Are these the best Malaysian stocks to buy in 2022?
Malaysian stocks remain undervalued, which could mean attractive entry points for investors. In this article, we look at 10 of the best Malaysia-listed shares you can consider trading.
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Why should you trade these Malaysian stocks?
The FTSE Bursa Malaysia KLCI index, which tracks the performance of the largest companies listed on Bursa Malaysia, is still down by over 7% in 2022 as of 22 September. Analysts believe the lower price presents investors with opportunities to add these 10 stocks to their portfolio.
Malayan Banking Berhad (KLSE: MAYBANK)
Maybank shares are up 5% year-to-date.
Shares of Malaysia’s most valuable bank have a strong rating of ‘buy’ and average price target of 10.18 ringgit, based on the latest data published by independent investment site i3investor.
The price target equates to a 16.5% upside potential from the stock’s last traded price of 8.74 ringgit on 22 September 2022.
Kenanga analysts named Maybank as its top banking pick for its ‘stellar dividend returns (7% to 8%) paired to its commendable asset quality readings’. They have a price target of 11.05 ringgit on Maybank.
Sime Darby Berhad (KLSE: SIME)
A total of 37 out of 44 analysts have rated Sime Darby shares a ‘buy’, with seven rating it ‘hold’.
The multi-industry conglomerate’s stock also has an average price target of 2.62 ringgit, which represents a 19.6% upside potential from its latest share price of 2.19 ringgit.
RHB’s research team said the stock is worth buying at a price target of 2.55 ringgit, despite recent discussions to sell Ramsay Sime Darby Healthcare (RSDH) falling through.
‘While the loss of potential special dividends from the sale of RSDH is a disappointment, we continue to like Sime Darby for its resilient China motor and Australasia industrial segments,’ the analysts wrote, adding that the stock still provides an attractive c.0.5% dividend yield.
CIMB Group Holdings Bhd (KLSE: CIMB)
CIMB shares have a majority rating of ‘buy’ and average price target of 5.87 ringgit.
The price target equates to a 7.4% upside potential from the stock’s last traded price of 5.41 ringgit.
AmInvest’s equity research team have called CIMB a ‘buy’ alongside a price target of 6.70 ringgit a share, as it remained bullish on the banking sector.
The country’s second largest bank has seen its share price drop slightly this year.
Top Glove Corporation Berhad (KLSE: TOPGLOV)
Top Glove shares are down by 74% in 2022. Its Singapore listing is down by approximately the same amount.
The medical glove maker’s total sales revenue declined 66% year-on-year (YoY) to 5.57 billion ringgit for FY2022, while profit after tax declined 96% YoY to 292 million ringgit for the same period.
‘The glove industry is experiencing the effects of normalisation after delivering exceptionally high earnings over the past two years, due to the surge in demand for gloves and higher average selling prices (ASPs) during the pandemic,’ the group said of its performance.
Looking ahead, the group expects the business environment ‘to remain challenging’ into 2023.
Capital A Berhad (KLSE: CAPITALA)
Capital A, the corporate name of low-cost carrier AirAsia, reported a revenue of 1.47 billion ringgit for the second quarter (Q2) of 2022, more than double the revenue from the same period a year ago.
Despite the revenue jump, the group reported a net loss of 1.12 billion ringgit in Q2 2022, 55% higher YoY. It said this was ‘mainly due to share of loss from associates and foreign exchange loss’.
Capital A shares are down 20% in 2022. Analysts have a majority rating of ‘hold’ on the stock, alongside an average target price of 0.78 ringgit. The target price represents a 20% upside potential from Capital A’s last traded price 0.65 ringgit.
Petronas Gas Bhd (KLSE: PETGAS)
Despite its underperformance in 2022, analysts still foresee a 14% upside on the Petronas Gas share price in the next 12 months.
Out of 30 analysts rating the oil and gas stock, 17 have given a ‘buy’ call, with 13 rating it ‘hold’.
Kenanga researchers recommended investors to ‘hold’ the stock alongside a price target of 17 ringgit, while RHB remained neutral with a price target of 17.35 ringgit.
Tenaga Nasional Bhd (KLSE: TENAGA)
Tenaga shares are down 5% in 2022, prompting 64 out of 70 analysts to urge investors to buy the stock.
Analysts also have an average price target of 11.50 ringgit on the electric utility company’s shares, equating to a 31% price upside in the next 12 months.
Kenanga researchers said Tenaga is their top utilities stock pick, for it being a potential economy reopening play underpinned by the recovery of electricity demand from the commercial and industrial sectors.
Bermaz Auto Bhd (KLSE: BAUTO)
Although Bermaz Auto shares are up 19% year-to-date, 39 out of 43 analysts polled believe the stock is worth adding to investors’ portfolios.
Analysts have an average price target of 1.96 ringgit on the automobile distributor’s stock, which work out to be a slight price upside of around 2%.
Of the latest equity research reports, CIMB was the most bullish with a price target of 2.4 ringgit a share, equating to a 29% upside potential in the next 12 months.
RHB Bank Bhd (KLSE: RHBBANK)
RHB shares are up 5% year-to-date, sharing a similar price trajectory as Maybank.
Shares of Malaysia’s fourth largest bank have a consensus rating of ‘buy’ and average price target of 6.80 ringgit, based on the latest data published by independent investment site i3investor.
The price target equates to a 20.1% upside potential from the stock’s last traded price of 5.66 ringgit.
Hong Leong Investment Bank’s research analysts favoured RHB among mid-sized banks for its ‘high common equity tier one (CET1) ratio and attractive price point’. They have a ‘buy’ recommendation and price target of 11.05 ringgit on RHB.
Astro Malaysia Holdings Bhd (KLSE: ASTRO)
Astro shares are down 12% in 2022. A majority of analysts believe that this makes the entertainment and media group’s stock worth buying.
Analysts also foresee that the stock has the potential to rally 57% in the next 12 months to a share price of 1.31 ringgit.
How to trade the FTSE Bursa Malaysia KLCI index
With us, you can trade the FTSE Bursa Malaysia KLCI stock market index, which tracks the 30 largest companies on the Bursa Malaysia. This allows you to trade on the price of the index as a whole.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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