Top Financial News of 2024: Malaysia’s Market Resurgence, Controversies, and Strategic Moves
As 2024 draws to a close, Malaysia’s financial landscape has witnessed significant developments—from a robust equity rally to contentious privatization, telecom sector shake-ups, and critical natural resource debates. Here’s an in-depth look at the top financial stories shaping the country’s economic narrative this year.
- Malaysian Equities and Ringgit Staging the Best Run in Years
After years of political uncertainty dampening investor confidence, Malaysian markets rebounded impressively in 2024. The benchmark FBM KLCI index surged by 12.58%, marking its strongest annual gain since 2010. This rally pushed the total market capitalization beyond RM2 trillion for the first time in May, fueled by strong corporate earnings, renewed foreign investment, and optimistic economic data—including better-than-expected trade statistics.
Key drivers of the market’s success included heavyweights such as YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd. The FBM KLCI currently trades at a forward price-to-earnings ratio (PER) of 15.7 times, surpassing its three-year average of 14.3 times as of year-end.
The Malaysian ringgit also strengthened notably, appreciating up to 11.4% to an intra-year high of 4.124 against the US dollar in September, before easing somewhat to close the year up 2.84%. Contributing factors included improved economic fundamentals and Bank Negara Malaysia’s initiative urging Malaysian firms to repatriate overseas investment income and convert export proceeds back into ringgit.
Despite a rocky start with sharp declines in stocks linked to investor Datuk Dr Yu Kuan Chon triggering tighter margin financing rules and an 11% plunge in the FBM ACE Index within days, market stability returned by February, propelling a stellar year-end performance.
- Controversy Surrounds Malaysia Airports Holdings Berhad (MAHB) Privatization
In a dramatic move, Malaysia Airports Holdings Berhad (MAHB) secured a 35-year extension of its airport management concession in March, extending its mandate to 2069. Shortly after, a consortium comprising Khazanah Nasional Bhd, Employees Provident Fund (EPF), Global Infrastructure Partners (GIP), and Abu Dhabi Investment Authority (ADIA) made an RM11 per share offer to privatize the airport operator.
Khazanah’s stake would rise from 33.2% to 40%, EPF’s from 7.9% to 30%, with ADIA and GIP sharing the remaining 30%. The government would maintain special share rights. However, the move stirred controversy, especially due to GIP’s association with BlackRock, which some critics allege has pro-Zionist ties and complicity in the Palestinian conflict. BlackRock’s completion of its acquisition of GIP in October intensified the debate.
While the government defended the privatization as a strategic step to unlock MAHB’s growth potential, dissenting voices emerged. All five independent directors of MAHB recommended shareholders reject the offer, citing undervaluation relative to the company’s growth prospects. Contrarily, Hong Leong Investment Bank, acting as an independent adviser, endorsed acceptance, viewing the offer as reasonable given the extended suppressed share price, though it acknowledged the offer’s fair value estimate was higher (between RM12.61 and RM13.71 per share).
The consortium, however, maintained its RM11 offer, arguing the directors failed to adequately consider MAHB’s performance and future challenges.
- U Mobile’s Lead in 5G Deployment Sparks Foreign Ownership Concerns
November saw the Malaysian Communications and Multimedia Commission (MCMC) select U Mobile Sdn Bhd to spearhead the rollout of Malaysia’s second 5G network. U Mobile’s selection over larger competitors ignited discussions around process transparency and foreign ownership issues.
Significantly, Singapore’s sovereign wealth fund Temasek is U Mobile’s largest shareholder with a 48.25% stake via subsidiaries. This raised questions about foreign influence over Malaysia’s critical telecom infrastructure, noted the 49% foreign ownership cap applied to telecom companies.
Shortly after the announcement, ST Telemedia, linked to Temasek, declared plans to reduce its stake in U Mobile to 20% by selling a majority stake to Mawar Setia, a company associated with prominent Malaysian figures including tycoon Tan Sri Vincent Tan and the King’s daughter, Tunku Tun Aminah Sultan Ibrahim. However, this sparked confusion due to ambiguity about the exact percentage shareholding and whether foreign ownership limits were breached.
Reports suggest Temasek’s effective stake including convertible instruments could reach as high as 71%, provoking further scrutiny. ST Telemedia maintains its stake adheres to disclosure norms, but the issue remains under close observation.
- Sarawak’s Push for Greater Control Over Gas Resources
The state of Sarawak intensified efforts in 2024 to gain more control over its substantial natural gas reserves, which account for 60% of Malaysia’s total. The focus centered on appointing Petroleum Sarawak Bhd (Petros) as the exclusive gas aggregator, a role currently held by national oil company Petronas.
Gas aggregation involves procuring and distributing natural gas within the state, key to Sarawak’s vision of expanding affordable gas power usage. However, this proposal raised significant debate. Stakeholders expressed concerns about potential impacts on Petronas, whose gas segment comprises 37% of its RM81 billion profit in 2023 and generates substantial federal revenue via dividends nearing RM40 billion.
Prime Minister Datuk Seri Anwar Ibrahim clarified in December that neither federal nor state leaders view Petros as having unilateral control over gas supply decisions. Moving forward, federal and state authorities are working towards a resolution to balance Sarawak’s aspirations with Malaysia’s broader oil and gas ecosystem interests.
- Teh Family Sells LPI Capital Stake to Public Bank, Plans to Cut Bank Holdings
In October, Public Bank Bhd disclosed its intention to acquire the entire 44.15% stake in general insurer LPI Capital Bhd previously held by the family of the late founder, Tan Sri Teh Hong Piow. The RM1.72 billion deal, completed in early December, represents the bank’s first major merger and acquisition move since acquiring Hock Hua Bank in 2021. As part of the transaction disclosures, Diona Teh Li Shian indicated the family plans to reduce its Public Bank stakes from 23.41% to 10% over five years, aligning with regulatory limits under the Financial Services Act 2013. This reduction will be executed via a restricted share sale offering to employees, directors, and eligible shareholders.
Following these changes, the Teh family would become Public Bank’s second-largest shareholder behind the Employees Provident Fund (EPF), which owns 14.8%. Public Bank’s worth remains strong, with shares trading near RM4.57, valuing the Teh family’s current holdings at approximately RM20.77 billion.
- Over RM75 Billion Data Centre Investments Propel Malaysia’s Tech Hub Status
Malaysia has emerged as a regional hub for data centre development, attracting massive investments exceeding RM75 billion in 2024. Global technology giants including Amazon Web Services Inc (AWS), Microsoft Corp, and Google are at the forefront of this surge, fueling a sharp increase in data centre land deals nationwide.
This influx signals Malaysia’s growing importance in digital infrastructure within Southeast Asia, supporting expanding cloud computing demands and technological innovation.
Looking Ahead
Malaysia’s financial year 2024 was marked by a remarkable equity rally, strategic privatization debates, telecommunications sector upheaval, and pivotal shifts in natural resource governance. These developments reflect an economy navigating complex domestic and global challenges while positioning itself for sustained growth and modernization in the years ahead.
For investors and stakeholders, staying informed about these moving parts remains crucial as Malaysia builds on its improved economic momentum and addresses emerging concerns surrounding governance and foreign participation.
Smart Money Mindset will continue monitoring these stories and delivering insightful analysis to keep you ahead in Malaysia’s evolving financial landscape.