Top Financial News Highlights of 2024: Malaysia’s Market Surge, Strategic Moves, and Industry Developments
As 2024 draws to a close, Malaysia’s financial landscape has witnessed a series of pivotal developments, ranging from a robust recovery in equities and currency to significant corporate maneuvers and sectoral shifts. This comprehensive briefing captures the most consequential stories shaping the nation’s economic trajectory.
- Malaysian Equities and Ringgit Rally: Best Performance in Years
After grappling with considerable political uncertainty in prior years, Malaysia’s financial markets rebounded strongly in 2024. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI), once disparaged as “the world’s worst major market” in 2019, delivered an impressive 12.58% gain—the best annual return since 2010. Buoyed by solid corporate earnings, renewed foreign investments, and encouraging trade data, the market capitalization of Malaysian stocks surpassed the RM2 trillion threshold for the first time in May. Leading contributors to the surge included YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd. Investor confidence elevated the benchmark index’s forward price-to-earnings ratio to 15.7 times, above its three-year average of 14.3. The Malaysian ringgit mirrored this positive momentum, strengthening by as much as 11.4% against the US dollar in September, before settling at a year-to-date gain of 2.84%, trading at 4.472 to the dollar. Bank Negara Malaysia’s policy urging local businesses to repatriate overseas earnings and convert export proceeds into ringgit also supported the currency’s rise.
However, early in the year, shares of companies linked to investor Datuk Dr Yu Kuan Chon saw steep declines, triggering tighter margin financing regulations and causing short-term volatility. Despite this, the FBM KLCI demonstrated resilience, posting only a marginal loss during the episode and setting the stage for its stellar year.
- Controversial Privatisation Bid for Malaysia Airports Holdings
In a strategic move, Malaysia Airports Holdings Bhd (MAHB) secured a 35-year extension to its concession for managing 39 airports nationwide. Shortly thereafter, a consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF), alongside partners Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA), proposed taking the company private at RM11 per share.
This privatization effort stirred considerable debate, partly due to concerns about GIP’s connections to BlackRock, which drew criticism related to geopolitical issues. BlackRock finalized its acquisition of GIP in October. Despite government reassurances that the privatization would unlock MAHB’s potential, all five independent MAHB directors advised shareholders against accepting the offer, arguing it undervalued the company given its strong financial outlook.
Independent advisor Hong Leong Investment Bank recommended acceptance of the offer due to MAHB’s long-suppressed share price but deemed it unfair against their fair value estimate of RM12.61 to RM13.71 per share. The consortium maintained its stance, emphasizing past performance and the challenges ahead.
- U Mobile’s Selection as 5G Leader Raises Ownership Questions
The Malaysian Communications and Multimedia Commission (MCMC) named U Mobile Sdn Bhd to spearhead the nation’s second 5G network, a decision that surprised industry watchers given U Mobile’s comparatively smaller size. Questions emerged about the transparency of the selection process and the extent of foreign influence, as Singapore’s state-owned investment firm Temasek is the largest shareholder with a 48.25% stake.
Following the announcement, Temasek’s affiliate ST Telemedia said it would reduce its stake to 20% by selling a majority stake to Mawar Setia, owned by prominent local figures including tycoon Tan Sri Vincent Tan and Tunku Tun Aminah Sultan Ibrahim. Clarification was sought as the reported shares raised concerns about exceeding the 49% foreign ownership cap for Malaysian telecoms. Subsequently, Temasek admitted it holds convertible instruments that could increase its economic interest, prompting further scrutiny about actual foreign ownership levels, potentially up to 71%, which remains consistent with disclosures to regulators.
- Sarawak’s Push to Control Gas Aggregation Challenges Petronas’ Role
In 2024, Sarawak intensified its efforts to assert greater control over the state’s vast gas reserves, advocating for Petroleum Sarawak Bhd (Petros) to become the aggregator managing gas supply within the region. This challenged the current arrangement where Petronas, the national oil company, fulfills this role.
Since Sarawak holds 60% of Malaysia’s gas reserves, the move has sparked widespread debate. The gas aggregator is tasked with procuring natural gas for distribution and developing infrastructure under the Distribution of Gas Ordinance 2016. Sarawak’s leadership aims to leverage this to offer affordable gas energy to more of the state’s populace.
The implications touch on revenue sharing, with Sarawak’s oil and gas-related earnings nearly tripling from RM2.11 billion in 2019 to over RM6 billion in 2023. Petronas meanwhile relies substantially on its gas segment, contributing 37% of its RM81 billion group profit and providing RM40 billion in dividends to the federal government in 2023. Prime Minister Datuk Seri Anwar Ibrahim indicated that decisions regarding gas supply would be collaborative, reflecting a need for dialogue between federal and state authorities to resolve this key industry issue.
- Teh Family’s Sale of LPI Stake to Public Bank and Shareholding Plans
Public Bank Bhd surprised the market with the acquisition of the late founder Tan Sri Teh Hong Piow’s family’s entire 44.15% stake in insurer LPI Capital Bhd for RM1.72 billion, marking a major deal following Public Bank’s 2021 Hock Hua Bank acquisition. The acquisition, priced at RM9.80 per share, triggered a mandatory takeover offer for remaining LPI shares, which is ongoing.
Concurrently, Diona Teh Li Shian, the founder’s youngest daughter, announced plans for the family to reduce their holdings in Public Bank from 23.41% to the statutory 10% cap over five years via a share sale to employees, directors, and eligible shareholders. This restructuring aligns with the Financial Services Act 2013. At 10%, the Teh family would become Public Bank’s second-largest shareholder behind the Employees Provident Fund (14.8%). Public Bank shares hovered around RM4.57, valuing the Teh family’s current stake at approximately RM20.77 billion.
- Data Centre Boom Fuels Over RM75 Billion Investment Inflows
Malaysia’s emergence as a regional hub for data centres has attracted significant investments exceeding RM75 billion in 2024. Global technology giants, including Amazon Web Services Inc, Microsoft Corp, and Google, have expanded their footprints, triggering a surge in land acquisitions and infrastructure development.
This influx underpins Malaysia’s strategic positioning within Southeast Asia’s digital economy and is expected to accelerate technology adoption and digital transformation across sectors.
Conclusion
The financial year 2024 witnessed Malaysia’s market resurgence coupled with consequential corporate and infrastructural developments. From the strong recovery of equities and the ringgit, pivotal privatization offers, to strategic shifts in telecommunications and energy, these dynamics underscore Malaysia’s evolving economic landscape. Stakeholders continue to monitor these stories closely as they shape the prospects for growth and stability in the years ahead.