Blue Chip Stocks in Malaysia: An Introduction

Investing in stocks can be a daunting task, especially for beginners. With so many different types of stocks and markets to choose from, it can be difficult to know where to start. One type of stock that is popular among investors is blue chip stocks. In this article, we will provide a comprehensive guide to blue chip stocks in Malaysia, including what they are, their performance over the past decade, and the top 10 hottest blue chip stocks in Malaysia. We will also compare the performance of blue chip stocks in Malaysia with those in the US.

Blue chip stocks are shares of large, stable companies that have a proven track record of consistent earnings and growth. These companies are typically leaders in their respective industries and have a strong brand presence. The term "blue chip" refers to the highest-value poker chips in the game, which were traditionally colored blue.

Because blue chip stocks are considered to be low-risk investments, they are often sought after by conservative investors who are looking for long-term gains. While blue chip stocks may not offer the same potential for explosive growth as smaller, more volatile stocks, they are generally considered to be a safer investment option because they are less likely to experience significant drops in value.

Over the last decade, blue chip stocks in Malaysia have generally performed well, despite some fluctuations along the way. The FTSE Bursa Malaysia KLCI Index, which tracks the performance of blue chip stocks in Malaysia, increased by approximately 39% from 2010 to 2020.

According to data from Fitch Solutions, several blue chip sectors outperformed the KLCI index. These sectors included consumer goods, healthcare, and technology. Among the top-performing blue chip companies in Malaysia were Public Bank, Petronas Chemicals Group Berhad (PCG), and Tenaga Nasional Berhad (TNB).

--

If you're interested in investing in blue chip stocks in Malaysia, here are the top 10 hottest blue chip stocks based on market capitalization, liquidity, and historical performance:

Malayan Banking Berhad (Maybank)

Public Bank Berhad

Tenaga Nasional Berhad (TNB)

CIMB Group Holdings Berhad

Petronas Chemicals Group Berhad (PCG)

Genting Berhad

IHH Healthcare Berhad

Maxis Berhad

Hong Leong Bank Berhad

Telekom Malaysia Berhad (TM)

Maybank, the largest bank in Malaysia, has consistently been one of the best-performing blue chip stocks in the country. The bank has demonstrated solid financials and has managed to maintain high dividend payouts over the years, making it an attractive investment option for many investors.

Public Bank, another major player in the banking sector, has also been a top-performing blue chip stock in Malaysia. Despite the challenging economic environment, the bank has remained profitable and has continued to deliver consistent returns to its shareholders.

Tenaga Nasional Berhad, the national electricity company of Malaysia, has also been a strong performer in recent years. The company has benefited from a growing demand for electricity in Malaysia and has made significant investments in renewable energy sources, which have helped to drive growth.

While blue chip stocks in Malaysia have performed well over the last decade, how do they compare to their US counterparts? The Dow Jones Industrial Average (DJIA) – which tracks the performance of blue chip stocks in the US – increased by approximately 194% between 2010 and 2020. This is significantly higher than the growth rate of the KLCI during the same period.

One of the reasons why US blue chip stocks have outperformed their Malaysian counterparts is the strength of the US economy. The US has a highly diversified and dynamic economy, which has enabled many blue chip companies to thrive and grow even during times of uncertainty.

Another factor that has contributed to the strong performance of US blue chip stocks is the presence of many technology giants such as Apple, Amazon, and Microsoft. These companies have experienced explosive growth over the last decade, thanks to their innovative products and services, and have become some of the largest and most valuable companies in the world.

Investing in blue chip stocks can be a smart move for those looking for a reliable and stable investment opportunity. Malaysia's blue chip stocks have performed well over the last decade, with several companies delivering consistent earnings and dividends to their shareholders. By keeping an eye on the top blue chip stocks in Malaysia, investors can make informed decisions about where to put their money. And while US blue chip stocks have also performed well, there are plenty of opportunities to invest in local companies and support Malaysia's economy.