Determinants of Malaysian Retail Investors' Participation in the Capital Market
DOI:
https://doi.org/10.32890/ijbf2026.21.2.6Keywords:
Capital market, financial planner, financial capability, literacy, planning, product informationAbstract
Despite the rapid development of Malaysia’s capital market and broader access to investment platforms, retail investor participation remains limited due to low financial literacy, reliance on informal information sources, and cautious savings behaviour. This study aims to investigate the determinants of Malaysian retail investors’ participation in the capital market by examining demographic and socio-economic factors, capital market literacy, financial capability, access to financial product information and planning services, and perceptions toward financial planners. It further analyses the combined effects of these variables to provide a comprehensive understanding of the drivers influencing market engagement. This study employed a purposive sampling approach, involving 1,500 Malaysians aged 18 to 64 from diverse socio-economic groups, and collected data via closed-ended questionnaires. Data were analysed using SPSS with inferential statistics to examine their influence on capital market participation. The study finds that capital market participation in Malaysia is significantly influenced by education, employment status, income level, ethnicity, age, income adequacy, and investment allocation ratio. Specifically, graduates, employed individuals, higher-income groups, individuals of Chinese ethnicity, younger respondents, those with adequate income, and those with higher investment allocation ratios demonstrate greater participation in the capital market. Capital market literacy and financial awareness positively affect capital market participation, while financial behaviour is not significant. Access to product information through colleague support participation while negative perceptions toward financial planners hinder participation. The findings emphasise that improving market information, financial planner training, and investor education especially for lower-income and middle-income households, can encourage participation and promote inclusive financial growth in Malaysia.
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