New heavyweight landscape on Bursa Malaysia

This is written by my editor.

Over the last 10 years, the landscape of Malaysia's biggest companies has changed significantly. Looking at the top 10 list, we now have much bigger companies. In terms of total size, the heavyweights have almost tripled their value to nearly RM450 billion.

There are other interesting observations. Investors appear to have more love for businesses like banking and there are new players like Petronas Chemicals Holdings Bhd. Here are the main features and what they probably mean.

1. THE LEADER IS NOW MAYBANK. Ten years ago, Telekom Malaysia Bhd (TM) was the most valuable company, but today it is Malayan Banking Bhd with a market value of almost RM62 billion.

It has tripled its worth over the period. Its pole position reflects a regional expansion strategy that continues paying dividends.

What is more interesting is that the former leader is out of the top 10 and is now ranked 22nd. The main reason for this is the fact that the growing mobile telecommunications business was spun off under Axiata Group Bhd, leaving TM with the fixed-line and Internet service operations. Its offspring, Axiata, is ranked sixth.

2. IT'S NOT YOU, IT'S ME. Investors are loving banks today and breaking up with utilities like TM and Tenaga Nasional Bhd (TNB). The passion for banking could be down to economic growth in Malaysia and Southeast Asia as lenders are seen as proxies to economies. The young population of Southeast Asian countries also means that more aspiring young professionals will borrow to buy cars and homes.

TM's decline has been explained above and as for TNB, it needs to have more certainty over power prices that are controlled by the government.

They may talk and sing to their oil palm trees, but if that means creating valuable businesses, investors are glad to pay for their stocks. 

IOI Corp Bhd and Sime Darby Bhd are in the top 10 today, thanks to growing demand for cooking oil and soap, among others. Erratic weather patterns mean that supply disruptions could be a regular feature, keeping palm oil prices high.

What's more as another big planter, Felda Global Ventures, will make its debut on the stock market next year and it seems unfazed by the spectre of a recession in 2012.

4. THE NEW KIDS ON THE BLOCK ARE NOT KIDS. Half of the top 10 list have changed. Gone are names like British American Tobacco and MISC and we now have companies like Axiata and Maxis. The new names are worthy heavyweights, reflecting investors' appetite for growth in mobile telecoms, petrochemicals and plantations.

While technology can be disruptive to companies like TM, it is also a boon to mobile operators with a regional footprint and vision to adapt to the changing needs of the modern consumer.

5. ENTREPRENEURS CREATE A LOT OF VALUE. There are four companies that are not government-linked in the new top 10 list compared with three some 10 years ago. What this means is that we do have world-class entrepreneurs running companies that can stack up against GLCs. They have created much value over the last 10 years.

IOI Corp for instance, has seen its market value surge a massive 15 times to RM32 billion. Gaming and power group Genting Bhd's market value is up six times to almost RM40 billion.

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