Top Financial News of 2024: Significant Developments in Malaysia’s Economy

Friday, April 4, 2025

In 2024, Malaysia witnessed significant economic developments marked by substantial recovery in investor sentiment, major corporate actions, and growing controversies over strategic business dealings. Here’s a comprehensive overview of the year’s noteworthy financial events.

Malaysian Equities and Currency Rally

After enduring a turbulent political landscape in previous years, Malaysian equities triumphed in 2024, enjoying their best performance since 2010. The benchmark index, FBM KLCI, recorded a remarkable gain of 12.58%, reflecting a resurgence in investor confidence. This turnaround enabled the market capitalisation of Malaysian stocks to exceed the RM2 trillion mark for the first time by May.

Robust corporate earnings, renewed foreign investments, and favourable trade data played pivotal roles in this recovery. Among the key contributors to this upswing were prominent companies such as YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd. By the end of December 2024, the FBM KLCI was trading at a forward Price-to-Earnings Ratio (PER) of 15.7 times, outperforming its three-year average of 14.3 times.

Additionally, the Malaysian ringgit demonstrated impressive strength, climbing up to an intra-year high of 4.124 against the US dollar in September. Although it subsequently adjusted to 4.472, this still represented a year-to-date appreciation of 2.84%. Encouragement for this strengthening was partially attributed to Bank Negara Malaysia’s initiatives urging local businesses to repatriate overseas investment income and convert export proceeds into ringgit.

Controversial Privatisation of Malaysia Airports Holdings Bhd

In the realm of major corporate transactions, Malaysia Airports Holdings Bhd (MAHB) became a focal point of controversy when it announced a proposal for privatisation. In March, MAHB received a 35-year extension to its management concession for Malaysia’s airports, which was followed by an offer from a consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF) at RM11 per share.

The offer raised eyebrows due to the consortium’s affiliation with Global Infrastructure Partners (GIP) and the Abu Dhabi Investment Authority (ADIA), alongside criticisms regarding GIP’s connections with BlackRock. The proposed takeover led to public protests and concerns over foreign influence in national assets. Despite the dissent, the Malaysian government advocated for the privatisation as a necessary step to unlock MAHB’s potential and improve its operations.

Independent directors of MAHB warned against accepting the offer, citing that it undervalued the company’s future prospects, while an independent advisory firm recommended acceptance based on the company’s long-standing suppressed share price.

U Mobile Selected for 5G Deployment

In November, the Malaysian Communications and Multimedia Commission (MCMC) named U Mobile Sdn Bhd to lead the deployment of the nation’s second 5G network. This decision was met with skepticism as U Mobile is significantly smaller than its competitors, prompting MCMC to clarify the rationale behind its choice.

The announcement raised questions about the transparency of the selection process, especially regarding foreign shareholding in the telecommunications sector. U Mobile’s largest shareholder, Singapore’s Temasek, holds a significant interest in the company, leading to speculations about compliance with Malaysia’s foreign ownership regulations.

Shortly thereafter, Temasek announced plans to reduce its stake in U Mobile, further complicating the narrative surrounding foreign investment and control in Malaysia’s crucial telecommunications infrastructure.

Sarawak’s Push for Gas Control

In the energy sector, Sarawak sought to assert greater control over its gas resources, advocating for Petroleum Sarawak Bhd (Petros) to handle gas aggregations in the state. This move was particularly significant given Sarawak’s ownership of a considerable portion of Malaysia’s gas reserves, currently managed by national oil company Petronas.

Debates ensued over the implications for Petronas, as Sarawak’s gas revenue had tripled since 2019, raising concerns about the potential impacts on national dividends. The situation prompted dialogue among state and federal leaders, emphasizing the importance of resolving conflicts over resource management in the energy sector.

Teh Family’s Strategic Stake Sale

October saw Public Bank Bhd announcing the acquisition of a 44.15% stake in general insurer LPI Capital Bhd from the family of its late founder, Tan Sri Teh Hong Piow, for RM1.72 billion. This marked a significant merger and acquisition activity for the bank and led to a mandatory takeover offer for the remaining shares.

Additionally, the Teh family disclosed plans to reduce its stake in Public Bank from its current 23.41% to 10% over five years, aligning with regulations that limit ownership stakes in financial institutions. The move was strategic and signaled compliance with existing financial regulations while reshaping the shareholder landscape of one of Malaysia’s largest banks.

Surge in Data Centre Investments

2024 also marked a significant influx of investments in the data centre sector, with over RM75 billion flowing into Malaysia from major global tech firms such as Amazon Web Services, Microsoft, and Google. This development is set to further strengthen Malaysia’s position as a leading hub for data centres in the region while driving land deals and infrastructure improvements.

As these developments unfold, Malaysia’s economic landscape continues to evolve, driven by investor confidence, regulatory changes, and strategic corporate maneuvers. The outlook for 2025 remains cautiously optimistic as stakeholders navigate the complexities of these shifting dynamics.

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