing Patrick Ng as saying that given the unprecedented surge, he guided that there is roughly a two- to three-month backlog of pending new accounts of about 100,000.

"65% of these new accounts comprise millennials (i.e. those aged 25-40),” HLIB Research quoted Ng as saying during a virtual meeting between Bursa and the research house.

HLIB Research analyst Jeremy Goh wrote in the note that while there was no clear-cut answer as to why retail investors came in strongly to the market, Ng believed this was possibly due to the low-interest-rate environment, which might have prompted retail investors to seek higher returns from bashed-down equities due to the impact of the Covid-19 pandemic.

According to Goh, Ng also indicated that retail investors came in strongly to the market, possibly due to them having more time to participate in the stock market during the Covid-19-driven movement control order (MCO) period, coupled with the absence of gambling avenues, which could have prompted gamblers to take their thrill-seeking nature to the stock market.

According to Goh, the meeting takeaways reaffirmed HLIB Research’s positive stance on bourse operator and regulator Bursa’s earnings outlook.

"We also maintain our 'overweight' stance on gloves, the sector that has garnered the highest interest among retailers,” Goh said.