Bursa-Malaysia

The Malaysian Stock market is softening right now. With Multi Management Future Solutions expert find out which Small Cap Stock of Bursa Malaysia knocking on your door with a good return.

“Risk and Reward come in many essences, all you need tactics to look at the right direction”

 

 
People usually think why should they invest in small caps stocks, they are riskier and they are not well established as large caps stocks.

But they forget,

“There is no finish line. There are only mile makers.”

 

And few small caps stocks in Bursa Malaysia are the mile markers if you buy them now, because the market is softening due to various reasons and there are shares if you invest in them now they will benefit you in long-term.

But investors should make a very selective and strategic decision.

First of all, let’s aware you with FBM Small Cap Index.

What Are Small Caps Stocks?

Small Caps Companies are the companies which have small capitalization in the market.

They come under FTSE Bursa Malaysia Small Cap Index. There are 169 constituents in the index as in the latest report of  FTSE monthly report.

It comprises the companies within the top 98% of Bursa Malaysia.

Major Sector Division Of Small Cap Stocks

According to the report of FBM SMALL CAP INDEX, there are majorly 10 sectors in small-cap stocks.

Small Cap Stocks

Source FTSE monthly report

And below is the list of top 5  and bottom 5 small caps stocks.FTSE Small Cap Index

Source FTSE monthly report

YTD (Year to date), FBM Small Caps Index has fallen down by 32.48% and closed at 11683.89 on last Thursday. Whereas FBM KLCI has fallen down only by 6.72%.

We can understand by analyzing the above data that the market is softening, therefore, the best time to buy small caps stocks in Bursa Malaysia is now.

Let’s see what investors in Malaysia are saying.

Danny Wong CEO of Areca Capital said, investors should start watching at small-cap stocks but he appended later that investors should be cautious about the market and prefer selective procedure. He gave a little bit of idea where he is focusing. He said he is focusing on semiconductors and glove company which are basically export-oriented sectors.

Here we are presenting the list of top 5 small caps stocks in Bursa Malaysia which you should buy in 2019-

1. Comfort Gloves Bhd

Small Cap Stock

In the rubber glove sector, Comfort Gloves Bhd will be suitable as its YTD price has fallen down by 20.59% though it has been increased by in this month by 4.42%. Current P/E Ratio of Comfort Glove is at 18.66 and its current price is MYR 0.945.

The reduction is might be due to falling in net profit by 54%. Current m-cap of Comfort Glove BHD is MYR 525 million.

2. Globetronics Technology BHD
Small Cap Stock
 

In the semiconductors sector one of the stocks you can focus is Globetronics Technology BHD, with market capital of RM 1.18B, its YTD price fell down by 36.01% and the current price is at RM 1.76. Globetroics is trading at a price-to-earn ratio (P/E Ratio) 16.53 times relatively lower than other semiconductors companies.

Research head of MIDF, Mohd Redza Abdul Rahman stated few sectors in small caps stocks including construction, consumer, property, education, and renewable energy sectors can give potentially yield greater returns.

3. Spritzer Bhd    
 

Small Cap Stock                 

 

Spritzer Bhd produces and sells bottled water in Malaysia. The company provides carbonated flavored water, natural mineral water, non-carbonated flavored water, distilled water, and drinking water.

Mohd Redza suggested that there are smaller players that might offer some upside as Spritzer Bhd. It is falling 8.51% YTD with a PER of 16.04 times. The last price of Spritzer Bhd was at RM 2.150 providing the dividend of 5.5 sents.

4. Gabungan AQRS Bhd
 
Small Cap Stock

For construction sector Mohd Redza preferring Gabungan AQRS Bhd, which engages in the construction and property development activities, With a market capitalization of RM 398.15 million, falling 48.19% YTD and PER of 5.87 times.

He also added few other stocks, for example, Sarawak players such as KKB Engineering Bhd and Hock Seng Lee Bhd can be worth to look. KKB Engineering (KLSE: KKB) with the market capitalization of RM 217.83, fell to 12.63%  YTD. It is trading at the current price of RM 0.88. Whereas Hock Seng Lee Bhd (KLSE: HSL) fell down to 6.29% YTD, and price as on Thursday was RM 1.34.

5. Dayang Enterprise Holdings Bhd.
Small Cap Stock

Analysts and investor also preferring Dayang Enterprise Holdings Bhd in spite of ongoing geopolitical effect on oil prices.

Dayang Enterprise Holdings Bhd. is an investment company, which engages in the procurement of integrated support and services to the oil and gas industry. Its current trading price is at o.565 and PER is 45.20 times. It fell down 16.91% YTD. But in the last five days, it has been increased by o.89%.

The Bottom Line

The investors should also consider the domestic factor as development plan announced in 11th Malaysian five-year plan and budget 2019. And it will be smart to focus on international issues of Brexit and US-China trade war.

Small caps stocks are worth to buy for long-term investors. They have more risk as compared to mid and large-cap stock but it is always smart to diversify your portfolio with small caps stocks. They are down now so it is best to time to act and buy them.

Every active investor who is considering to invest in small caps stock of Bursa Malaysia should remember this line,

If you are being warned about worst of times it is only reasonable to ponder the best of times too.

And, Opportunities can be seen by the people who have an eye for it.

Multi Management Future Solutions has helped you with the research and data of this month and year to date condition of small caps stocks.

Use strategic planning, think about your goals and invest in Bursa Malaysia Small Caps stocks. Remember investing in small caps stock is a very cautious and selective method.

SO, Are you going to be smart and specific to take a small step towards FBM small caps stocks?

You can also subscribe to our service for daily stock signals with the target and stop loss, daily news, and updates on Malaysia Stocks. We are here If you want some investing advice for your future. Contact us now.

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