The Bursa Malaysia Healthcare Index is a specialised benchmark that tracks the performance of companies within the healthcare sector listed on Bursa Malaysia. This index covers businesses involved in pharmaceuticals, biotechnology, medical devices, healthcare services, and life sciences, providing a sweeping view of Malaysia’s healthcare landscape.
Healthcare companies are critical to the economy as they drive innovation in medical treatment and contribute to overall public health. With demand for quality healthcare services remaining robust regardless of economic fluctuations, this sector is generally considered defensive.
The index, which comprises around 18 constituents, has a market cap of MYR 94.07 billion.
Bursa Malaysia Healthcare Index Performance
After surging during the early stages of the COVID-19 pandemic, the index retreated sharply before launching somewhat of a turnaround in late 20222. Since then, the index has gradually moved higher. However, it is still significantly below its August 2020 highs, and in early 2025, it has pulled back significantly, down 14.9% for the year to date (as of February 23).
| Period | Performance (as of February 2025) |
|---|---|
| 1-Year Performance | +3.19% |
Bursa Malaysia Healthcare Index Top 5 Companies
The index is reviewed quarterly in March, June, September, and December.
| Company | Market Cap (As of August 2024) |
|---|---|
| IHH Healthcare | MYR 63.99 Billion |
| KPJ Healthcare | MYR 11.50 Billion |
| Hartalega Holdings | MYR 8.50 Billion |
| Top Glove Corporation | MYR 7.89 Billion |
| Kossan Rubber Industries | MYR 4.89 Billion |
Malaysia Healthcare Stocks Forecast
The Bull Argument: An article from The Edge Malaysia in December 2024 noted that the uncertainty regarding the implementation of the diagnostic-related group (DRG) payment system, which the Malaysian Ministry of Health intends to introduce in the private healthcare sector, “has done little to change analysts’ outlook” on hospital operators listed on the Bursa Malaysia. The article says that analysts “believe in the healthcare groups’ resilient long-term growth potential, with the possibility of higher valuations driven by new listings.”
“We believe the DRG-related regulatory overhang could gradually subside after stakeholders engage in more in-depth discussions and cost-benefit analyses,” HLIB Research reportedly said in a December 19 note. The firm has an “overweight” rating on the healthcare sector.
Taking a broader view of the sector, investors will note the enduring demand for medical services and the potential for breakthrough innovations in biotechnology and medical devices. With an aging population and increasing health awareness, companies in the sector are expected to benefit from a sustained rise in healthcare expenditure.
The Bear Argument: On the other hand, bearish investors may believe that the healthcare industry in Malaysia faces challenges such as regulatory uncertainties and pricing pressures. Investors may also want to assess the impact of the incoming DRG payment system mentioned above. Elsewhere, delays in clinical trial outcomes and rising operational costs may impede margins. Moreover, potential policy shifts could lead to periods of volatility in the sector.
Our View: We should note that an article from International Citizens Insurance recently stated that “Malaysia’s healthcare system is fast becoming one of the leading healthcare providers in Asia.” With its mix of pharmaceutical companies, healthcare providers, and biotech firms, the sector, for investors, represents the potential for growth and stability. Although regulatory risks remain, the long-term fundamentals of the healthcare sector—driven by demographic trends and technological advances—are solid.
Who Should Invest in Malaysian Healthcare Stocks
While Malaysia-focused ETFs are limited, the iShares MSCI Malaysia ETF has a 3.18% weighting in healthcare stocks. Other ETFs, such as the Global X FTSE Southeast Asia ETF, also have a slight weighting to healthcare stocks, although, at the time of writing, we could only see one Malaysian healthcare name included.
Nevertheless, the sector is suited for investors with a variety of objectives, including:
Income-Focused Investors: Many healthcare companies consistently pay dividends, providing a reliable income stream.
Defensive Investors: The stable demand for healthcare services makes the sector less sensitive to economic downturns.
Long-Term Growth Investors: Given the ongoing advancements in medical technology and increasing health expenditure, the industry offers prospects for long-term capital appreciation.
