SINGAPORE (Dec 11): While investors may be caught up in the rally of heavyweight stocks in the property, technology and banking sectors, they should not ignore opportunities in the small-cap space. “Small-cap stocks are not researched that well and are not that well known publicly. But savvy investors will know that they [have] tremendous potential, in terms of offering alpha to investors’ portfolios. They often have a reasonably attractive track record and the potential to grow into big-cap companies,” says Arup Raha, group head of research at RHB Research Institute.
At the SGX-RHB “Undiscovered Gems” Corporate Day on Dec 6, RHB presented five small-cap stocks that it believes fit the bill. Among them are Indonesian water treatment company Moya Holdings Asia, local real estate brokerage APAC Realty and regional recruitment firm HRnetGroup. The other two companies, on which RHB has not yet initiated coverage, are manufacturer Jackspeed Corp and precision engineering and oil and gas (O&G) company GSS Energy. “We hope that these companies will graduate to mid-cap and, along the way, even large-cap companies,” Raha says.