With the arrival of a new year, it’s timely to look back on 2023 and examine the sectors in Malaysia that flourished and those that flailed.
This is crucial, especially for investors, as strong performances suggest strong fundamentals. Meanwhile, those that struggled could nevertheless proffer hidden opportunities.
Here’s a look at the relevant sectors as classified by Bursa Malaysia and based on indexes from Dec 31, 2022 to the same date last year.
Top sectors
1. Utilities
The utilities sector, comprising electricity, water and gas companies, emerged the top performer of 2023, gaining about 51.4% on-year.
Power companies such as YTL Corp and Tenaga Nasional drove the sector upward, the latter by some 22% for the 2023 financial year. Elsewhere, Ranhill’s revenue also grew by an impressive 34% from January to September. National electricity producer TNB also saw a solid year.
Generally, electric companies experienced lower raw-material costs last year, which improved their revenue and profits. Crude-oil prices declined from US$85.90 in December 2022 to US$77 last month, while coal prices decreased from US$404 to US$146 over the same period.
2. Property
The property sector saw a resurgence, rising by 34.5% for the year as interest recovered among homebuyers after the pandemic.
According to data from the national property information centre, the total value of property transactions increased by 1.1% to RM85.4 billion in the first half of 2023 from RM84.4 billion in the second half.
Notably, some large property developers’ share prices have gone up sharply. UEM Sunrise announced that it exceeded its launch and sales target for the year, while Iskandar Waterfront announced plans to restructure and reorganise its company for the better.
3. Construction
The construction sector gained by 25.8% last year, largely owing to the government’s commitment to continue investing in large infrastructure projects such as MRT3, Penang LRT, and the Pan Borneo highway project in east Malaysia.
Notably, WCE Holdings’ share-price gain hit a high in 2023, with revenue from the West Coast Expressway almost doubling in the third quarter. Meanwhile, Ekovest also gained following the launch of the DUKE 3 highway in November.
4. Healthcare
The healthcare sector received a 9.3% boost last year, driven mostly by the “four horsemen” of glove stocks – Top Glove, Kossan, Hartalega and Supermax.
2023 saw a recovery in the gloves sector following a lacklustre year during which worries over Covid-19 waned in the wake of vaccinations. Interest in glove stocks plummeted, as did their share prices.
The resurgence of Covid-19 last year is likely a factor behind the renewed interest in this particular subsector.
Lowest-ranking sectors
1. Consumer goods
The most surprising of the bottom performers saw the consumer sector losing 5.6% last year. This is tied directly to how the Malaysian economy performed: economic growth came down to an average of 3.9% in the first to third quarters from 8.7% in 2022.
The context is that 2022 was a rebound year – everyone had a pent-up desire to buy things. But that could not continue forever, and the change in Malaysian appetite thus led to slower growth in this sector.
Senheng’s revenue saw a drop from RM354 million in the third quarter of 2022 to RM313 million last year as Malaysians cooled off on buying electronic products. Meanwhile, Berjaya Food also suffered a decline in profits.
2. Industrial products
The industrial sector is the second-worst performer of the year, losing 4.8%. This was primarily due to raised interest rates by central banks around the world, and strained relations between the United States and China.
Industrial, plantation and logistics company Shin Yang saw its revenue for the quarter ending September 2023 decline by 9.4%.
Meanwhile, UWC Bhd had a rough quarter as of October, with revenue dropping by almost half to RM45.5 million from RM98.1 million the year before.
This article was written by Su-Wei Ho for MyPF. To simplify and grow your personal finances, follow MyPF on Facebook and Instagram.