5 Reasons to Invest in Malaysian Stock Exchange

Investment in Malaysian Stock Exchange

Malaysia is a country which many people like because it offers robust mature economy, highly educated working class, supportive government and state-of-the-art infrastructural facilities that has truly transformed the face of this Asia Pacific country and making it one of the most-sought investment destinations for all the investment enthusiasts around the world.

The international investors who love investing in global markets are keen to invest in Malaysian stock exchange because this stock exchange offers promising figures as under:

# The Malaysian Stock Exchange (MYX) is ranked as 26th largest exchange out of total top 79 stock       exchanges in market capitalization estimating to ($397.39 Billion)

# The market cap of this stock exchange over Malaysia GDP ratio is 127.21%

# Malaysia ranks 36th out of 240 countries in the GDP index the Gross Domestic Product of Malaysia is $ 312.4 Billion

# In terms of population, out of 240 countries across the globe Malaysia stands at 43rd rank with total population being 28.27 Million

Thus, after looking at the above facts and figures of Malaysia it will help you understand that why investing in Malaysia is one of the most sought investment destination in recent times.

Following are more details about Malaysian Stock Exchange (MYX)


#
The Malaysian Stock Exchange is also known as The Bursa Malaysia Stock Exchange

# The head office of this stock exchange is based in Kuala Lumpur, Malaysia.

# The companies listed on the Bursa Malaysia Stock Exchange are predominantly Malaysian based companies

# The official trade currency of the Bursa Malaysia Stock Exchange is the Malaysian Ringgit.

# The Bursa Malaysia Stock Exchange have around 900 listed companies on its exchange

# The daily value trade of the Bursa Malaysia Stock Exchange can range average between 2-3.5 billion RM.

Apart from the above statistics following are other reasons that makes the nature of the Malaysian Stock Exchange vibrant.

Malaysia is a country which since its inception has always moved ahead and is on a constant forward motion. It is a country that is rich in mineral resources as well as fertile soils. Despite being rich in its natural resources, Malaysia did not stop and depend its economy on the resources rather the country took drastic decisive steps to move ahead and shifted the focus of its economy from being agrarian economy to be more focused towards being a multi – sector economy. Thus Malaysia saw the future potential in service based sector, engineering and manufacturing sector and transited its way from an economy that was dependent on agriculture and primary commodities to an economy that was concentrated on services and high-tech manufacturing.

A great focus and development in engineering and manufacture sector has made Malaysia is one of the world’s largest exporters of electronic devices like semiconductors, electrical equipments, solar panels, communication devices etc. Even though Malaysia has long back shifted it focus from being natural resources based economy to manufacturing and service based economy still Malaysia remains to be one of the top exporters of natural resources like natural gas, rubber, palm oil etc.

Malaysia has been a country well-known for offering Islamic banking and financial services. So if the investors want to invest in leading manufacturing companies that produce high-quality semiconductors, communication devices, solar panels then investing in Malaysian stock exchange is the best option. The Malaysian Stock Exchange offers access to all the top manufacturing companies that are growth oriented and offer good returns on your investment.

Malaysian Stock Exchange does not just include Bursa Malaysia Stock exchange rather it is a part of the ASEAN Exchanges. The ASEAN Exchange is a collaboration of Stock Exchange of Asian countries which include Bursa Malaysia Stock Exchange, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, The Philippine Stock Exchange Inc, Singapore Exchange and The Stock Exchange of Thailand.

This ASEAN Exchange is group of various Asian stock exchanges that were established with a motive to provide investors with an larger cross-border and an interlinked capital market that focuses on satisfying the need of international investors. The ASEAN Exchange promotes cross-border investments, mobilization of intra-ASEAN funds and trading of equity markets. But when we talk about the Malaysian Stock Exchange then the Bursa Malaysia is the main stock exchange where all the investors can invest by buying stocks of the listed companies.

Why invest in the Malaysia stock market?


As mentioned earlier, Malaysia stock exchange is home to some of the biggest global companies of various sectors and industries. For example, IHH Healthcare Bhd which is the 2nd largest healthcare company in the world is listed on the Malaysia stock exchange. This company has its presence by way of hospitals in many countries across the globe and predominantly this company has its chain of hospitals in Malaysia, Singapore, Turkey, and India.

Another most interesting fact of investing in Malaysia stock exchange is that this exchange has listed subsidiaries of global multi-national companies. Thus Malaysia Stock Exchange allows investment in listed subsidiaries of large multi-national companies. Subsidiaries of global companies such as Carlsberg A/S, Heineken N.V., British American Tobacco etc all have their regional subsidiaries listed on Malaysia Stock Exchange.

The global multi-national companies have their subsidiaries in Malaysia because of the local regulation in Malaysia. This is advantageous to both the companies and investors because: Investors get exposure of investing in global companies while companies get access to international investors. Having global presence gives interesting earning prospects to investors because these huge global multi-national companies who have a strong cash generating potential provide dividends at higher rates to their investors.

One of the major reasons for all major global companies have their presence in Malaysia because Malaysia has a very vibrant economy. The reason for this vibrant economy is that Malaysia is not totally dependent on export driven model for generating income rather it has also generated demand from the domestic consumers. Income generation from domestic consumer has created some big brands and great companies. Thus the Malaysia stock exchange houses some of the most popular and successful domestic brands which have not only made their name Malaysia but also globally.

The Malaysia Stock exchange is also a forward-looking exchange. It has implemented many new initiatives. The Malaysia stock exchange is a market place for investors to buy and sell their stocks. By incorporating technological advancements the stock exchange allows smooth transaction handling of these transactions. The stock exchange has created and introduced a lot of ways to educate their investors regarding investments and companies listed within the exchange.

In short we can summarize that following are the 5 most important reasons for investors to investing in Malaysia stocks exchange:

The strength of Malaysian economy is based on: manufacturing sector, export-driven, high technological advancement based, knowledge-based and capital-intensive industries.

# Malaysian government is very supportive and they formulate policies that provide attractive tax incentives to the investors

# Ample availability of natural resources like crude oil, natural gas, tin, timber, palm oil and rubber so investment in these listed companies is a good proposition

# Malaysia is a structured and recognized leader in Islamic Finance and Investment

# Malaysian Stock Exchange is a well-regulated and structured secondary market

Investing in Malaysia Stocks Market


The Malaysian Stock Exchange is predominantly dominated by trading in Exchange-traded funds (ETFs). The ETFs are one of the easiest ways of investing in Malaysia Stocks Exchange. Investors can hold a bag-full of ETFs that are diverse basket of stocks. Having a diversified basket of stocks will decrease the risk associated with it. Another major advantage of investing in Malaysian Stocks exchange ETFs is that these securities can be easily bought and sold on other stock exchanges like the U.S. stock exchange. One of the most popular ETF instrument used in Malaysia for investment is the iShares MSCI Malaysia Index Fund (NYSE: EWM).

Apart from Exchange-traded funds another trading instrument that is popular with the Malaysian Stock Exchange is the American Depository Receipts (ADRs). The American Depository Receipts is one of the most preferred option by international investors as in this method the investors can avoid foreign exchanges. Investors can purchase small portion of individual companies with the help of American Depository Receipts but the only thing that investor needs to remember is that American Depository Receipts are relatively illiquid and can be a tad bit difficult to transact i.e. difficult to buy and sell at attractive prices.

Following is a list of some of the most popular Malaysian American Depository Receipts:

Malayan Banking Berhad (MLYBY)
Genting Berhad (GEBHY)
Genting Malaysia Bhd (GMALY)
MBf Holdings Berhad (MBFBY)
Tenaga Nasion Berhad (TNABY)


Finally, all the international investors can now start investing in the Malaysia stocks exchange called as the Bursa Malaysia. The Bursa Malaysia is one of the largest stock exchange markets in Asia and offers investment choices with just under 1,000 listed companies. Thus go ahead and opt for the Bursa Malaysia Market for doing stock investment in international market.

Leave a Reply