Showing posts with label bursa. Show all posts
Showing posts with label bursa. Show all posts

Thursday 25 May 2023

Malaysian Equity Market

 Equites

The fortunes of a country’s equity or stock market are closely aligned with its economic well-being, and Malaysia is no exception. Similar to its global peers, Bursa Malaysia been enduring much turbulence in the last few years. Buffeted by strong external and internal headwinds, the market capitalisation of the local bourse had moderated further to RM1.74 trillion as at end-2022 (end-2021: RM1.79 trillion).


Profile of Malaysian Equity Market

Bursa Malaysia has the distinction of being among the biggest bourses in ASEAN with well over 900 listed companies. Investors can choose from a variety of listed products, including equities, derivatives, exchange-traded funds (ETFs), real estate investment trusts (REITs), and exchange traded bonds and sukuk (ETBS). Notably, 789 (81.2%) of the 972 listed entities on the local bourse were Shariah-compliant securities as at end-December 2022. These accounted for RM1.139 trillion or 65.6% of Bursa Malaysia’s overall market capitalisation as at the same date. Despite the tumultuous global markets, a total of RM26.0 billion was raised from the Malaysian equity market in 2022. Of this amount, RM3.5 billion originated from the primary market, i.e., via 35 initial public offering (IPOs). The other RM22.6 billion stemmed from secondary fundraising. The sturdier performance in 2022 was driven by a 52% y-o-y surge in IPOs and a 58% spike in secondary issuances.


Three Types of Markets on Bursa Malaysia

Bursa Malaysia operates through three markets – the Main Market, the ACE Market and the LEAP Market. Each has a different set of listing criteria for aspiring candidates. The following represents some of the most salient points of the respective markets.  

The Main Market is the primary market for larger companies with strong operating and profit track records, with a minimum required market capitalisation of RM500 million upon listing, among other things.

The ACE Market is a sponsor-driven alternative market designed for smaller companies that exhibit strong growth potential. No minimum profit or operating track record is required for listing.

The LEAP Market is a fundraising platform for what are perceived as underserved SMEs, which do not need to demonstrate any operating or financial track record. This adviser-driven market is only available to sophisticated investors.

In 2022, the Main Market hosted the listing of five companies while the ACE Market welcomed 25 and the LEAP Market contributed another five – bringing the total to 35 IPOS for the year. Together, these newly listed entities raised RM3.49 billion.


Listing Process and Platforms

The listing process (from the time the candidate engages an adviser to the day of listing) usually takes four to nine months, depending on the structure and complexity of the listing scheme. Upon approval, the entity will be given six months to complete its IPO exercise.

Bursa Malaysia also offers an end-to-end Shariah-compliant investing platform, along with the world’s first end-to-end Shariah-compliant commodities-trading platform. In recognition of the importance of sustainable and responsible investment, Bursa Malaysia launched the FTSE4Good Index in 2014. This index permits investors to measure domestic companies’ performance based on ESG standards. In July 2021, the local bourse introduced the FTSE4Good Bursa Malaysia Shariah Index – the Shariah-compliant version of the former. This new index will assist fund managers to develop new investment products constituting a portfolio of Shariah-compliant equities, guided by sustainable investing principles.


Investor Profile

The Malaysian stock market benefits from a diverse pool of investors, underscored by sturdy support from local institutional and retail investors. Domestic institutions remained net sellers in 2022, to the tune of RM6.53 billion (2021: RM9.1 billion). Meanwhile, local retail investors infused RM2.31 billion of net funds into the equity market, which paled in comparison to the previous year’s RM12.2 billion. Interestingly, foreign investors pumped in RM4.40 billion net (2021: RM3.15 billion) after four consecutive years as net sellers. Against this backdrop, the participation rate of retail investors declined to an average of 25.7% in terms of transaction value, relative to 34.6% in 2021. Nonetheless, this is still higher than the five-year pre-pandemic average of 18.8%


Trading Procedures

To invest in shares in Malaysia, one must be over the age of 18, open a Central Depository System (CDS) account and a trading account at a stockbroking firm. There are specific steps to follow pursuant to this, as detailed on Bursa Malaysia’s website.


Regulatory System

The Securities Commission Malaysia (SC) is the ultimate regulator of the Malaysian capital markets, including the equity market. As the front-line regulator, Bursa Malaysia, is tasked with safeguarding a fair and orderly market for the trading of securities and derivatives. The SC supervises and monitors Bursa Malaysia on listing, trading, clearing, settlement, and depository operations – to ensure the latter effectively performs its regulatory duties and obligations. Brokers and regulated entities must comply with the various rules set by Bursa Malaysia.


https://www.capitalmarketsmalaysia.com/public-equities/

Monday 23 March 2020

More than 700 companies valued at below US$100 million on Bursa

Image result for More than 700 companies valued at below US$100 million on Bursa


Mon, 23 Mar 2020

KUALA LUMPUR: The double whammy of the Covid-19 outbreak and the oil price crash has dampened investor sentiments around the globe, especially on net export oil-producing economies like Malaysia.

The FBM KLCI has plunged nearly 18% year to date (YTD). Valuation wise, KLCI’s current price-to-earnings ratio (PER) stood at 14.56 times, representing a 15.1% discount to its 10-year average of 17.15 times.

Simply put, it is the market in which investors, with cash in pockets, could cherry-pick the good bargains.

Since investor sentiment is transient in nature — they come and go like dark clouds, as such we look into how many Malaysian-listed companies lie in the affordable range, to a business-centric and well thought out billionaire investor that has US$1 billion (RM4.43 billion) cash on hand.

According to Bloomberg data, there are about 868 companies which market capitalisation (cap) is at or below US$1 billion.



Big caps at discount on valuation

Image result for More than 700 companies valued at below US$100 million on Bursa

There are 31 big-cap companies, which market cap is in between the US$500 million to US$1 billion categories.

The stock exchange, Bursa Malaysia Bhd, is among the 31 listed entities.

Bursa Malaysia closed at RM4.70 last Friday after it rebounded 28 sen or 6.33%, giving it a market cap of RM3.79 billion, less than US$1 billion. The stock exchange is trading at PER at 20.45 times compared with its 10-year average of 23 times

LPI Capital Bhd, which sits on top of the list, came in at a total market cap of RM4.31 billion. The home-grown insurer last closed at RM10.82 as of last Friday — indicating its current PER valuation stood at 13.37 times, representing a 23% discount to its five-year average PER of 17.38.

With US$1 billion in hand, the billionaire investor can even afford to buy out utility companies, namely YTL Power International Bhd (RM4.1 billion), Malakoff Corp Bhd (RM3.32 billion) and Gas Malaysia Bhd (RM3.21 billion).

The three utility giants’ stock price fell in the range of 7% to 30% YTD, to close at 53.5 sen, 68 sen and RM2.50 last Friday.

Shares in Astro Malaysia Holdings Bhd saw its price dropped by more than half year-on-year (y-o-y) to 73 sen, valuing it with a total market capitalisation of RM3.81 billion. The stock is currently trading at a PER valuation of 5.98 times, according to Bloomberg. The media stock’s PER valuation is indeed at a 73% discount to its five-year average PER of 22.3 times.

It is worth noting that many of these companies are trading substantially lower than their net asset values. The list of companies includes Malaysia Building Society Bhd, FGV Holdings Bhd, Oriental Holdings Bhd, Affin Bank Bhd, Lotte Chemical Titan Holding Bhd, Alliance Bank Malaysia Bhd, DRB-Hicom Bhd and AirAsia Group Bhd.

A random check on all the stocks’ valuation, in comparison to end-October 2008 period (the heights of the global financial crisis), four out five of the stocks have suffered lower PER valuation during the 2008 selldown period.




Mid-large cap choices

Image result for More than 700 companies valued at below US$100 million on Bursa
There are 124 companies that are valued between US$100 million and US$500 million.

A billionaire investor, who has US$1 billion in hand, could afford a buyout of some oil and gas giants, Bumi Armada Bhd, Velesto Energy Bhd and Sapura Energy Bhd, which have been succumbed to irrational selldown after the meltdown on the crude oil prices.

Remarkably, shares in Supermax Corp Bhd was the only one yielded positive among the top-31 companies within the category. Supermax which gained 7% YTD, closed at RM1.49 last Friday — valuing the rubber glove maker at RM1.96 billion. Valuation of Supermax which was widely viewed as one of the beneficiaries for the pandemic containment efforts stood at 18.85 times PER, 33% higher than its 10-year average of 14.18 times.

Companies that sit above the RM2 billion mark within this category include Aeon Credit Service (M) Bhd, Shangri-La Hotels (Malaysia) Bhd, Allianz Malaysia Bhd and UMW Holdings Bhd — which saw their share price slid between 13% to 68% y-o-y.

In particular, Aeon Credit is trading at a single PER of 7.86 times based on last Friday’s closing of RM8.58. The valuation is at a 17% discount to its five-year average of 9.47 times.

While Shangri-La Hotels’ stock price was holding up strong at RM4.85 despite the concern on the Covid-19 outbreak that will affect occupancy rate. The five-star hotel group is trading at PER of 33.7 times, which is a 12% premium to its five-year average of 29.92 times.

Meanwhile, Allianz Malaysia, which used to trade above six times average PER in the past five years, is currently trading at a 32% discount at 4.31 times PER at RM12.02. Interestingly, Allianz’s net tangible assets (NTA) currently worth about RM11.89 per share — indicating that the investor gets to own 98% of the tangible assets for every ringgit invested into the insurance company.

Some of the notable consumer-related companies within US$100 million-US$500 million market cap range, includes Guan Chong Bhd (RM1.78 billion), Leong Hup International Bhd at RM1.68 billion, 7-Eleven Malaysia Holdings Bhd (RM1.49 billion), Aeon Co (M) Bhd (RM1.40 billion) and Padini Holdings Bhd (RM1.35 billion), which saw their share price tumbled 9% to 47% YTD. This group of companies, except for Leong Hup which was newly listed last year, were trading below their five-year average PERs.

Among the semiconductor companies that are within US$100 million and US$500 million range, Malaysian Pacific Industries Bhd (RM1.81 billion) was the only one traded at a premium to its historical values, which stood at 13.44 times PER, representing a 7% premium relative to its five-year average of 12.48 times.

Meanwhile, Frontken Corp Bhd, VS Industry Bhd and Pentamaster Corp Bhd are all traded at a discount to their historical values. Their share prices had plummeted 20% to 45% YTD.



Cheaper companies but cheaper quality

Image result for More than 700 companies valued at below US$100 million on Bursa

With US$1 billion in hand, billionaire investors will be spoilt for choice at bargain prices for stocks with a market cap of US$100 million or less.

There are 713 companies valued at below US$100 million, based on last Friday’s closings, according to Bloomberg.

Out of the top 31 market cap companies within this category, there are five loss-making companies.

Interestingly, companies in which NTA is significantly higher than their respective share prices include MNRB Holdings Bhd, MPHB Capital Bhd, Sunsuria Bhd, Muhibbah Engineering (M) Bhd, Malayan Flour Mills Bhd, Can-One Bhd. Share prices in these companies have tumbled 25% to 66% YTD.

MNRB’s NTA at RM2.97 per share is about close to five times higher than Friday’s closing price of 52 sen. While Can-One’s NTA stood at RM9.01 per share, close to four times higher than its share price of RM1.93, and MPHB’s NTA of RM1.88 per share is more than two times higher than its last trading price of 56.5 sen.

In terms of price valuation, all of the companies were traded below their five-year average PER, except for Amverton Bhd and Ayer Holdings Bhd which are both involved in property development.

Amverton, which has a valuation of RM438 million, saw its share price closed at RM1.20 — implies current PER of 85 times, three times higher than its five-year average of 28 times.

Ayer Holdings current PER stood at 29 times, representing 22% higher than its five-year average of 23 times, as of last closing price of RM5.20, valuing the company at RM389 million total market capitalisation.



https://www.theedgemarkets.com/article/more-700-companies-valued-below-us100-million-bursa
















Thursday 19 July 2018

Bursa Malaysia activities in 2017


  • FBM KLCI saw growth of 9.4 per cent.
  • Market capitalisation grew by 14.4 per cent year-on-year (y-o-y) to RM1.9 trillion.
  • Significant increase in retail participation, which grew by 41 per cent y-o-y.
  • RM10.8 billion net foreign inflow in 2017.
  • Bursa Malaysia attracted 13 new listings, raising a total of RM7.4 billion.
  • Average daily trading value (ADV) for securities market on-market trades grew by 27.7 per cent to RM2.3 billion.
  • The average daily contracts traded in the derivatives market in FY2017 were 57,677 contracts.
  • A total of 14.0 million contracts was traded in FY2017.
  • Islamic capital market, trading revenue in FY2017 fell by 3.7 per cent to RM15.8 million despite an improvement in ADV by 20.2 per cent to RM19.6 billion.





Bursa Malaysia records higher earnings in FY17
February 6, 2018, Tuesday



KUALA LUMPUR: Bursa Malaysia Bhd’s pre-tax profit for financial year ended Dec 31, 2017 (FY17) rose to RM305.88 million from RM270.59 million a year earlier.

Revenue surged to RM556.83 million from RM506.78 million previously.

In a statement yesterday, Bursa Malaysia chief executive officer, Datuk Seri Tajuddin Atan, said 2017 was one of the strongest years for the local equity market.

The FBM KLCI saw growth of 9.4 per cent and market capitalisation grew by 14.4 per cent year-on-year (y-o-y) to RM1.9 trillion, he said.

“There was a significant increase in retail participation, which grew by 41 per cent y-o-y. This was in line with our continued focus to engage and educate by building our retail outreach efforts and financial literacy programmes, further expanding our retail base throughout the year,” he said.

Bursa Malaysia saw a RM10.8 billion net foreign inflow in 2017.

In FY2017, Bursa Malaysia attracted 13 new listings, raising a total of RM7.4 billion compared to RM0.6 billion in 2016.

“We will expand our marketing efforts to build a strong IPO pipeline and look forward to rolling out our initiatives aimed at widening our products and services to create a conducive capital market ecosystem for all market participants,” said Tajuddin.

For the year under review, securities market trading revenue increased by 21.9 per cent to RM259.6 million from higher average daily trading value (ADV) for securities market on-market trades, which grew by 27.7 per cent to RM2.3 billion.

The average daily contracts traded in the derivatives market in FY2017 were 57,677 contracts and a total of 14.0 million contracts was traded in FY2017 compared to 14.2 million contracts in FY2016.

In the Islamic capital market, trading revenue for Bursa Suq Al-Sila’ in FY2017 fell by 3.7 per cent to RM15.8 million despite an improvement in ADV by 20.2 per cent to RM19.6 billion, mainly due to the introduction of volume-based pricing scheme.

“We will continue to work closely with our intermediaries to improve liquidity and increase trading activities,” said Tajuddin.

Bursa Malaysia’s board of directors has approved a second interim dividend of 18.5 sen per share for FY2017, amounting to approximately RM99.4 million, which is payable on March 5, 2018.

With that, the total dividend, including special dividend declared for the year amounted to 53.5 sen per share. — Bernama

Saturday 26 August 2017

PNB Investments in Bursa Malaysia (10.3% of the market cap of Bursa Malaysia.)

























Market cap of Bursa Malaysia is RM 1,814.59 billion.

PNB owns 10.3% or RM 186.2 billion of Bursa Malaysia.


http://www.thestar.com.my/business/business-news/2017/08/26/wahid-gets-moving-to-boost-returns-for-pnb/




Putting the Bursa Malaysia in Perspective

The market cap of Berkshire Hathaway is 1.55x  that of the market cap of Bursa Malaysia.

Berkshire Hathaway is listed in NYSE

1 U.S. = RM 4.26

Its equity is US 286.4 billion or RM 1,220.1 billion.

Its market cap based on its share price of US 267,377 per share on 19.8.2017 is US 659.4 billion or RM 2,809.0 billion.

Thursday 1 December 2016

KYY Investing Guide lines - Koon Yew Yin

KYY Investing Guide lines - Koon Yew Yin

Author: Koon Yew Yin   
Since my retirement as a founder director of IJM Corporation Bhd about 30 years ago, I have been investing in our local and Hong Kong stock markets. I also have read books to learn the methods practiced by legionary experts such as Peter Lynch, Benjamin Graham and many others.   
At the beginning I made some mistakes and I learned from my own mistakes to improve my skill.
Now I am able to write down some simply guide lines to help investors make more money. You do not need a higher tertiary education to make money.
1 KYY golden rule for stock selection:  Before you buy any share, you must make sure that the company can make more profit in the current year than last year by looking at its profit for the last 2 quarters and the projected P/E ratio is less than 10. If it has very good profit growth prospect, you may buy it at higher P/E ratio. 
2 Up and down trend charts:  You don’t have to be an expert in chart. All you need to know is what is up trend and down trend. Never buy down trending stocks even if they are selling below NTA because you don’t know when the price will go higher than your purchase price for you to sell to make money. For example some of the property companies are selling below their NTA. As you know there is an oversupply of properties in every town and city in Malaysia. If you buy property shares, you have to wait a few years before the property market turns around.    
3 Buy up trending stocks provided they have good profit growth prospect and selling at low P/E ratio. The advantage is that after your purchase, you can see the price continues to go up. But you must remember that no share can continue to go up for whatever reason. You must sell to take profit.
4 Cut loss will limit your losses: After you have bought a share and the price did not go up as you expected, you must cut loss when the price drops more than 10% of your purchase price.
5 Control your emotion of fear, greed, ego and over confidence to think logically is the key for successful investing. Most people cannot control their emotion to think logically. If everyone can think logically, all the shares would be fully valued and there would not be any underpriced share for sale. That is not the case. If you can control your emotion you would know when to buy and when to sell to make money.
6 You must develop some business sense. Quite often you can see share prices of really good companies remain flat or keep dropping for no reasons. If have some business sense, you dare to buy.  But if you do not understand business, you would miss the chance to make money. 
7 To maximize profit, you must have patience. Every day you can see how share prices fluctuate. The day’s high and low can be quite a wide difference. If you have patience, you can buy at the lowest price or sell at the highest price of the day.
8 You must own a maximum of 8 stocks so that you can keep track of the companies’ progress. All businesses have different challenges and obstacles at different time to overcome. If you can keep track of them, you know when to buy or sell to make more profit.   
9 You should use margin loan to increase your profit provided you really know all the above guide lines. The current interest rate is 4.8% pa. You can easily make more than the interest rate to increase your profit.
10 Share investing is not an easy venture. If you cannot afford to lose, don’t try. There are more losers than winners in the stock market. If you have not been successful after a few years, you must stop. Otherwise you and your family will suffer.


http://klse.i3investor.com/blogs/koonyewyinblog/110433.jsp




Wednesday 23 March 2016

Malaysian capital market continues to expand in 2015 despite headwinds — SC

March 11, 2016, Friday

Ranjit said RM86 billion was raised through the issuance of private debt securities (PDS) and RM4 billion via initial public offerings.
Ranjit said RM86 billion was raised through the issuance of private debt securities (PDS) and RM4 billion via initial public offerings.
KUALA LUMPUR: Notwithstanding various headwinds, the Malaysian capital market continued to expand in 2015 to reach RM2.82 trillion in size compared with RM2.76 trillion in 2014, the Securities Commission said.
Growth was driven by the equity market which grew from RM1,651 billion in 2014 to RM1,695 billion by end-2015 while the bond market improved to RM1,125 billion against RM1,110 billion registered in the previous year, said Chairman Datuk Seri Ranjit Ajit Singh in the SC Annual Report 2015.
“Such expansion attests to the sustained ability of issuers to obtain long-term financing from the Malaysian capital market, as fundraising activity remained robust throughout the year,” he said.
Ranjit said RM86 billion was raised through the issuance of private debt securities (PDS) and RM4 billion via initial public offerings (IPOs), bringing the total funds raised through the primary market to RM90 billion in 2015 compared with RM92 billion in 2014.
Meanwhile, a sustained expansion in buy-side liquidity over the year also contributed towards the relative resilience of the capital market, with assets under management (AUM) by fund management companies rising by six per cent to RM668 billion in 2015 from RM630 billion in 2014.
Unit trust funds continued to be the largest source of clients’ AUM with net asset value of RM347 billion by end-2015 compared with RM343 billion in 2014.
The unit trust industry, which is an important proxy for retail investor confidence in the capital market, also recorded surplus sales over redemptions, with the number of units in circulation growing from 425 billion in 2014 to 458 billion in 2015.
While the capital market recorded net portfolio outflows in 2015 in line with global emerging market trends, the value of foreign ownership in the corporate bond market increased slightly from RM13.9 billion in 2014 to RM14.0 billion by end-2015.
Liquidation of foreign portfolio positions in the equity market also took place at a measured pace, with the FBMKLCI recording a decline of -3.9 per cent compared with the MSCI Emerging Markets index which fell -17 per cent over the same period, said the report.
In 2015, Ranjit said the SC continued to diversify channels for financing and investments while broadening access to the capital market by pursuing measures to deepen existing market segments and nurturing new growth areas.
One such area of focus was the Islamic capital market, where Malaysia had firmly established its reputation as a global leader in Islamic finance and the world’s largest issuer of sukuk.
He said extensive work was underway in formulating a roadmap which articulated the SC’s strategy to establish Malaysia as a global Islamic fund and wealth management hub, the release of which was slated for 2016.
Another key market developmental thrust is SC’s ongoing efforts to facilitate access to market-based financing for early and growth-stage companies.
“One of our first initiatives in this regard is the establishment of a regulatory safe harbour for equity crowdfunding (ECF), a class of fundraising activity which enables entrepreneurs to obtain market-based financing for start-ups and early-stage companies,” Ranjit said.
In February 2015, SC became the first regulator in the region to introduce a framework for ECF, with six applicants subsequently approved to become registered ECF platform operators in Malaysia.
Also, as a long-standing champion of initiatives to strengthen the quality of corporate governance in Malaysia, the SC recently concluded the implementation period of the Corporate Governance Blueprint 2011 with 83 per cent of its recommendations already fully implemented.
Moving forward, near-term deliverables included revisions to the Malaysian Code on Corporate Governance 2012, as well as, the release of the Corporate Governance Priorities 2020 which will detail SC’s initiatives for the next five years, he added. — Bernama


Read more: http://www.theborneopost.com/2016/03/11/malaysian-capital-market-continues-to-expand-in-2015-despite-headwinds-sc/#ixzz43iC2FzXt

Friday 4 January 2013

Malaysia's main market index ends year at all time high; advances 10.34% in 2012.


Tuesday January 1, 2013

Malaysia's main market index ends year at all time high

By TEE LIN SAY
linsay@thestar.com.my


Local bourse advances 10.34% in 2012
PETALING JAYA: The FBM KLCI finished 2012 with a 10.34% gain to close at an all-time high of 1,688.95 as election concerns, defensive trading and high cash holding continued to dominate the equity scene in Malaysia. For the day, the local bourse was up 7.62 points on volume of RM1.31bil shares.
The KLCI's gains were mostly done in the last 15 minutes of trading on selected key blue chip stocks.
Kuala Lumpur Kepong Bhd was the biggest gainer of the day, closing RM2.06 to RM24, pushing up the KLCI by 3.39 points while Malayan Banking Bhd rose 12 sen to RM9.02 and nudged the index by 2.25 points. AEON Co (M) Bhd was on the gainers list, up RM1.42 to close at RM14.12.
Nonetheless, the KLCI is still one of the underperformers when compared with its regional peers. It is only ahead of the Shanghai Composite Index, Taiwan and South Korea, which recorded year to date gains of 3.17%, 8.87% and 9.38%, respectively.
Not surprisingly, it was the smaller Ace market counters that hogged the gainers list for the year.
These included Microlink Solutions Bhd with a 308% gain to 51 sen andBorneo Aqua Harvest Bhd with a 118.18% gain to 72 sen.
Among the bigger stocks that did well included KLCC Property Holdings Bhd which gained 99.37% to RM6.28 on plans to form a stapled real estate investment trust (REIT).
KLCC Property's restructuring exercise will involve the company acquiring the remaining 49.5% stake in Midciti Resources Sdn Bhdwhich owns the Petronas Twin Towers from KLCC Holdings Bhd for RM2.86bil. Following that, KLCC Property will inject three properties into KLCC REIT.
The properties are the Twin Towers, Menara ExxonMobile and Menara 3 Petronas. Thus once the restructuring is completed, KLCC Property shareholders will own shares and units in both KLCC Property and KLCC REIT.
The best performing stock on the Main Market for the year was Bright Packaging Industry Bhd, which was up 230.58% on a year to date basis.
It closed at RM2, which is also its 10-year high, on news that the company may see a change in its board and management.
Bright manufactures aluminium foil packaging materials which are mainly supplied to the tobacco industry. Last week, the company told Bursa Malaysia that four substantial shareholders with a collective stake of 31.2% had requested an EGM to remove existing directors and appoint new ones.
Over in the Ace market, the best performing stock and overall best performing stock for whole of Bursa Malaysia for 2012 was Green Ocean Corp Bhd.

Friday 26 October 2012

DEVELOPMENT OF MALAYSIAN STOCK MARKET: AN OVERVIEW

Toy Jun Zheng; August 2007

After decades of worldwide recognition as a joint stock market with Singapore, the Malaysian stock market finally detangled itself as a separate market in 1973 and eventually renamed itself from the initial Kuala Lumpur Stock Exchange to the recently-known Bursa Malaysia in 2004. The journey was tough, with the domestic stock market experiencing four crashes, which were the 1973, 1981, 1987 and the devastating 1997. Each survival from the previous crash made the stock market stronger and more matured, and finally led to the establishment of the Securities Commission (SC) in 1993, a statutory body empowered to supervising all the public companies in Malaysia. This had exhibited the commitment of the Malaysian Government in stabilizing and promoting a healthier domestic financial system. Our domestic stock market capitalization reached and stood at a handsome $300 billion at the month of April 2007. But what’s next ahead of our 50 years of independence? 

From an economic viewpoint, the Malaysian economy could be seen as a “finance-led” growth economy, with the growth of the finance sector especially the stock market, assisting or even creating the momentum of the economic growth. The stock market is seen to be acting the role of allocating resources in efficient manners which would then spur growth (Chong, Zulkornain Yusop, Law & Sen 2003). Funds,especially from foreign investors through the domestic stock market play significant roles in financing the domestic enterprises which in the end would increase the domestic output. As so, the development of the domestic stock market should not be neglected when we are considering of stimulating the domestic economic growth but should be seen as a whole. Some more, the endogenous growth model which emphasizes the importance of the role of stock market development along the path of real development prompts us to pay much more efforts than we have to develop the domestic stock market when speaking of pushing the economic growth (Bose 2005). But, unfortunately, the next 10 or 50 years to come would post great challenges in our efforts to do so. This is due to the emergence of plenty of new and attractive markets in the world that would shed our domestic market’s attractiveness globally. All these, in my opinion, should bring to our great concern and should constitute the main themes for developing the stock market in the future. But, where should we start? 



An examination into the current weaknesses and issues of our domestic stock market and solving them would help in the first place, before we should even think of promoting our stock market internationally. Attractiveness should be from the inside and not from mere seen beauty. As so, we should first examine the two important issues of our domestic stock market, which are laid out below.

The Malaysian stock market is always seen as the one with poor institutional structures. Concentrated ownerships, loose judiciary system and etc are some of the main culprits. Poor institutional structures such as the examples mentioned would to some extend deprive a person’s freedom to own and increase wealth and would then discourage people to invest. Why would a person invest in businesses when the judiciary power to enforce contracts is not stringent? Why would foreign investors invest when they can’t perform their shareholders’ rights to the degree of what they should have regarding to the operations of businesses, due to concentrated ownerships? As a result, these poor institutional structures would cause the stock market to be less developed and would eventually retard the domestic economic growth (Castaneda 2006).

The second problem applies to all stock markets through out the world and not just to our domestic stock market: the disequilibrium between the growth of the financial market and the economic growth. In essence, it means that the growth of the financial market (in terms of the amount of funds brought in) do not synchronize with the ability of the domestic economy to absorb. Overgrowth occurs and fueled future crashes. A high investment to GDP ratio would not necessarily be a good sign if the funds could not be allocated efficiently (Liu & Hsu 2006). Adverse selection and moral hazards take place and consume the financial sensibility. This is identical to what had happened to our domestic stock market in 1997. Thus, great efforts should be put into synchronizing the growth of the stock market and the economic growth, which would be extremely difficult, if not impossible.

What steps that we can take to solve the problems or at least, improve our domestic stock market to a better stage? First, we can have further deregulations of the financial system. Self regulation is always a better way to develop the financial system rather than the central regulative actions. But, all these improved-openness should be within the boundaries of a more stringent judiciary system that protects investors. We could also practice capital controls on foreign direct investments, such as the one done in the past. The control of these foreign inflows of funds would prove to be useful when we try to minimize the gap of the disequilibrium between the stock market growth and the economic growth. Though, the trade-off of a higher economic growth rate without controls should be taken into considerations as well.

What we have done in developing the domestic stock market or the financial system as a whole in the past has been great. What to come after our 50 years of independence? Only time has the answer. 

Tuesday 24 August 2010

Bursa surpasses psychological 1,400-point level


Tuesday August 24, 2010

Bursa surpasses psychological 1,400-point level

PETALING JAYA: The local bourse surpassed the key 1,400-point level to close 0.58% higher at 1,403.15 on selective buying of blue-chip stocks in the latter part of the trading day by funds as better-than-expected corporate results at home outweigh the lack of fresh leads from abroad.

Analysts were convinced that the benchmark index would face resistance at that level after a spate of macro news which heralded a gloomier second half.

CIMB Group Holdings Bhd became the largest bank after its market capitalisation exceeded that of Malayan Banking Bhd’s (Maybank) yesterday.

CIMB’s market capitalisation stood at RM58.06bil compared to Maybank’s RM57.61bil. CIMB’s share price rose 22 sen to RM7.92 while Maybank’s added 1 sen to RM8.14.

Among other actively traded counters, Genting was up 11 sen to RM8.72, PPB added 40 sen to RM17.36 and TM was three sen higher at RM3.58.

However, investors remained cautious as reflected in the broader market, with 465 counters down compared to 291 gainers while 270 counters were traded unchanged.

Volume was relatively low at 805.11 million shares traded with a total value of RM1.33bil.

The local bourse bucked the trend in the region, where Tokyo’s Nikkei 225 lost two-thirds of a per cent to 9,116.69, Hong Kong’s Hang Seng Index fell 0.44% to 20,889.01 and Singapore’s Straits Times Index was 0.36% lower at 2,925.99.

Meanwhile, the Aussie dollar faced selling pressure after a federal election over the weekend failed to deliver a majority to either incumbent prime minister Julia Gillard nor opposition leader Tony Abbott.

Sydney’s S&P/ASX 200 Index was little change, shedding 0.4%.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/6907184&sec=business

Monday 16 August 2010

Tan Teng Boo of iCap said there are a lot of undervalued stocks on Bursa Malaysia.

iCapital.biz sees 7pc GDP growth

By Azlan Abu BakarPublished: 2010/08/16


MALAYSIA could record a positive gross domestic growth (GDP) for 2010 although almost all major economies including the US and China have suffered a growth slowdown since a couple of weeks ago.

Icapital.biz Bhd (5108) managing director Tan Teng Boo said the global market outlook for the next six months will continue to be uncertain.

Key data released in the US showed hints of possible economic softness, which could trigger another round of cautious sentiment among investors.

"However, despite the current situation Malaysia could still record up to 7 per cent GDP growth this year given the strong growth it achieved in the first and second quarter of the year," he told reporters when met at the company's Investors Day in Kuala Lumpur over the weekend.
The event was held to educate investors on investments. It also held talks, exhibition booths and presentations from companies which icapital.biz had invested in.

Tan said although the equity market has somewhat lagged behind a bit compared to others in the region, foreign investors are nevertheless excited with the New Economic Model (NEM) introduced by the government.

"They (foreign investors) are waiting to see how fast and how broad the reforms will be able to take place," he said.

He said if the NEM can be implemented fast, it could also transform and take Malaysia's economy into a new level.

"When that happens, we can expect to see a boom on the local stock market," Tan said, noting there a lot of undervalued stocks on Bursa Malaysia.

He said the Malaysian economy has the potential to surpass the performance of other markets including Singapore and Taiwan.

"We can succeed as we have the people, necessary support and skills to further build up the economy and attract direct foreign investments into the country," Tan said.

He said Malaysia's growth at present will continue to be driven by the resilient domestic market.

Icapital.biz, the country's only listed closed-end fund, recorded a net profit of RM36.4 million on the back of a RM42.2 million revenue for the financial year ended May 31 2010 compared with a revenue of only RM11.4 million a year before. Net profit in 2009 stood at RM6.2 million.

Its net asset value for the financial year recently ended rose 19 per cent to RM2.10 per share from RM1.77 previously.

"We hope to double our assets in the next five years," Tan said, noting the company posted growth of more than 130 per cent since it was listed in 2005.



Read more: iCapital.biz sees 7pc GDP growth http://www.btimes.com.my/Current_News/BTIMES/articles/ibix15/Article/#ixzz0wiSOWKeN

Thursday 20 May 2010

RM26.3b market cap lost over 4 days

RM26.3b market cap lost over 4 days


Written by Surin Murugiah
Thursday, 20 May 2010 00:02


KUALA LUMPUR: A combination of weakness on Wall Street, the European debt crisis, worries of tighter financial regulation and negative news flow from one of the larger companies on Bursa Malaysia Securities drove the FBM KLCI to its steepest decline on May 19 since March 30, 2009.

The lingering uncertainty over the global economic well-being also resulted in the FBM KLCI losing 38.69 points over the last four trading days, and wiping off RM26.27 billion in overall market capitalisation on Bursa Securities.

On May 19, Asian markets fell while European indices, worried by the effectiveness of the measures adopted in Europe to arrest the debt crisis as well as Germany’s decision to ban naked short-selling on selected stocks, mostly opened lower.

At the close on May 19, Singapore’s Straits Times Index fell 2.45% to 2,774.54, Hong Kong’s Hang Seng Index lost 1.83% to 19,578.98, Japan’s Nikkei 225 fell 0.54% to 10,186.84, the South Korean Kospi fell 0.8% to 1,630.08, Taiwan’s Taiex Index fell 0.34% to 7,559.16, and the Shanghai Composite Index shed 0.27% to 2,587.81.

On the local front, the FBM KLCI declined for the fourth consecutive trading day and fell 1.65% or 21.94 points to 1,308.23, the biggest single day drop since March 30 last year when it fell 1.82%.

Trading volume was 781.53 million shares valued at RM1.4 billion. Losers thumped gainers by 689 to 135, while 175 counters traded unchanged.

Crude palm oil futures for the third month delivery fell RM10 per tonne to RM2,435 while crude oil fell US$1.14 (RM3.71) per barrel to US$68.27 as at 6.30pm.

The top eight laggards on the 30-stock FBM KLCI accounted for 16.52 points of the index’s decline, while PPB GROUP BHD [], whose 18.4% associate company Wilmar International’s Indonesian subsidiaries had been reported to be under probe for alleged unlawful value-added tax-restitution claims, saw RM1.21 billion erased from its market capitalisation.

PPB fell 5.79% or RM1.02 to RM16.60, the sharpest decline since Oct 24, 2008 when it fell 6.71%. Its market capitalisation fell to RM19.68 billion from RM20.89 billion.

Among the losers, IOI CORPORATION BHD [] fell 26 sen to RM5; CIMB Group Holdings Bhd 17 sen to RM7.04, PUBLIC BANK BHD [] 16 sen to RM11.78, AMMB HOLDINGS BHD [] 14 sen to RM4.86, GENTING BHD [] 12 sen to RM6.77, MALAYAN BANKING BHD [] nine sen to RM7.49, while SIME DARBY BHD [] lost eight sen to RM8.18.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said fundamentals were not really that good, adding that stripping out inventory re-stocking (IRS), 8% out of Malaysia’s 1Q10 10.1% gross domestic product year-on-year growth was due to the IRS.

He pointed out the negative news flow, including Sime Darby’s cost overruns, the reports on Wilmar, as well as Wah Seong Corp’s Socotherm bid setback had affected market sentiment.

“Markets in the world are falling like nine-pins. Asia is down about 2.5% today. The FBM KLCI broke the 1,315 support level; this means we will see 1,300 very soon, maybe by May 20,’ he said, adding that markets might be turbulent for the next few months.

Lee said risks were high and rewards meagre, and advocated that investors sell most stocks and step aside, adding it was better to have more cash.

Inter-Pacific Research Sdn Bhd head Anthony Dass said the eurozone debt crisis would not leave Asia unscathed, and thus could force financial institutions to be more cautious in their lending, raise financial volatility in the financial market and hurt export demand.

“We fear the low interest–free environment in euro will feed into Asia, compounding liquidity issues that will flare asset prices. For countries like Malaysia, the widening fiscal gap may alleviate short-term pressure,” he said.

MIDF Research head Zulkifi Hamzah said it was difficult to quantify the extent to which local factors accounted for the lacklustre market condition now.

“The BN’s loss of its Sibu parliamentary seat may be unexpected, but political risk for Malaysia had been elevated since the last general election and swings in by-elections should no longer be surprising,” he said.

“Several instances of corporate misadventure such as Sime’s substantial provision and the latest being Wilmar’s predicament in Indonesia which affected PPB’s share price also contributed to the drag on the market.

“Otherwise, earnings for the quarter ended March are decent, with some significant surprises, especially that of Maybank,” he said.

However, he said putting things into perspective, the decline in FBM KLCI was nowhere near as severe as it had been made out to be.

“From the year’s high of 1,346.92, the FBM KLCI has given back less than 3%. If it is a correction, then it can be considered a healthy one and is an opportunity to accumulate.

“The fact remains that the strength of the ringgit reflects the fundamentals of the economy and the weak spots in the world today are in the West, and not Asia,” he said.

http://www.theedgemalaysia.com/business-news/166427-rm263b-market-cap-lost-over-4-days.html

Monday 15 March 2010

Understanding The Stock Market


Understanding The Stock Market


The stock market is where the shares in companies are bought and sold, providing

  • companies options to access capital, and 
  • investors opportunities to own a share of the company and enjoy potential gains from the company’s future performance.



The stock market offers people the ability to generate a separate income stream apart from their daily jobs, or income streams which are superior to those from traditional savings deposits. But before you even think about buying and selling shares, you must know the fundamentals of the stock market and of trading.

First time investors can become confused because of the terminology that is used to describe various market functions. These don’t take long to learn. Click here for your basic share trading terms. Incidentally, one common confusion is over the terms ‘ stocks’ and ‘shares’. Actually, they both mean the same thing and can be used interchangeably.

The Role of Bursa Malaysia


You can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. The Malaysian stock exchange is called Bursa Malaysia. Bursa Malaysia has over 1,000 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market.


Raising Capital on the Stock Market


The Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they mean listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market. Purchasing stocks in a company that is listed on the stock market is done through an Initial Public Offering or IPO.

Once an IPO has been issued, you can contact the company (phone, fax or email) for a copy of the Prospectus and complete the application to apply for an allocation of shares. Or you can wait until the company is floated and buy shares on the open market. Besides Bursa Malaysia, stock brokers will also have information regarding Initial Public Offerings.

Companies that are already listed can also raise additional money on the stock market by offering existing stockholders the opportunity to buy more stocks in the company. For example, a listed company wanting to raise additional capital might issue one new share at 5sen each for every three shares an existing investor owns.

When you buy shares, you are buying a share in that company and so you own a percentage of that company. When the company makes a profit, you share in that profit in the form of a dividend. Typically, the number of shares that have been issued multiplied by the share price gives us how much a company is worth.


http://edividend.bursamalaysia.com/website/bm/bursa_basics/investing_basics/understanding.html

Thursday 15 October 2009

FBMKLCI rises to new high

FBMKLCI rises to new high
Published: 2009/10/14

THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) jumped to the year's new high as investors snapped up banking-related stocks today.

The benchmark index closed 13.33 points higher at 1,246.84 after hitting an intraday high of 1,248.14.

Dealers said the Malaysian Institute of Economic Research's forecast that the country's economy would shrink at a slower pace of 3.3 per cent this year, an improvement from 4.2 per cent projected earlier, provided some support.

Rising buying interest in penny and small cap stocks with the return of risk appetite was also evident, they said.

"Follow-through buying by foreign funds in key banking-related stocks such as Maybank and CIMB Group helped the FBM KLCI extend its gain," a dealer said.

At the close, the FBM Emas Index gained 97.57 points to 8,393.58, the FBM Top 100 increased 91.98 points to 8,171.25, the FBM 70 jumped 111.23 points to 8,257.70 and the FBM ACE Index advanced 48.30 points to 4,269.02.

The Finance Index surged 171.58 points to 10,528.24, the Plantation Index gained 43.75 points to 6,031.33 and the Industrial Index added 13.85 points to 2,667.12.

Gainers outnumbered losers by 574 to 174 while 208 counters unchanged and 338 others untraded.

Turnover increased to 1.261 billion shares valued at RM1.655 billion from 939.925 million shares worth RM1.005 billion yesterday.

Among active counters, KNM Group rose four sen to 84.5 sen, SAAG Consolidated added three sen to 23.5 sen and Silk Holdings advanced 5.5 sen to 50 sen.

Time Engineering inched up 1.5 sen to 38 sen, Hubline Bhd-OR added one sen to 11 sen and Green Packet-Warrants gained 5.5 sen to 42.5 sen.

Conglomerate Sime Darby rose seven sen to RM8.69 while finance heavyweight Maybank gained 22 sen to RM6.96.

CIMB Group advanced 16 sen to RM12.32, Tenaga Nasional rose two sen to RM8.25, IOI Corp edged up six sen to RM5.33 and Genting gained seven sen RM7.39.

The Main Market turnover jumped to 1.173 billion shares worth RM1.633 billion from 820.767 million shares worth RM982.236 million yesterday.

The ACE Market volume, however, decreased to 49.662 million shares valued at RM11.937 million from 100.747 million shares valued at RM18.028 million while warrants increased to 28.860 million units worth RM7.071 million from 14.911 million unit worth RM3.664 million.

Consumer products accounted for 51.489 million shares traded on the Main Market, industrial products 284.396 million, construction 59.883 million, trade and services 368.269 million, technology 100.543 million, infrastructure 63.492 million, finance 76.327 million, hotels 4.486 million, properties 145.674 million, plantations 15.498 million, mining 92,200, REITs 2.852 million and closed/fund 133,000.

Bernama

Tuesday 21 July 2009

Bursa Malaysia Aims for 40 Listings a Year, CEO Yusli Says

Bursa Malaysia Aims for 40 Listings a Year, CEO Yusli Says


By Chan Tien Hin

July 21 (Bloomberg) -- Bursa Malaysia Bhd., operator of the nation’s exchange, said it aims to attract as many as 40 new listings a year as the easing of investment rules in the country helps draw foreign investors.

Bursa attracted 23 listings last year and 26 in 2007, down from 40 three years ago, according to its Web site. Only one sold shares for the first time in the first half, it added.

“Over the next six months, if we get the same number as last year, that will be good,” Yusli Yusoff, Bursa’s chief executive officer, said in an interview in Kuala Lumpur. “I don’t see why we can’t continue the momentum, I’ve always said that in any year, we should be looking at 30 to 40 companies.”

Malaysian Prime Minister Najib Razak last month eased investment rules governing initial public offerings and takeovers, scrapping the need for overseas companies and publicly traded Malaysian businesses to set aside 30 percent of their equity to local ethnic Malay investors.

Najib, who took office in April, is overhauling the Southeast Asian nation’s financial markets to attract investors and revive an economy that’s facing its first contraction in a decade. The benchmark FTSE Bursa Malaysia KLCI has risen 30 percent this year, lagging behind regional markets.

The measure’s gap with Southeast Asian indexes may widen. Macquarie Group Ltd. said in a report today that investors should “take profit” in Malaysian stocks as “liquidity and earnings upgrades are showing signs of fatigue.”
‘Big Ones’

Bursa said more than 20 companies are already in the “pipeline” for initial share sales, including a handful of businesses from China, with more expected following the easing of investment rules.

“We expect companies who previously may not have wanted to come to the market because of this condition to now come forward,” Yusli said today. “I want some big ones this year.”

The bourse said discussions with Southeast Asia’s stock exchanges to develop an electronic trading link connecting five markets in the next two to three years are at a “fairly advanced stage.”

Southeast Asia’s stock exchanges signed a preliminary agreement on Feb. 23 to develop a trading link to boost competitiveness and lure more overseas funds into the region.

To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net

Last Updated: July 20, 2009 23:12 EDT