Thinking hard on what sectors to invest in in 2023? Find out here which sectors did well and worse in 2022!

2022 has been a difficult year for stock markets around the world. The Russia-Ukraine conflict caused crude oil, natural gas, and other food prices to skyrocket. The Federal Reserve raised interest rates which caused a panic in the markets.

Malaysia’s stock market is no different. It declined by 4.6% in 2022, in line with most stock markets around the world, leading many to be worried over their investments in 2022.

However, not all was gloomy for the year. Some Malaysian stocks actually performed better for the year, and you can identify which sectors these are and make better investment decisions moving forward.

Find out here the top and worst-performing sectors in Malaysia for 2022!

Our Data

This article will be utilising data from investing.com, analysing the returns from 31 December 2021 to 30 December 2022 for the following sectors in Bursa Malaysia:

  1. Construction
  2. Consumer Products and Services
  3. Energy
  4. Finance Services
  5. Healthcare
  6. Industrial Products and Services
  7. Plantation
  8. Property
  9. REIT
  10. Technology
  11. Telecommunications and Media
  12. Transportation and Logistics
  13. Utilities

Top Performing #1: Energy

The energy sector as proxied by Bursa Malaysia Energy Index was the top performer for 2022, rising by 10.3% for the year. 2022 was a very good year for most of the energy companies in Malaysia as crude oil and natural gas prices were high.

As a result, many of the energy companies registered strong profit growth. The Malaysian government also benefited from this, with Petronas’s profit rising by 120% to RM77.2 billion for the first 9 months of 2022.

Some of the biggest energy companies by size (market capitalisation) in Malaysia include

  1. Dialog Group: RM13.6 billion
  2. Yinson: RM7.1 billion
  3. Bumi Armada: RM2.8 billion
  4. Hibiscus Petroleum: RM2.2 billion
  5. Dayang Enterprise: RM1.5 billion

Top Performing #2: Plantation

2022 has been a good year for commodities in general. The plantation sector as proxied by the Bursa Malaysia Plantation Index rose by 8.1% for the year.

Palm oil prices increased by as high as 69.7% to RM8,757 in 2022, benefiting many palm oil companies in Malaysia. Furthermore, the strong recovery of India’s economy boosted demand for palm oil from Malaysia as India relies heavily on palm oil for cooking oil, food, shampoos, cosmetics, and biofuels.

These are the biggest plantation companies in Malaysia by market capitlisation:

  1. Sime Darby Plantation: RM30.2 billion
  2. IOI Corp: RM24.8 billion
  3. Kuala Lumpur Kepong: RM23.3 billion
  4. Batu Kawan: RM8.8 billion
  5. United Plantations: RM6.3 billion

Top Performing #3: Finance

Coming in at number 3, the finance or banking sector as proxied by the Bursa Malaysia Financial Services Index went up by 6.0% for the year.

Bank Negara Malaysia raised its interest rate by 100 basis points (bps) from 1.75% in March 2022 to 2.75% in November 2022. This means that banks can charge a higher interest rates on their loans, and registered stronger profits for the year. With the economy generally doing well too in 2022, many households and companies were able to honor their debt obligations and only a tiny fraction of loans went bad.

Some of the biggest financial companies in Malaysia include:

  1. Maybank: RM105.1 billion
  2. Public Bank: RM83.1 billion
  3. CIMB Group: RM60.5 billion
  4. Hong Leong Bank: RM41.7 billion
  5. RHB Bank: RM24.0 billion

Top Performing #4: Consumer Products and Services

The consumer sector as proxied by the Bursa Malaysia Consumer Products and Services Index rose by 1.5% for the year, placing it at as number 4 top performing sector in Malaysia.

With the borders reopened and lockdown restrictions lifted from the beginning of 2022, many of the consumer stocks benefited from the pent-up demand for Malaysians itching to go out and buy things. Retail sales (how much products are Malaysians buying from retail stores) growth shot up to 24.2% for the first 10 months of 2022 compared to a growth of only 4.4% for 2021.

These are the 5 biggest consumer companies in Malaysia by market capitalisation:

  1. Nestle: RM32.5 billion
  2. PPB: RM24.4 billion
  3. Petronas Dagangan: RM22.1 billion
  4. Mr DIY: RM19.1 billion
  5. Genting Bhd: RM19.0 billion

Worst Performing #1: Technology

The worst performing Malaysian sector in Malaysia in 2022 goes to the technology sector. The Bursa Malaysia Technology Index declined by a whopping 34.3% for the year.

As central banks around the world increased interest rates including Malaysia, the technology sector was the worst hit as investors fled to investments that were safer. Technology companies especially smaller ones, are inherently riskier investments to hold. With the tensions between the U.S. and China worsening, electrical and electronics companies were also hit in Malaysia as they supply many of their components to China.

Some of the biggest technology companies in Malaysia include:

  1. Inari Amerton: RM9.9 billion
  2. Vitrox Corp: RM7.2 billion
  3. D O Green Tech: RM6.9 billion
  4. MyEG: RM6.4 billion
  5. Malaysian Pacific Industries: RM5.8 billion

Worst Performing #2: Healthcare

Ah, the healthcare sector! Once, the crown jewel of Malaysia in 2020, it has now fallen from far from its peak. The Bursa Malaysia Healthcare Index comes in as the second worst performing sector with a decline of 25.5%.

The healthcare sector mainly comprises of glove stocks that had been the talk of the town in 2020 when everyone was buying them excessively. Since then, they have declined considerably in 2021 and 2022 as investors moved away from them due to the decreasing need for gloves as most of the world increased their vaccination rates.

The top healthcare companies in Malaysia are:

  1. IHH Healthcare: RM52.8 billion
  2. Top Glove: RM6.8 billion
  3. Hartalega: RM5.5 billion
  4. KPJ Healthcare: RM4.3 billion
  5. Kossan Rubber: RM2.7 billion

Worst Performing #3: Industrial Product

Coming in at number 3 on the worst performing sector list, the Bursa Malaysia Industrial Product Index declined by 10.3% for the year.

It has been a rough year for industrial and manufacturing companies as they were first hit by higher commodity prices which raised their raw material input prices. Later, the worsening economies in U.S., China and Europe in the second half of 2022, reduced demand for their products in the global markets.

These are the 5 biggest industrial companies in Malaysia:

  1. Petronas: RM67.6 billion
  2. Press Metal: RM40.5 billion
  3. Hap Seng: RM16.0 billion
  4. Sunway: RM7.7 billion
  5. Chin Hin: RM5.7 billion

Worst Performing #4: Property

The property sector comes in at number 4 in the list of worst performing sectors. The Bursa Malaysia Property Index declined by 8.9% for the year.

This shouldn’t come as a surprise as higher interest rates by Bank Negara Malaysia had made it more expensive for prospective homebuyers to obtain financing to buy houses.

Here are the 5 biggest property developers in Malaysia by market capitalisation:

  1. IOI Properties: RM6.0 billion
  2. UOA Development: RM4.0 billion
  3. Sime Darby Property: RM3.1 billion
  4. Tropicana Corp: RM2.6 billion
  5. SP Setia: RM2.5 billion

Conclusion

2022 might have been a bad year for many of the stock markets around the world and in Malaysia, but there were some sectors that did well. It’s important to identify the top and worst-performing sectors in 2022, to give yourself more wisdom when selecting your investments in the year 2023. Historical data might not forecast the future but it does give you insights into what could possibly do well or bad moving forward depending on what challenges the year brings.

 

Let us know in the comments below which sector you are planning to invest in!

 

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