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The MAGNIFICENT 7 of Bursa Malaysia - (KingKKK)

KingKKK
Publish date: Sun, 21 Jan 2024, 09:17 AM

Bursa Malaysia's Magnificent 7 are:

  • PBA: Penang's water company, ensuring public well-being through consistent supply and sanitation.
  • YTL: Diversified infrastructure giant, building a sustainable future with innovative energy solutions.
  • YTLPOWER: Southeast Asia's renewable energy champion, powering growth and greening the grid.
  • TENAGA: Malaysia's energy backbone, keeping the lights on with stability and reliability.
  • UEMS: Owns huge landbank in Johor. Master builder of vibrant townships, shaping the landscape of modern Malaysia.
  • IOIPG: Real estate developer with a diverse portfolio, focusing on residential, commercial, and mixed-use projects..
  • SUNWAY: Sunway Berhad is a diversified conglomerate excelling in real estate, construction, education, healthcare, and leisure.

  • Background of US Magnificent 7


    1. US Magnificent 7 outperformed S&P 500 in 2023

    Magnificent 7 refers to a group of seven major technology companies that experienced exceptional performance in 2023:

    • Nvidia (NVDA): Leader in graphic processing units (GPUs) and artificial intelligence (AI).
    • Apple (AAPL): Tech giant renowned for its iPhones, Macs, and software ecosystem.
    • Microsoft (MSFT): Software giant with dominant Cloud Computing and productivity software offerings.
    • Amazon (AMZN): E-commerce powerhouse with growing cloud computing and streaming services.
    • Alphabet (GOOG/GOOGL): Parent company of Google, dominating search engines and online advertising.
    • Meta Platforms (META): Leading social media company with Facebook, Instagram, and WhatsApp.
    • Tesla (TSLA): Electric vehicle pioneer driving innovation in automotive and clean energy.




    Why are they called Malaysia Magnificent 7?


    Malaysia Magnificient 7 are the counters that was not affected by the recent selldown. In mid-January, FBMKLCI declined due to negative sentiment from the some small-cap companies selldown. The details are in the news below. It has wiped off more than RM7 billion of market cap.

    Small-cap selldown wipes off over RM7b market cap from 13 worst-hit counters (theedgemalaysia.com)


    Against KLCI's 2%, these 7 are not affected and in fact still show positive return YTD. The return YTD are:

    YTLPOWER - 40%

    PBA - 32%

    IOIPG - 24%

    UEMS - 19%

    YTL - 14%

    SUNWAY - 13%

    TENAGA - 5%



    Why are these companies performed better and better and did not experience SELLDOWN? These are reasons these companies share price generated positive return YTD:


    Strong Fundamentals: These companies generally possess strong financial fundamentals, such as consistent profitability, manageable debt levels, and healthy dividend payouts. This financial stability fosters investor confidence and attracts long-term investment, potentially driving their share prices higher than the broader market (especially weak fundamental company that are prone to sell off).


    Growth Potential: The Magnificent 7 are actively pursuing promising growth opportunities. YTL Power's focus on renewable energy, UEMS's expansion plans, and IOIPG's land bank and sustainability initiatives are just a few examples. This potential for future growth can attract investors seeking higher returns, potentially propelling their share prices ahead.


    Balance Sheet Bulwarks: While some listed companies has excessively high debt levels, the Magnificent 7 generally boasted sturdy balance sheets. Low debt-to-equity ratios and ample cash reserves provide them with resilience against economic downturns and flexibility for future investments. This stability attracts risk-averse investors seeking reliable long-term growth, potentially pushing their share prices ahead of the market. For example, PBA has net cash of RM193 million. Just the net cash only already 58 sen per share (close to 25% of its market price of RM2.39 now!)


    Malaysia Magnificent 7 1-year performance


    5-years performance

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    1 person likes this. Showing 4 of 4 comments

    wendy76

    well-written article. Thank you KingKKK.

    2 months ago

    speakup

    Tenaga still a lot upside

    2 months ago

    wallstreetrookieNEW

    Agree with all stocks listed above except PBA

    2 months ago

    calvintaneng

    THIS TSH RESOURCES WILL OUTSHINE ALL ONE DAY

    Why is calvintaneng so bullish on TSH RESOURCES? Lessons from Investing in GSB (slow and steady win the race) Calvin Tan

    https://klse.i3investor.com/web/blog/detail/www.eaglevisioninvest.com/2024-01-22-story-h-190294018-Why_is_calvintaneng_so_bullish_on_TSH_RESOURCES_Lessons_from_Investing_

    iinvestbodoh talked bad about Gsb and missed it totally!

    2 months ago

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