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There seems to a heavy interest in Malaysian ADR stocks among US investors. Due to this high demand, I am devoting this post to major listed Malaysia ADR stocks. This Malaysia ADR list will help investors analyze the various options available to invest in Malaysia.

There are a total of 10 Malaysian stocks trading in the US that are “Sponsored”.All are listed in the OTC exchange. None of them are listed in the NYSE, Nasdaq or Amex exchanges. So these stocks may be subject to liquidity risk.

The following are the Malaysian ADR stocks listed in the OTC exchange and have price per share of above $5 and are traded daily:

1. Genting - GEBHY.pk
2. Malayan Banking - MLYBY.pk
3. Resorts World - RSWSY.pk
4. Tenaga Nasional - TNABY.pk
5. Kuala Lumpur Kepong - KLKSY.pk

Other stocks that are available but are very illiquid and very low priced are:

1. Top Glove - TGLVY.pk
2. SilverStone - SVTOY.pk
3. MBF Holdings - MBFBY.pk
4. Lion Industries - LICUY.pk
5. Amsteel Corp - AMSBY.pk

Stock Pick - Descriptions:

1&2) Genting & Resorts World: Genting & Resorts World are related to one another. Genting Highlands is a hill station near Kuala Lumpur. Genting means “Top of the Clouds” in Chinese. Being a hot tropical country people prefer to escape to the hills where the temperature is cool. Genting is holding company with interests in a lot of industries whereas Resorts World concentrates on hotels and the hospitality sector. Resorts World operates many hotels including the “First World Hotel” in Genting. This hotel is actually two towers comprising of over 6000 rooms (picture below).

The hotels are fully booked most of the time especially during the holidays and weekends. It has a theme park, water park and casinos. The casinos are a big draw with many tourists from nearby countries where they are illegal.On a recent visit to the hotel, I observed the whole place is crowded like crazy with thousands of people waiting on the lounge to check in. Quite a sight to see.

Considering the facts above Genting and Resorts World are very good picks to invest in. For more details on these companies checkout: http://www.genting.com.my/en/accommodation/index.asp

3)Kuala Lumpur Kepong:
Like so many other Malaysian companies, this one also operates in many industries and is listed in the Main Board of Bursa Malaysia. It has been in operation since 1906.

One of the main business of this company is in the plantation business - specifically Palm Oil plantations. In a typical plantation thousands of Palm trees are grown and then the palm seeds are crushed to make Palm oil. In many developing countries Palm oil is used in cooking instead of vegetable oil. Malaysia is the #1 exporter of Palm oil and this brings a few billion dollars in foreign exchange to the country. So this is another good Malaysian stock that you can invest in.

The company has a property development division which is successful as well.

More information can be found at their “Investor Relations” site here:
http://www.klk.com.my/ir_lp.htm

4)Tenaga Nasional:
It is the largest electric utility in Malaysia serving over seven million customers. The majority owner of this utility is the Malysian Government. Foreigners own 25% of the shares - the maximum limit possible by law.

Because of government control on power prices, after 12 years the company increased prices last year resulting in doubling of profit.

Please visit their IR site to learn more:
http://www.tnb.com.my/tnb/inv_highlights.jsp

5) Malayan Banking Berhad aka. May Bank:
May Bank is the largest bank in Malaysia.The bank operates in Malaysia as well as many Asian countries like China, Singapore,Cambodia,Vietnam, Hong Kong, Phillipines etc. It is the second largest listed in the Malaysian Stock Exchange - Bursa Malaysia. In 2006, the company had assets of US $64 Billion.

May Bank IR site:
http://www.maybank2u.com.my/corporate/financial_info.shtml

The best option to invest in Malaysia is thru the iShares Malaysia ETF: EWM

This fund has grown nicely over the years and has now an assets size of over $1.0B. The fund has a yield of 3.14% and an expense ration 0.51%.

Financials and Consumer Stocks constitue over 62% of EWM.
The fund has a total of 59 stocks and the four stocks described above (GEBHY.pk, RSWSY.pk, TNABY.pk and MLYBY.pk )
are in the top 10 stocks.

Detailed information on iShares Malaysia ETF can be found at:
http://www.ishares.com/product_info/fund/overview/EWM.htm

Related Links:
The Star Newspaper - http://biz.thestar.com.my

Kuala Lumpur Stock Exchange (KLSE) Stock Review Blog - http://klsestockreview.blogspot.com/

Cheers !!!!

written by David

For a detailed listing of Malaysian ADR Stocks, please visit:

http://adruniverse.blogspot.com/2008/01/malaysian-adr-stocks_12.html

Malaysia is one of the hot emerging market countries now.After the Asian financial crisis a few years, Malaysian government has implemented many market-friendly policies while at the same protecting the domestic currency and stock markets from adverse effects of foreign direct investment.

The infrastructure in Malaysia is very good when compared to other countries like India, China etc. The capital city of Kuala Lumpur (KL) has a neat Skytrain system that connects pretty much the whole city. The photo below shows one such train running thru downtown KL.

The people in Malaysia are conservative and save a lot of their income. The country has Malay, Chinese and Indian populations with the Malay and the Chinese forming the majority. Though the country is very close to Singapore, it is still a developing country while the city state of Singapore is a developed country. Malaysia is trying hard to become a developed nation.

Only the western part of Malaysia is well developed. The eastern part of the country is still very underdeveloped. The city of KL attracts huge capital inflows for may projects such as apartments, hotels, tourist related attractions etc. The city seems to expand constantly.

There is a major toll expressway that runs all the way from the north to the South connecting Singapore. This highway is well maintained and has made land travel within Malaysia much easier and faster.

There are a couple of options to invest in Malaysia:

One is the iShares Malaysia ETF - EWM.
This fund has grown nicely over the years and has now an assets size of over $1.0B.

Another option is to pick up a few of the Malaysian ADRs listed in the OTC market.

The following are the Malaysian ADRs listed in the US markets:

1. Genting - Travel and leisure - GEBHY.pk
2. Malayan Banking - Banks - MLYBY.pk
3. Resorts World - Part of Genting - RSWSY.pk
4. Tenaga Nasional - TNABY.pk

There a few well-run companies in that list such as the Genting and Resorts World. Both run the Genting resort and the many hotels within it. This hillstation tourist spot attracts millions of tourists each year including many of Chinese from Mainland China visiting Malaysia for the first time.
The picture below shows the cable run that runs from the base of the mountain to the resort.
This cable car seems to one of the fastest and longest in the world.

Some other companies available in the OTC are electric utility Tenega Nasional the banking group of Malayan Banking. In general Malaysia ADRs are very few to choose from.

Malaysia used to be a big producer of Rubber. Many years ago that changed. Now Palm Oil is the major commodity in Malaysia. Many of the old rubber plantations have been converted to grow Palm trees.

Malaysia has a few disadvantages as well.The country failed to launch and become a leader in the IT and other “knowledge” based industry due to many reasons. The spectacular “Petronas Towers” were actually built to launch an IT park where IT companies would set up shop and engage in all things IT. However that effort failed and now those towers are occupied by multinational corporations in addition to Petronas.

However Malaysia has succeeded in the electronics manufacturing space. All kinds of electronic items such as computer chips, watches etc. are now assembled in Malaysia. Malaysians are proud of this sector’s achievement.

For the foreseeable future, commodities such as Palm Oil, Rubber and tourism industry will remain the key engines of the Malaysian economy.

written by David

“Terima Kasih” means “Thank you” in Malay language.

iShares has the EWM ETF for Malaysia. It has assets of just over $1B and is up over 30% YTD this year - a fantastic performance when compared to the US markets.

Not many stocks of Malaysian firms trade in the US.However Malaysia is a stable, high growth developing country. More detailed research on Malaysia will be posted here in a week or two.

Photo: Petronas Twin Towers in Kuala Lumpur (KL), Malaysia.
Petronas is the state-owned national oil company of Malaysia.No wonder they were able to build this awesome skyscraper.:-)

- David

written by David