The Significance of Malaysia's Oil and Gas Industry

Malaysia is an important player in the global oil and gas industry, being the 5th largest exporter of liquefied natural gas (LNG) in the world. This industry is also a significant contributor to Malaysia's local economy, accounting for up to 20% of its annual GDP.

The production process of oil and gas is complex, involving multiple sectors from oil exploration to final products. Because of this, not all oil and gas stocks will be listed under the energy sector. In fact, these types of stocks can be found across different industries and any positive or negative news that affects them can impact the overall stock market. The prices of oil and gas stocks are highly correlated with international oil prices, which means that anything that affects global oil prices or the prices themselves could impact these types of shares.

Investing in oil and gas stocks requires a different approach when analyzing their financial performance compared to other industries. This is because these stocks rely heavily on projects and contracts. Therefore, investors typically use P/B ratio instead of P/E ratio when measuring their future growth potential.

Overall, the oil and gas industry is vital to Malaysia's economy and stock market. As it involves a complex supply chain and is widely used, anything affecting this industry can have ripple effects across multiple sectors and the overall stock market. Therefore, investors need to carefully analyze financial data and industry-related factors to make informed decisions regarding oil and gas stock investments.