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You searched Library Catalogue - Author: Paul , Kevin
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Call Number (WOU)
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SP CEMBA 2014 37
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Author
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Lye, Choy Lin
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Title
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A comparative study between private and local unit trust management companies in Malaysia - survival of the fittest / Lye Choy Pin
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Abstract
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This research looks into the state of unit trust industry in Malaysia with key focus on private and local unit trust management companies (UTMCs). In recent years, the unit trust industry has gone through some of the most extensive and rapid changes in line with accelerating integration and globalization. Unlike in the past where the unit trust industry was rather protected, UTMCs are now required to compete efficiently for survival not just with each other but also with foreign players. Increased securitisations had led to more mergers and consolidations of players in the market compared to the scene 30 to 40 years ago.
Various external market pressures and forces and sweeping regulations are forcing UTMCs to fight and adapt in order to survive. Standing still is not an option. Like it or not, UTMCs must recognize such changes and build their strategies to reflect the continuous tide of change. In the near future, the challenges to the industry are unlikely to abate and UTMCs cannot remain complacent and rely on past practises to conduct business in the same manner. Successful formulas become stale and new solutions must be created to enhance survival in the unit trust industry.The survival of a UTMC therefore depends greatly on its assets under management (AUM), type of funds launched and managed, cost income ratio especially pay outs to distributors, human resource efficiency and returns to its shareholders. This research looks at how these elements impact the survival rate of UTMCs.To conclude, prospects for larger UTMCs especially those in the top 5 ranked by AUM size are bright as they have the volume and economies of scale to take on foreign players and counter threats. However, the situation for smaller UTMCs is rather pessimistic as ultimately the unit trust industry requirements are largely numbers driven. Examples of this include eligibility for ASEAN Collective Investment Scheme and Private Pension Fund Providers which are only opened for UTMCs of certain size. Likewise partners and investors alike prefer to deal with established names and top players owing to better network infrastructure than take their chances with smaller players. For Malaysia whose population is relatively small compared to mature markets like US, Hong Kong or Canada, there may not be sufficient demand from investors to keep the smaller UTMCs afloat. Hence a feasible solution may be mandatory consolidation to increase survival rate and take on larger regional players effectively in future.
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Notes
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Final project report submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration (CeMBA)
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Publisher/Year
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Penang : School of Business and Administration, Wawasan Open University, 2014
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Subject
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Wawasan Open University -- Dissertations
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Subject
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Mutual Funds -- Malaysia
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Subject
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Financial institutions -- Investments -- Malaysia
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Subject
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Investments -- Malaysia
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