Top Financial Stories of 2024: Malaysia’s Market Surge, Strategic Deals, and Emerging Tech Hub
As 2024 draws to a close, Malaysia’s financial landscape has witnessed remarkable developments across several sectors, reflecting a year of resilience, strategic shifts, and growth prospects. Here’s a detailed roundup of the top financial news shaping the nation’s economy and markets.
- Malaysian Equities and Ringgit Rebound to Multi-Year Highs
After enduring years of political uncertainties that clouded economic outlooks, Malaysia’s stock market staged a stunning comeback in 2024. The FTSE Bursa Malaysia KLCI (FBM KLCI) index recorded an impressive gain of 12.58%, its strongest annual performance since 2010, shedding its earlier reputation as “the world’s worst major market” in 2019. The market rally was underpinned by a combination of robust corporate earnings, revived foreign investor inflows, and encouraging economic data, particularly from trade figures. This growth momentum lifted the market capitalization of Malaysian equities to surpass the RM2 trillion milestone for the first time in history by May 2024. Key contributors to this upswing included blue-chip companies like YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd. Valuations rose to a forward price-to-earnings ratio (PER) of 15.7 times, higher than the three-year average of 14.3 times as of December 2023. The ringgit also experienced notable strength, appreciating up to 11.4% against the US dollar to reach a high of 4.124 in September. Although gains moderated towards year-end, the currency remained 2.84% stronger year-to-date. Supportive measures from Bank Negara Malaysia, including urging businesses to repatriate foreign earnings and convert export proceeds back to ringgit, contributed to this positive trend.
Despite a rocky start marked by sharp declines in stocks linked to investor Datuk Dr Yu Kuan Chon, which caused temporary market shocks, the broader index remained resilient and quickly stabilized, setting the stage for a stellar year’s performance.
- Controversial Privatisation Bid for Malaysia Airports Holdings
Malaysia Airports Holdings Bhd (MAHB), the company managing 39 airports nationwide, found itself at the center of a contentious privatization proposal in 2024. Following a 35-year extension to its concession agreement granted in March, a consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF) unveiled an RM11 per share offer in May to take the company private.
The consortium includes other key partners, Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA). Under the deal, Khazanah’s stake would increase to 40%, and EPF’s to 30%, with government special share rights retained.
However, the plan faced public protests primarily due to GIP’s connection to BlackRock, an asset management giant accused by some critics of controversial geopolitical associations. BlackRock’s acquisition of GIP in October intensified scrutiny.
MAHB’s independent directors advised shareholders against accepting the privatization offer, highlighting potential undervaluation and untapped growth potential. In contrast, Hong Leong Investment Bank, acting as an independent adviser, recommended acceptance based on MAHB’s subdued share price but acknowledged the offer undervalued the company.
The consortium, nonetheless, maintained its RM11 offer, emphasizing challenges ahead and past performance factors not fully considered by the independent directors.
- U Mobile’s Lead Role in Malaysia’s 5G Network Sparks Shareholding Debate
November’s announcement by the Malaysian Communications and Multimedia Commission (MCMC) selecting U Mobile Sdn Bhd to spearhead the nation’s second 5G network rollout stirred significant industry debate. The decision surprised market observers, who expected larger operators to secure the project.
MCMC justified the selection citing U Mobile’s proven track record, but concerns arose over transparency. Further controversy centered on foreign ownership, as Singapore’s state-owned Temasek holds a significant 48.25% stake in U Mobile through its affiliates.
Subsequent plans by Temasek’s subsidiary, ST Telemedia, to reduce its stake in U Mobile to 20% via a majority sale to Mawar Setia — a company linked to prominent Malaysian figures — added complexity. The ambiguity over foreign ownership caps in Malaysian telecommunications companies, set at 49%, provoked further scrutiny.
Sources suggested Temasek’s effective control in U Mobile could be as high as 71%, raising regulatory questions. ST Telemedia maintained its holdings aligned with company disclosures submitted to local regulators, keeping the issue under watch.
- Sarawak’s Quest for Greater Control Over Gas Resources Creates Industry Tension
Sarawak, home to 60% of Malaysia’s natural gas reserves, intensified efforts in 2024 to gain more influence over its valuable gas supplies. The state aims for Petroleum Sarawak Bhd (Petros) to serve as the gas aggregator managing supply and distribution within Sarawak, challenging the longstanding role of Petronas, the national oil company.
The move ignited complex debates regarding state-federal relations, economic ramifications for Petronas, and broader implications for Malaysia’s oil and gas sector. Sarawak’s oil and gas revenues surged to over RM6 billion in 2023, reflecting higher compensation fees and tax inclusions, while Petronas’s gas segment contributed significantly to its RM81 billion profit and RM40 billion dividend payout to the federal government.
Prime Minister Datuk Seri Anwar Ibrahim acknowledged that neither federal nor Sarawak leadership intends for Petros to have unilateral control over gas distribution, underscoring the need for balanced dialogue. The resolution of this impasse remains crucial to securing the region’s energy landscape and future investments.
- Teh Family’s Strategic Exit From LPI Capital and Public Bank Shareholding Reduction
In a landmark transaction, Public Bank Bhd acquired the full 44.15% stake held by the family of the late founder Tan Sri Teh Hong Piow in LPI Capital Bhd for RM1.72 billion. The move, announced in October and finalized by early December, represents Public Bank’s most significant merger and acquisition effort since its purchase of Hock Hua Bank in 2021. Diona Teh Li Shian, the youngest daughter of Tan Sri Hong Piow, revealed the family’s plan to gradually reduce its shareholding in Public Bank from 23.41% to 10% within five years. This move aligns with the Financial Services Act 2013’s limit on individual ownership stakes in financial institutions.
Once reduced, the family would remain a major shareholder but cede the top position to the Employees Provident Fund (EPF), which holds 14.8% of Public Bank’s shares. At year-end, Public Bank’s share price hovered around RM4.57, valuing the family’s holdings at over RM20 billion.
- Data Centre Investments Surge Past RM75 Billion, Establishing Malaysia as a Regional Tech Hub
Malaysia has emerged as a major destination for data centre investments in 2024, attracting commitments exceeding RM75 billion from global technology giants including Amazon Web Services Inc (AWS), Microsoft Corp, and Google. This surge is sparking a flurry of land acquisitions and development activity, positioning the country as a critical data and cloud infrastructure hub in Southeast Asia.
This expansion reflects Malaysia’s growing appeal due to strategic location, supportive policies, and robust digital infrastructure development, promising longer-term benefits for the economy and technology ecosystem.
Looking Ahead
The varied developments throughout 2024 illustrate Malaysia’s dynamic financial and economic environment marked by recovery, major corporate strategies, regulatory challenges, and technological advancement. Stakeholders from investors to policymakers will closely monitor ongoing debates around privatizations, foreign ownership, resource management, and digital infrastructure as the nation charts its growth course in the coming years.
Stay tuned to Smart Money Mindset for continuous updates and expert insights on Malaysia’s evolving financial landscape.