I Screened 1,103 Bursa Stocks. First Question: Can You Even Get In and Out Properly?

Most people talk about Bursa Malaysia like it is one market.

It isn’t.

If you buy stocks in Malaysia long enough, you eventually realise this the hard way: many counters may look cheap on paper, but they are not really investable in any serious sense. You can buy a little when things are calm. But when sentiment turns, or when you want to size up properly, liquidity suddenly matters.

So before talking about valuation, narratives, or “hidden gems”, I wanted to start with a more basic question:

Can you even get in and out properly?

That is where serious investing starts.

The real investable universe is much smaller than it looks

We screened all 1,103 traded stocks on Bursa Malaysia. Not a sample. Every listed counter in the market snapshot used for this screen.

Then we applied the most basic filter of all: liquidity.

In our screen, only about 300 stocks averaged at least RM750,000 in daily traded value. In other words, more than 70% of Bursa falls away before you even begin deeper work on fundamentals.

That matters more than many retail investors think.

A stock can look statistically cheap. It can have a low PE, a decent story, maybe even a convincing annual report. But if liquidity is weak, your experience as a shareholder becomes very different from what the spreadsheet suggests. Entering takes time. Exiting gets painful. Small waves of selling move the price hard. What looks fine on paper can become very expensive in real life.

This is why liquidity should come before stock-picking.

Not after.

The brutal reality: durable compounders are rare

Once you focus only on the more liquid part of Bursa, the market becomes clearer.

And harsher.

Within that roughly 300-stock investable universe, only 10 stocks passed a screen for what we call durable compounders: businesses with ROE above 20%, positive free cash flow for the last 5 years, and 5-year EBIT CAGR of at least 10%.

That is about 3% of the liquid universe. Or looked at another way: roughly 1 in 30 liquid stocks. Across the full market, it is less than 1 in 100 listed names.

That should reset expectations for anyone approaching Bursa casually.

If your goal is to own high-quality businesses for the long term, you are not fishing in a wide lake. You are fishing in a very small pond.

This is why long-term investing feels hard. True compounders are rare everywhere, but in Bursa they are even rarer once you insist on both business quality and tradability.

So when people act as if good long-term stocks are everywhere, they are usually skipping the hard part.

The market has more traps than compounders

This is also where the picture gets interesting.

The screen found only 9 deep value stocks trading below 5x earnings within the liquid universe. It found 30 massive diluters — companies that grew common equity by around 20% compounded over 5 years while delivering ROE below 10%. It also found 13 financially fragile names with net debt / EBITDA above 4x and negative cash flow in 3 or more of the last 5 years.

That means the market, at least on this snapshot, contains three times as many massive diluters as durable compounders.

That is the kind of framing retail investors need.

Because many people enter the market assuming the main challenge is “finding undervalued stocks.” But often the first challenge is much simpler: avoiding low-quality names that destroy shareholder value slowly and repeatedly.

Some stocks dilute you.
Some trap you with poor liquidity.
Some are cheap for reasons that only become obvious later.
Some survive on refinancing, hope, and another fundraising round.

That is market structure. And if you ignore it, you are already making life harder for yourself.

What this means for the everyday Bursa investor

If you already buy Bursa stocks, the lesson here is not that you should only own the 10 compounders.

The lesson is that your starting universe matters.

A lot of noise in the market comes from looking at everything equally — hot tips, low-PE names, turnaround stories, penny stocks, thematic excitement — without first narrowing the field to businesses and counters that are actually worth your attention.

That is what serious screening is for.

Not to make decisions for you.

But to stop you wasting time on the wrong part of the market.

Because in Bursa, attention is scarce too. If only about 300 names are meaningfully tradeable by this screen, and only 10 look like durable compounders, then discipline is not optional. It is the whole game.

The point of Sang Tikam

Sang Tikam is built for investors who want to think longer term and filter out market noise.

That starts by seeing Bursa for what it is:

• not one market, but many
• not 1,103 equal opportunities, but a much smaller investable core
• not a place where quality is common, but one where true compounders are rare

If you understand that, you already have an edge over investors who jump straight from headline to headline, or from one stock tip to the next.

Because better investing does not start with certainty.

It starts with knowing where not to look.

Method note

This screen used all 1,103 traded Bursa stocks in the article’s snapshot, with liquidity defined as average daily traded value of at least RM750,000. Financial screens were based on the most recent 5 years of reported data at the time of publication. Screen counts are point-in-time and will change as companies report new results.

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