FBMSCAP Index up 35% from November low


MALAYSIA’S main equity index is languishing, but the nation’s small stocks are powering ahead as retail investors pile into a risky corner of the market.

The FTSE Bursa Malaysia Small Cap (FBMSCAP) Index has jumped 35% from a November low and is trading at the highest level since 2000, relative to the FTSE Bursa Malaysia KLCI Index. The benchmark index is down 1.8% for the year.

The outperformance has seen the small-cap index’s market value almost triple from a year earlier to a record RM137 billion, underscoring the growing heft of amateur stock-pickers who drove up market volumes globally last year.

“Small-cap parties are getting a boost from the rising number of retail investors, who usually prefer such names,” said Danny Wong, CEO of Areca Capital Sdn Bhd, which had about RM1.73 billion in assets as of April last year. “Prices are no longer cheap. One should stay selective.”

Political uncertainty has weighed on Malaysia’s main stock index along with the slide in the three of the biggest glovemakers whose investment appeal has waned from global vaccine rollouts. Top Glove Corp Bhd, Supermax Corp Bhd and Hartalega Holdings Bhd are the biggest decliners on the benchmark so far this year.

CGS-CIMB Research’s small- and mid-cap corporate access day event held last week drew 145 clients from 65 institutions, he said.