The Bursa Malaysia Energy Index is a benchmark that, as expected, reflects the performance of companies operating in the energy sector on Bursa Malaysia.
The index encompasses firms engaged in various segments of the energy industry, including oil and gas exploration, production, refining, distribution, and, increasingly, renewable energy initiatives. It provides investors with a concentrated view of Malaysia’s energy market.
As one of the core sectors in Malaysia, it offers insights into how global oil price movements, domestic policy, and technological advancements in renewables affect market performance. Established in 2014, the index is rebalanced quarterly—in March, June, September, and December—to ensure it remains reflective of current market conditions and industry trends.
Bursa Malaysia Energy Index Performance
While 2024 started well for the index, adding to the slight gains made in 2023, it declined from June onwards. That decline has continued into 2025, with the index now down 3.9% for the year-to-date (as of February 18). As you can see below, the performance over the last 12 months has been lacklustre.
| Period | Performance (as of Q1 2025) |
|---|---|
| 1-Year Performance | -11.86% |
Bursa Malaysia Energy Index Top 5 Companies
The index is reviewed quarterly in March, June, September, and December.
| Company | Market Cap |
|---|---|
| Dialog Group | MYR 9.15 Billion |
| Yinson Holdings | MYR 6.93 Billion |
| Bumi Armada Berhad | MYR 3.56 Billion |
| Dayang Enterprise | MYR 2.35 Billion |
| Keyfield International | MYR 1.79 Billion |
Malaysia Energy Stocks Forecast
The Bull Argument: According to a recent note from Maybank Investment Bank, the renewable energy sector outlook in Malaysia remains robust. They reportedly highlighted earnings recognition for engineering, procurement, construction, and commissioning (EPCC) works on the 800MW Corporate Green Power Program (CGPP) projects, which are expected to be completed by the end of 2025.
Overall the outlook for the sector is expected to be solid, with rising global demand for both traditional fossil fuels and renewable energy solutions having the potential to drive growth. Increased investments in green technology and infrastructure, along with strategic government support, are expected to boost the performance of leading energy companies in Malaysia. Moreover, stability in oil prices and strong export fundamentals are anticipated to enhance profitability for the sector’s core players.
The Bear Argument: Nevertheless, it is important to be mindful that the energy sector remains sensitive to external shocks. Fluctuations in global oil prices, geopolitical tensions, and potential tightening of fiscal policies could adversely affect earnings. Rising operational costs and the challenges associated with transitioning from fossil fuels to renewable sources also present risks. Investors should note that regulatory shifts or economic downturns could lead to periods of heightened volatility within the sector.
Our View: While it is exposed to the inherent risks of the commodity markets and potential regulatory changes, its diversity—including both traditional and emerging energy companies—helps balance these challenges. The sector’s long-term fundamentals, driven by consistent demand for energy and strategic investments in renewables, make it a promising option for those looking to diversify their portfolio with energy exposure. Recently, the Malaysian PM said the country wants to leverage its location to become an energy (and chip manufacturing) hub, which should result in investment in the sector.
Even so, investors should remain aware of the cyclical nature of the industry and be prepared for short-term volatility, but for those with a long-term perspective, the Malaysian energy market may have potential.
Who Should Invest in Malaysian Energy Stocks
While the options for exposure to Malaysian energy stocks are limited, investors may want to assess some of the individual stocks. Alternatively, the iShares MSCI Malaysia ETF has a 1.14% weighting in energy stocks. Overall, the sector is particularly appealing to:
Growth Investors: Those seeking to capitalise on rising energy demand and the shift towards renewable energy in Malaysia.
Dividend-Focused Investors: Companies in the energy sector often provide attractive dividend yields, offering a consistent income stream.
Malaysia-Focused Investors: Investors aiming to diversify their portfolios with exposure to Malaysia’s energy sector and its unique market dynamics will find this index beneficial.
