by ASILA JALIL/ pic by RAZAK GHAZALI
STANDARD Chartered Bank Malaysia Bhd (StanChart) saw a spike in the digital client engagement on financial planning during the Movement Control Order period brought on by the Covid-19 pandemic.
The bank registered a significant increase in the digital advisory as clients engaged the group to better manage their financial and retirement goals.
“All these engagements are happening digitally. Our biggest takeaway is, even if there is a challenge in the future, the digital advisory is here to stay.
“This is an area we are investing even more significantly as we move forward,” StanChart Malaysia MD and head of wealth management Sammeer Sharma (picture) said during a virtual press conference yesterday.
He said in the current local financial landscape, Malaysians’ preferred investment options for wealth creation are savings account, property investment and fixed deposits.
However, the current interest rate — now at a record low of 1.75% following the central bank’s recent cut — would not enable locals to grow their assets efficiently through such investments.
“Relying on traditional approaches of savings or property may not be something that is sustainable anymore in this kind of environment,” Sharma said.
“It was not advisable in the past but all the more now it has become a very concerning area to look at for Malaysian clients.”
On July 7, Bank Negara Malaysia slashed the benchmark Overnight Policy Rate (OPR) for the fourth time this year by 25 basis points to 1.75% due to concerns of pandemic-induced weak economic conditions.
While an OPR cut is supposed to result in lower interest rates, thus boosting disposal income and subsequently consumer spending and borrowing, it also results in reduced interest income from savings and fixed deposits.
Meanwhile, Standard Chartered plc head of fixed income, currencies and commodities investment strategy Manpreet Gill said low bond yields, a rebound in earnings expectations and a weak US dollar are driving the market rallies witnessed globally — including Malaysia — amid the pandemic.
Low bond yields are a push factor as global capital is expected to “look around the world” for higher returns.
“The weakening of the dollar or at least not getting stronger tends to create an environment where you see foreign investment flows to emerging markets or more broadly, Asian equity markets,” he added.