Top Financial News Highlights of 2024: Malaysia’s Equities Surge, Controversial MAHB Privatisation, and More
As 2024 draws to a close, Malaysia’s financial landscape has experienced significant movements across various sectors, reflecting a year of both recovery and controversy. From the robust rally in Malaysian equities to contentious privatisation deals and strategic shifts in telecommunications and natural resources, the year has been marked by dynamic developments that have caught the attention of investors, policymakers, and the public alike. Below is a detailed overview of the top financial news stories that shaped Malaysia’s economy in 2024. 1. Malaysian Equities and Ringgit Achieve Remarkable Growth
Malaysia’s equity market entered 2024 buoyed by renewed investor confidence following years of political uncertainty. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) surged by 12.58% over the year, marking its strongest annual gain since 2010. Market capitalisation of Malaysian stocks breached the RM2 trillion threshold in May, a milestone supported by strong corporate earnings, positive foreign investment inflows, and optimistic economic indicators, including better-than-expected trade figures.
Notable contributors to the equity rally included YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd, which recorded solid performances. The benchmark FBM KLCI traded at a forward price-to-earnings ratio (PER) of 15.7 times, higher than its three-year average of 14.3 times as at the end of 2023. The Malaysian ringgit also experienced a significant appreciation, reaching an intra-year high of 4.124 against the US dollar in September, marking an 11.4% rally before settling at 4.472 — still a 2.84% rise year-to-date. This currency strengthening was supported by Bank Negara Malaysia’s policy encouraging Malaysian firms to repatriate overseas investment income and convert export proceeds into ringgit.
However, the year’s start witnessed turbulence when shares of certain companies linked to investor Datuk Dr Yu Kuan Chon suffered dramatic value losses, prompting regulatory tightening on margin financing. Despite a brief three-day sell-off that hit the FBM ACE Index hard, the broader FBM KLCI sustained minimal damage and stabilized by February, paving the way for a robust market outlook.
- Controversy Surrounds Malaysia Airports Holdings Bhd (MAHB) Privatisation Offer
In a landmark and contentious move, Malaysia Airports Holdings Bhd (MAHB) announced a takeover offer in May which proposed to privatise the airport operator at RM11 per share. The offer came shortly after MAHB secured a 35-year extension on its concession to run Malaysia’s 39 airports, extending from 2034 to 2069. The offer was spearheaded by a consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF), alongside Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA). Under the proposal, Khazanah’s stake would increase to 40%, EPF’s to 30%, with GIP and ADIA jointly holding the remaining 30%. The Malaysian government retained special share rights in MAHB.
The move drew significant public protests, especially due to GIP’s ties with BlackRock, a global investment giant facing accusations from some groups of pro-Zionist leanings amid ongoing Palestinian conflicts. BlackRock’s acquisition of GIP in October further intensified the debates. The government defended the privatisation as a strategic initiative to enhance MAHB’s growth and operational efficiency.
The company’s five independent directors publicly recommended shareholders reject the offer, arguing it undervalued MAHB’s growth potential. In contrast, the independent adviser Hong Leong Investment Bank viewed the offer as reasonable given MAHB’s previously suppressed share price but acknowledged that RM11 per share was below what the bank estimated as MAHB’s fair value (between RM12.61 and RM13.71).
Despite dissenting views, the consortium maintained its offer price, emphasizing the financial and operational challenges MAHB faces.
- U Mobile Selected to Lead Second 5G Network Deployment Amid Shareholding Controversy
In November, the Malaysian Communications and Multimedia Commission (MCMC) selected U Mobile Sdn Bhd to lead the rollout of Malaysia’s second 5G network. U Mobile’s selection over larger competitors generated widespread discussion about the criteria and transparency of the process.
Key concerns centered on foreign influence in vital telecommunications infrastructure, as Singapore’s sovereign wealth fund Temasek holds a substantial 48.25% stake in U Mobile through its subsidiary, ST Telemedia. This ownership raised regulatory questions given Malaysia’s 49% cap on foreign ownership in telecom companies.
Following the announcement, ST Telemedia declared plans to reduce its stake in U Mobile to 20% by selling shares to Mawar Setia, a company controlled by tycoon Tan Sri Vincent Tan and the Malaysian King’s daughter, Tunku Tun Aminah Sultan Ibrahim. However, ambiguity about the exact ownership percentages fueled speculation that Temasek’s effective stake may still reach approximately 71%, surpassing foreign ownership limits.
MCMC and involved parties have yet to provide complete clarity, keeping this issue under close watch from regulators and market observers.
- Sarawak’s Push for Gas Aggregation Sparks National Debate
2024 also saw Sarawak assert stronger control over its vast natural gas resources, aiming for Petroleum Sarawak Bhd (Petros) to become the state’s aggregator of gas supplies. Currently, Malaysia’s national oil company Petronas manages this role.
With Sarawak housing around 60% of the nation’s gas reserves, the matter has significant economic and political implications. Sarawak’s oil and gas sector revenues hit RM6 billion in 2023, nearly three times the amount recorded in 2019, thanks to higher compensation and sales tax revenues.
Petronas’ gas segment remains a profitable cornerstone for the group, contributing 37% of its RM81 billion profit in 2023 and channeling RM40 billion in dividends to the federal government, equivalent to 12% of federal revenue.
Prime Minister Datuk Seri Anwar Ibrahim emphasized that neither the federal government nor Sarawak’s state leadership intends for Petros to monopolize gas supply decisions. The evolving arrangements have prompted negotiations to balance the interests of state and federal stakeholders in Malaysia’s oil and gas ecosystem.
- Teh Family Sells LPI Capital Stake to Public Bank, Plans to Downsize Bank Holdings
In a strategic move announced in October, Public Bank Bhd acquired the full 44.15% stake held by the Teh family – descendants of the bank’s late founder Tan Sri Teh Hong Piow – in LPI Capital Bhd for RM1.72 billion. This acquisition marked Public Bank’s first major merger and acquisition since acquiring Hock Hua Bank in 2021. Simultaneously, Diona Teh Li Shian, the youngest daughter of the late founder, unveiled plans for the family to reduce their stake in Public Bank from 23.41% to 10% over the next five years. This realignment aligns with the Financial Services Act 2013, which limits individual shareholdings in financial institutions.
At a 10% holding, the Teh family would remain the bank’s second-largest shareholder, behind the Employees Provident Fund (EPF) with a 14.8% stake. Public Bank’s shares remained relatively stable following the announcements, underscoring market confidence in the bank’s prospects.
- Data Centre Investments Exceed RM75 Billion, Propelling Malaysia’s Tech Infrastructure Growth
Malaysia’s emergence as a regional hub for data centres gained momentum in 2024, driven by substantial investments exceeding RM75 billion. Global technology leaders such as Amazon Web Services, Microsoft, and Google have committed major capital to develop data infrastructure in the country, fueling a surge in commercial land acquisitions for data centre projects.
This influx of investment not only strengthens Malaysia’s position in the fast-growing digital economy but also creates new opportunities for job creation and technological advancement, positioning the nation favorably in the regional tech landscape.
Together, these developments highlight Malaysia’s ongoing economic transformation in 2024, characterized by strong market recoveries, strategic asset restructurings, and infrastructural investments at a critical time of global economic recalibration. Stakeholders across sectors remain attentive to how these trends will shape the country’s financial and industrial future. For continued updates and detailed analyses on Malaysia’s economic developments, stay tuned to Smart Money Mindset.