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Malaysia’s penny stocks

Which penny stocks are listed on Bursa Malaysia and should you invest?

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The term penny stocks is more commonly used overseas in the US, UK or Europe, but you could have also heard the phrase in Malaysia too. So what are they?

What are penny stocks?

Penny stocks is a loose name for cheap, low-priced stocks of small, often newly listed companies. There are a few different ways to define Malaysia’s penny stocks. Some definitions say it’s listed companies with a market cap of less than RM200 million, which is why in Malaysia penny stocks are also commonly referred to as small-cap stocks.

Another definition is stocks with a price of less than RM1. However, this is also a rather vague definition as some penny stocks have prices that go way higher than RM1.

Investors are often attracted to penny stocks for their cheap prices and potential growth opportunities, though there are risks involved with penny stocks, too.

How to identify penny stocks?

Some of the typical characteristics of a penny stock include:

    • Small company
    • Market cap below RM200 million
    • Newer company recently listed
    • Stock price below RM1
    • Limited financial track record
    • Doesn’t pay dividends

List of Malaysia’s penny stocks

Company nameStock nameCurrent market price (in RM)Market cap (in RM million)Sector
Ahmad Zaki Resources BhdAZRB0.235140.50Construction
Amcorp Properties BhdAMPROP0.8901,112.49Property
Deleum BhdDELEUM0.530289.80Energy
Fajarbaru Builder Group BhdFAJAR0.71537.63Construction
Favelle Favco BhdFAVCO2.190132.04Industrial Products & Services
Hong Leong Industries BhdHLIND9.330245.99Consumer Products & Services
I-BerhadIBHD0.275103.20Property
Kimlun Corp. BhdKIMLUN0.825429.50Construction
Kumpulan Fima BhdKFIMA2.090793.65Industrial Products & Services
Malaysia Smelting Corp. BhdMSC2.100906.84Industrial Products & Services
Muhibbah Engineering (M) BhdMUHIBAH0.910263.93Construction
Pantech Group Holdings BhdPANTECH0.50564.31Industrial Products & Services
Scicom (MSC) BhdSCICOM1.110394.55Industrial Products & Services
SEG International BhdSEG0.635802.99Consumer Products & Services
Star Media Group BhdSTAR0.360265.88Telecommunications & Media
Syarikat Takaful Malaysia Keluarga BhdTAKAFUL4.3203,609.88Financial Services
Tambun Indah Land BhdTAMBUN0.660286.86Property
TRC Synergy BhdTRC0.350168.17Construction
Tune Protect Group BhdTUNEPRO0.405304.46Financial Services
UEM Edgenta BhdEDGENTA1.640146.09Industrial Products & Services

Note: These are some examples of Malaysian penny stocks listed on Bursa Malaysia. This list is not an exhaustive list nor is it a recommendation for any of the stocks mentioned. The current market prices are updated as of 19 July 2021.

Pros and cons of penny stocks

Here are some of the benefits and risks of investing in small-cap Malaysian penny stocks:

Pros

  • Low prices. Because they’re low priced, investors can hold a diversified portfolio of penny stock companies without needing to spend as much as they typically would.
  • Growth opportunity. Small-cap, newly listed companies can often present great growth opportunities if you pick the right ones. However it could be a bumpy ride to the top.
  • Thrilling. Penny stocks often see their stock prices change significantly in little time, which can be exciting and thrilling for investors with a high risk tolerance.
  • Day trading. Because of their large price swings, penny stocks are often used by active day traders.

Cons

  • High risk. Penny stocks are very high-risk investments compared to other listed companies and ETFs with a longer financial track record. Not all companies that list on an exchange do well and a lot of penny stocks never become anything more than a penny stock.
  • Very volatile. Penny stocks often experience extreme stock price highs and lows within a matter of days (or even within the same day).
  • No income. Penny stocks rarely pay any dividends, as all revenue is usually reinvested back into the company to help it grow.

Penny stocks versus blue chip stocks

On the opposite side of the scale to penny stocks are blue chip stocks. In comparison to penny stocks, blue chip stocks are large listed companies that have been around for a long time and have a long, stable financial track record.

Some of Malaysia’s biggest and most well-known companies are considered blue chip stocks, such as Malayan Banking Bhd (MAYBANK), TopGlove Corporation Bhd (TOPGLOV), Tenaga Nasional Bhd (TENAGA) and Petronas Chemicals Group Bhd (PCHEM).

While penny stocks in most cases pay no dividends, blue chips stocks almost always do.

Should you invest in penny stocks?

You could consider investing in penny stocks if:

  • You have a high risk tolerance
  • You’re an experienced investor
  • You’re willing to cut your losses if the stock price falls significantly
  • You have a long investment time frame and are willing to ride out the volatility
  • You’re happy to take a bit of a “gamble”

Tips for investors considering buying penny stocks

If you’re keen to invest in Malaysian penny stocks, here are some tips to help you get started.

Do your research

This is important for all investments, but particularly higher-risk investments like penny stocks. Blue chip stocks are, by their nature, lower-risk options as they’ve got a long history of strong financial performance.

Plan a strategy and stick to it

Before you start buying, decide which penny stocks you’re going to invest in and how much you’re going to invest in each one. It’s also important to decide what price you’d sell at if the stocks were to fall and stick to it to avoid the “I’ll just hold a little longer and see if the price jumps back up” mentality. The same applies for gains.

Don’t make emotional decisions

It can be easy to get emotionally attached to a penny stock, as they’re often the underdogs in your portfolio. So when their stock price falls and falls some more, you can find yourself making excuses as to why you should keep holding. This is why it’s important to make a strategy, so you leave the emotions out of it.

Don’t get sucked in by the “cheap” prices

Penny stocks may appear to be cheap in comparison to other stocks listed on Bursa Malaysia, but don’t base your investment decision purely on this. One factor that influences a company’s stock price is the demand for its stocks. The less demand from investors, the lower the stock price. So some penny stocks may appear to be cheap, but you need to ask yourself why this is.

How to buy penny stocks in Malaysia

  1. Choose an online broker. If you’re a beginner, our table below can help you choose.
  2. Open your CDS and trading account. You’ll need to provide your personal details, proof of ID and bank details.
  3. Confirm your payment details. You’ll need to fund your account with a bank transfer, cheque or cash deposit at branch.
  4. Find the stocks you want to buy. Search the platform and buy your stocks. It’s that simple.

Compare online brokers to buy penny stocks

Name Product Brokerage fee Interest on deposit? Intraday trade CDS fee
Zacks Trade
Zacks Trade
US$0.01
No
Yes
N/A
CFD Service. Your capital is at risk.
The Zachs Trade platform offers stocks, ETFs, bonds, options, and more with access to more than 90 exchanges worldwide
Alliance Bank Trading Account
Alliance Bank Trading Account
0.15% - 0.29%
Yes
Yes
N/A
CFD Service. Your capital is at risk.
Trade on-the-go and diversify your portfolio with a myriad of investment products, ranging from bonds to unit trusts.
CIMB Trading Account
CIMB Trading Account
0.22% - 0.45%
Yes
Yes
RM0
CFD Service. Your capital is at risk.
Access multiple stock exchanges,  exclusive research materials, real-time portfolio management, and other trading conveniences to grow your investments.
Hong Leong Trading Account
Hong Leong Trading Account
RM8 - 0.10%
Yes
Yes
RM10
CFD Service. Your capital is at risk.
Enjoy the flexibility of bursa trading and access global markets with a single platform.
Rakuten Trade Trading Account
Rakuten Trade Trading Account
RM7 - RM100
Yes
Yes
Free
CFD Service. Your capital is at risk.
Benefit from low fees and earn reward points when you trade on this all-in-one digital brokerage.
RHB Trading Account
RHB Trading Account
0.21% - 0.42%
Yes
Yes
RM10
CFD Service. Your capital is at risk.
Trade in futures, shares, and warrants across major foreign markets with Malaysia's largest investment bank.
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Compare up to 4 providers

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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