This article first appeared in The Edge Malaysia Weekly on January 8, 2024 - January 14, 2024

Stock markets have had a rocky start, so far, in this new year. All three major indices in the US market — the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite — have fallen into the red for the year to date, as had many regional markets including Singapore, Thailand, Hong Kong and China. This makes the robust gains for Bursa Malaysia all the more surprising, as the outperformer (see Chart 1).

Why has Bursa’s performance diverged from the rest of the world? The market benchmark, FBM KLCI, as well as the broader FBM Emas Index surged, while the FBM Small Cap Index fared even better. Among the largest cap stocks, YTL Power and YTL Corp have done exceedingly well, racking up double-digit gains — the two stocks alone accounted for nearly 30% of the FBM KLCI’s year-to-date (YTD) gains (see Table 1).

Tables 2 and 3 show the stocks that recorded substantially high share turnover and traded volumes as well as those that chalked up the highest price gains in the first trading week of 2024. Most of the stocks in the two tables are loss-making small-cap companies with zero dividend yield. Fundamentals-wise, they don’t appear to have much to justify the rally. For investors chasing, or intending to chase, the rally — mind your step!

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