Did the ROE of you company dropped by more than half?

[i4value]

If you want to know how tough the current economic situation is, just look at the distribution of the ROE for the Bursa Malaysia companies. 

• In May 2014, the median ROE was 6.3 %. In Aug 2023, it was 3.8 %
  
• In 2023 the distribution was skewed towards less than 0%. In 2014, the distribution was not so skewed.
  

Moral of the story? If the ROE of your company had dropped by about 2/3 when comparing 2023 with that a decade ago, there is no need to panic.

Nevertheless if I was a fundamental investor, I would dig deeper to make sure that this is merely a temporary decline and not one due to secular trends or digital disruption.

If you want to know more about how to do this go to “Do you really want to master value investing?

[donmihaihai]

So do you know what causes Bursa Malaysia companies to generate lower ROE over the years?

[i4value]

So do you know what causes Bursa Malaysia companies to generate lower ROE over the years?

I think Covid-19 has a lot to do with the 2021/22 performance thereby affective the ROE reported in 2023

[donmihaihai]

So do you know what causes Bursa Malaysia companies to generate lower ROE over the years?

I think Covid-19 has a lot to do with the 2021/22 performance thereby affective the ROE reported in 2023

Sound good. Covid gone. ROE back up and valuation in general is cheaper compared to 2014. All factors are aligned.

[i4value]

So do you know what causes Bursa Malaysia companies to generate lower ROE over the years?

I think Covid-19 has a lot to do with the 2021/22 performance thereby affective the ROE reported in 2023

Sound good. Covid gone. ROE back up and valuation in general is cheaper compared to 2014. All factors are aligned.

If it was so simple than every retail investor would be a millionaire. Not all companies are coming out of Covid stronger. Many have lost customers, etc. So you have to look at each company in detail. As an example, there were about 10 Best Western hotels in Malaysia going into Covid-19. Today only one is still operating under Best Western.