Bursa Malaysia Sectorial Index Series - Which Sector Outperformed KLCI in year 2023?

Overview

The Bursa Malaysia Sectorial Index Series tracks the performance of all companies listed on the Main Market in the same sector classification. As of 31 Oct 2023, there are a total of 13 sectorial indexes, and the top 5 constituents by market cap are listed below:

Sectorial Performance as at 31 Oct 2023:

Top 3 Sectorial Leaders

1. Property

The property sector has been in the limelight lately with the share prices of some counters, especially the ones with exposure in the Johor property market, leaping between twofold and threefold this year.

The designation of Forest City as a special financial zone (SFZ) has raised the development potential of the Johor property market.

Other major projects like the Rapid Transit System (RTS) that will link Johor Bahru and Singapore, the completion of the MRT2 Monorail project, Pavilion Damansara, and Tun Razak Exchange have also contributed to higher property sales.

2. Utilities

Mainly led by YTL Group and YTL Power, will both of these companies' share prices continue to soar till the end of 2023? Plus high chance of being included in the 30-stock FBM KLCI in the upcoming November review

The excitement mainly revolves around YTL Power, since the company had emerged as Ranhill's substantial shareholder, another well-known utility company, while PowerSeraya, the group's power business in Singapore, is expecting its earnings to continue to be stronger, driven by the tight power market situation and high lock-in retail prices.

3. Construction

Which is also part of the stimulus that drives the property market, the construction sector is one of the Budget 2024 winners

The construction projects include the RM45 billion Mass Rapid Transit 3 (MRT3), Penang’s RM9.5 billion Light Rail Transit (LRT), and six nationwide flood mitigation exercises reportedly worth RM13 billion.

Top 3 Sectorial Laggards

1. Health Care

The sector had been recovering from the Oct 2022 low but was yet to outrun the benchmark KLCI performance YTD 2023, mainly pressured by glove makers.

headwinds in the glove continue in the year 2023 and are expected to continue in the year 2024, with the ongoing market imbalance, increased competition from regional companies, and elevated operational expenses weighing on profits.

IHH Healthcare Berhad, one of the major consistent stocks of the Bursa Health Care Index, had been pressured by staff cost, inflation pressures, and high energy prices, eventually dragging down its share prices in the year 2023, overshadowing strong gains in KPJ Healthcare Berhad, another major health care stock which saw its share prices nearly doubled from Oct 2022 low.

2. Industrial Products & Services

Most of the major constituent stocks of this index recorded lower earnings in the year 2023. All of them experienced similar challenges in both production and demand.

Many producers saw increasing production costs in the year 2023 due to the intermittent disruptions in the global supply chain and higher energy and manpower cost

Demand, on the other hand, had been weakened caused by global economic uncertainties and intense competition with lower profit margin

3. Consumer Products & Services

Being the second largest sector by market cap, most consumer products & services consistent stocks' prices had been flat or slowly declining since the year 2021 post-COVID-19 period.

Similar to industrial products & services, the sector facing challenges such as weakening ringgit and purchasing power, and volatility in the commodity and energy markets caused unstable material costs.