So you think you know about Malaysia? If so, see if you can answer these questions.

A. What is Malaysia’s largest economic sector?

Ans: Manufacturing (electronics and electrical components) - despite all the brouhaha over palm oil. This is followed by the services sector (banking, insurance, trade etc.) It is estimated by Deutsche Bank that only 2.1% of manufacturers are listed on the KLSE. Is it because manufacturers don’t need to raise equity, or is it because Malaysia just isn’t seen to be an important market for IPOs? Incidentally when was the last time you remember a significant IPO in Malaysia?

B. What are the two largest sectors on the KLSE with the largest market cap?

Ans: Banking and plantations. Companies in these sectors are intrinsically linked to the local economy either because it’s where their consumers are or where their fixed resources are. Either way, they almost have to list nationally.

C. How many percent of market cap does the top 10 stocks in Malaysia comprise?

Ans: The top 10 stocks account for 50% of the KLCI. Sometimes you just have to wonder how much choice investors in the Malaysian market really has.

D. Of the 10 stocks, what sectors are 7 of them in?

Ans: You guessed it. Banking and plantation. Again… where’s the choice here?

E. What percentage of the KLSE do GLCs (government-linked counters) comprise of?

Ans: 35%. Nothing wrong with that as such, except until you realise that these companies operate in an environment where government regulation is heavy. So you really have to wonder how strong their balance sheets and income statements really are.

F. What is Malaysia’s largest export market?

Ans: US and EU. Not China (although that is growing). Not the Middle East. That means that the US and EU are Malaysia’s largest customers…. but is this because of, or despite our government?

Happy Trading!!