Top Financial News of 2024: Key Developments Shaping Malaysia’s Economic Landscape
As 2024 draws to a close, Malaysia’s financial sector has witnessed significant developments that have captured the attention of investors, policymakers, and the wider public. From a remarkable recovery in equities and currency performance to high-profile corporate maneuvers and strategic national resource debates, here is a comprehensive look at the top financial news that defined the year.
- Malaysian Equities and Ringgit’s Remarkable Rally
Malaysia’s stock market and currency experienced their best performance in years, reflecting renewed investor confidence and improving economic fundamentals. After enduring extended political uncertainties in previous years, 2024 saw the FBM KLCI (FTSE Bursa Malaysia Kuala Lumpur Composite Index) soar by an impressive 12.58%, marking its best annual gain since 2010. May was a landmark month when the market capitalization of Malaysian stocks eclipsed the RM2 trillion mark for the first time. Strong corporate earnings, increasing foreign capital inflows, and optimistic trade figures contributed to this upswing. Key drivers behind the surge included major players like YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd. The benchmark index traded at a forward price-to-earnings ratio (PER) of 15.7 times by year-end, exceeding the three-year average of 14.3 times.
The Malaysian ringgit strengthened notably as well, reaching an intra-year peak of 4.124 against the US dollar in September—an 11.4% increase—which later stabilized to close the year at 4.472, still up 2.84% year-to-date. The Central Bank of Malaysia (Bank Negara Malaysia) played a role by encouraging domestic businesses to repatriate overseas investments and convert export proceeds into ringgit, further supporting the currency’s resilience.
The year did experience volatility early on, particularly when stocks associated with investor Datuk Dr Yu Kuan Chon saw drastic declines, prompting tighter margin financing rules and a short-term selloff that affected smaller stocks. However, the broader market remained largely unshaken, setting the stage for the impressive rebound.
- Malaysia Airports Holdings Bhd (MAHB) Privatisation Sparks Debate
In a move that stirred controversy, Malaysia Airports Holdings Bhd announced a privatization offer in May, following a 35-year extension of its airport management concession that stretches to 2069. The offer of RM11 per share came from a consortium led by government-linked entities Khazanah Nasional Bhd and the Employees Provident Fund (EPF), joined by Global Infrastructure Partners (GIP) and the Abu Dhabi Investment Authority (ADIA).
This deal elevated Khazanah’s stake to 40% and EPF’s to 30%, with ADIA and GIP holding the remaining 30%. The government maintained special share rights in MAHB.
Concerns arose due to GIP’s association with BlackRock—whose acquisition of GIP was finalized in October—and allegations linking BlackRock to political controversies, leading to public protests. The government, however, defended the privatization as a strategy to unlock MAHB’s full growth potential.
Just before year-end, MAHB’s five independent directors advised shareholders against accepting the offer, citing that it undervalued the company relative to its growth prospects. This was in opposition to the recommendation by independent adviser Hong Leong Investment Bank, which suggested that, despite the offer being below estimated fair value, shareholders should accept due to the company’s extended share price suppression.
The consortium maintained its offer, emphasizing the historical performance and challenges MAHB faces.
- U Mobile Gains 5G Leadership Amid Ownership Transparency Concerns
In November, U Mobile Sdn Bhd was selected by the Malaysian Communications and Multimedia Commission (MCMC) to spearhead Malaysia’s second 5G network rollout. The decision surprised industry watchers, given U Mobile’s smaller scale compared to its competitors, sparking intense discussions about the selection process.
A central concern was the significant stake held by Singapore’s state-owned investment firm Temasek, which owns 48.25% of U Mobile through its wholly-owned subsidiary ST Telemedia. Questions about foreign ownership caps (set at 49% for telcos in Malaysia) surfaced, especially after ST Telemedia announced plans to reduce its stake to 20% by transferring majority ownership to Mawar Setia, an entity linked to Malaysian tycoon Tan Sri Vincent Tan and royal family member Tunku Tun Aminah Sultan Ibrahim.
Clarifications indicated that Mawar Setia would hold approximately 51%, but Temasek retained “certain instruments” convertible into shares, potentially raising foreign effective ownership stakes up to 71%. ST Telemedia maintained that all shareholdings were compliant with company disclosures, though the controversy highlighted ongoing concerns surrounding foreign influence in critical national telecommunications infrastructure.
- Sarawak’s Push for Greater Gas Control Stokes National Debate
2024 saw intensified efforts by Sarawak state to gain more control over its substantial natural gas resources, which account for 60% of Malaysia’s reserves. The contention centers around the role of Petroleum Sarawak Bhd (Petros) as the aggregator responsible for managing gas supply and distribution in the state—a role currently held by national oil corporation Petronas.
The Distribution of Gas Ordinance 2016 legally mandates the gas aggregator’s duties to develop and manage the gas network within Sarawak. State leadership, notably Chief Minister Abang Johari, emphasized the desire to leverage affordable gas for regional development.
This shift has triggered debate over the impact on Petronas and federal revenues, given Petronas’ significant contribution to national income through dividends. Petronas’ gas segment accounted for 37% of its RM81 billion profit in 2023, with RM40 billion dividends paid to the government the same year.
Prime Minister Datuk Seri Anwar Ibrahim underscored that Petros would not have unilateral control over gas supply and distribution decisions. As negotiations continue, stakeholders are carefully watching the implications for Malaysia’s oil and gas ecosystem, particularly regarding future investments and cooperation between federal and state governments.
- Public Bank’s Acquisition of LPI Capital and Teh Family’s Reduction Plans
In a major corporate transaction, Public Bank Bhd announced in October that it would acquire the entire 44.15% stake held by the family of its late founder, Tan Sri Teh Hong Piow, in insurer LPI Capital Bhd for RM1.72 billion (RM9.80 per share). This marked Public Bank’s most significant merger and acquisition since its 2021 purchase of Hock Hua Bank Bhd.
Following the acquisition, Public Bank launched a mandatory takeover offer for the remaining LPI shares, with the deal finalized in early December and the offer still open.
Concurrently, Diona Teh Li Shian, the late founder’s youngest daughter, revealed plans for the Teh family to pare down their stake in Public Bank from 23.41% to 10% over five years. This aligns with regulatory requirements under the Financial Services Act 2013, which restricts individual ownership in financial institutions to 10%. After the reduction, the family would remain the bank’s second-largest shareholder behind the Employees Provident Fund (EPF), which held 14.8% as of mid-December.
These key stories reflect a dynamic year in Malaysia’s financial and corporate arenas, illustrating shifts in market sentiment, strategic government initiatives, evolving regulatory landscapes, and emerging challenges within national infrastructure and resources. As the country moves into 2025, stakeholders remain vigilant about the implications of these developments for Malaysia’s economic growth and stability.