Powering the small-cap surge are counters in the technology, property, construction, and industrial sectors. Riding on the artificial intelligence boom, technology counters are the stars of the show.
Undoubtedly the biggest winner is electronics manufacturing services firm Notion VTec Bhd, whose shares have rocketed 434.5% year-to-date (YTD).
Following behind are information and communications technology distributor VSTECS Bhd which has run up 206% YTD, and SNS Network Technology Bhd at 170.8%, both which have profited from their links to Elon Musk’s SpaceX.
VSTECS was appointed a distributor for SpaceX’s Starlink high-speed internet service in January this year while SNS was recently appointed by VSTECS as the authorised retailer for Starlink’s equipment.
Hard disk drive components manufacturer JCY International Bhd is up 189% YTD, and 315.6% from a year ago. Information technology services provider MMAG Holdings Bhd has notched up a 130.8% gain so far this year.
Cable manufacturer Southern Cable Group Bhd has risen 109.3%, capitalising on rising demand for renewable energy, while solar photovoltaic supplier Pekat Group Bhd is up 103.5%.
Smaller-cap property developers have also been on a tear since the second half of last year. Chin Hin Group Property Bhd has soared 212% YTD while Mah Sing Group Bhd is up 126.6%, and 208.3% over the past year.
UEM Sunrise Bhd may be up only 40.5% this year but the mid-sized developer’s share price has skyrocketed 353.9% to RM1.18 from just 26 sen a year ago. Anyone who took a punt on UEM Sunrise when it was languishing as a penny stock a year ago would be laughing all the way to the bank today.
Breaking a 10-year resistance
Bursa Malaysia’s FBM Small Cap Index has hit a 10-year high, rising 234 points or 1.21% to 19,549.28 points yesterday and breaching the level that had stood since August 2014.
The FBM Small Cap Index encompasses all of the companies on Bursa Malaysia excluding the top 100 companies (i.e. the top-30 companies on the FBM KLCI and the next 70 biggest counters on the FBM Mid 70 Index).
The Small Cap Index is up 19.5% YTD and 30% from a year ago. In contrast, the KLCI is up 10.98% this year and 16.4% over the past year.
Bursa Malaysia has been one of the best performing exchanges in the region this year. On May 7, the total market capitalisation of all public-listed companies breached RM2 trillion for the first time in its history.
“The local stock market was firing on all cylinders with positive market breadth as all sectors posted positive YTD gains, led by utilities, construction and property,” said Bursa Digital Research in a recent report.
It added that May 2024 witnessed the FBM Mid 70 Index and FBM Top 100 Index hitting record highs after surpassing their pre-pandemic peaks.
“In terms of size, the market’s gains in May were led by small- and mid-cap companies as the ACE Market, FBM Small Cap Index and FBM70 outperformed the benchmark FBM KLCI,” it added.
It noted that the market’s strong performance was boosted by net foreign fund inflow of RM1.48 billion in May.
“After reversing the net outflows in March and April, Malaysia is back on foreign investors’ radar following rising investment themes such as artificial intelligence and data centres,” said the report.