Many Singaporeans love to cross the Causeway and enter Johor Bahru to enjoy good food, relax with a comforting foot massage, and purchase groceries and essentials.
However, investors seldom view Malaysia as a great destination for investment.
This is where my colleague and The Smart Investor’s co-founder, David Kuo, sees an opportunity.
He believes that select Malaysian stocks can not only hold their own but also go on to do well and deliver solid returns over the long term.
In case you’re wondering how this could be the case, hear me out.
David is so confident about Malaysia that he invested RM 300,000 of his money into a portfolio of Malaysian stocks back in 2019.
Here are some reasons why he believes Malaysian stocks can deliver.
A booming stock market
For starters, Malaysia’s stock market experienced a boom last year, with a whopping 55 initial public offerings (IPOs).
These IPOs were also a sharp jump from the 32 back in 2023.
It was also the highest number of listings that Bursa Malaysia (KLSE: 1818) has welcomed in nearly two decades.
Of the total, 11 were main market listings, 40 were on the ACE market, and the remaining four were on the LEAP market.
The ACE market is designed for companies with growth prospects while LEAP provides emerging small and mid-sized companies with greater fundraising access.
These IPOs provide investors with a wide range of different businesses to choose from.
For example, investors can also invest in airports and plantations in Malaysia, unlike in the Singapore stock market.
The wide breadth of companies gives you many more options to build and grow your portfolio as you prepare for retirement.
Large population with buoyant consumer sentiment
Malaysia also has a much larger population than Singapore, which translates to a larger population of consumers.
Last year, Malaysia’s population was estimated at 34.1 million, registering a 1.9% year-on-year growth.
This number is nearly six times higher than Singapore’s population of six million as of June 2024.
Meanwhile, market research firm Ipsos reported that Malaysia’s Consumer Confidence Index increased by 4% in January 2025 compared to the same period last year.
This 4% exceeds the global average and can be attributed to positive economic growth and stable inflation.
With such a large population and high consumer demand, there are many opportunities to buy businesses that rely on domestic consumption.
Well-known brands
Malaysian companies may trade on a different exchange, but many of their businesses are brands and names that should be familiar to you.
There’s Dutch Lady Milk Industries (KLSE: 3026) which offers an extensive range of milk-based products ranging from fresh milk to yoghurt drinks.
You’ve probably seen Dutch Lady milk on the shelves in Singapore supermarkets but only in Malaysia can you own a slice of this dairy company.
Or perhaps you add umami seasoning and monosodium glutamate to the food that you cook.
Ajinomoto Malaysia (KLSE: 2658) allows you to own a slice of the business that manufactures and sells food seasoning products.
There are other well-known brands whose shares you can find on the Malaysian stock exchange such as Carlsberg Brewery Malaysia (KLSE: 2836), thereby giving you a chance to own a slice of the familiar brands that you encounter daily.
Get Smart: Dividends galore
From the above, it’s clear that Malaysia has a lot to offer.
The booming bourse offers a plethora of choices for investors who are seeking to diversify their portfolios.
But there’s even better news.
The stocks mentioned above also pay out a dividend to boot, which is a requirement that David has for all the stocks he owns.
Yes, every stock that David buys needs to pay out part of their earnings as dividends.
It’s his way of ensuring that he can enjoy an increasing stream of passive income flowing straight into his bank account.
So can you, too.
Ready to discover the next $100 billion stock? Our newest FREE report dives deep into five popular SGX companies that many say are the next big thing. Read our team’s findings to guide your investment strategy. Click the link here to download now.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclosure: Royston Yang does not own shares in any of the companies mentioned.
