Top Financial News Highlights of 2024: Malaysia’s Market Surge, Strategic Deals, and Industry Developments
In 2024, Malaysia’s financial landscape witnessed remarkable shifts across various sectors, ranging from a significant recovery in equities and currency strength to strategic corporate moves and contentious policy debates. Here are the key developments that shaped the year:
- Malaysian Equities and Ringgit Rally to Multi-Year Highs
Malaysia experienced a pronounced turnaround in investor sentiment in 2024, recovering from years of political uncertainty that had dampened business confidence. The benchmark FBM KLCI index posted an impressive 12.58% gain—the strongest annual performance since 2010—pushing the total market capitalization of listed stocks beyond the RM2 trillion milestone for the first time in May.
This uptrend was supported by robust corporate earnings reports, renewed foreign investment inflows, and optimistic economic fundamentals including better-than-expected trade statistics. Leading contributors to the rally included major players such as YTL Power International Bhd, Tenaga Nasional Bhd, and CIMB Group Holdings Bhd. The index’s valuation reflected this positive momentum, trading at a forward price-to-earnings ratio (PER) of 15.7 times by year-end, compared to the three-year average of 14.3 times.
Currency markets mirrored the equity strength, with the Malaysian ringgit appreciating as much as 11.4% against the US dollar in September to an intra-year high of 4.124 MYR/USD. Although the currency softened slightly thereafter amid slower US interest rate cuts, it still ended the year with a 2.84% gain. Efforts by Bank Negara Malaysia to encourage businesses to repatriate overseas income and convert export earnings also bolstered the ringgit’s resilience.
Despite early volatility due to the dramatic share price falls of certain companies linked to prominent investor Datuk Dr. Yu Kuan Chon, market stability returned by February, setting the foundation for the year’s substantial achievements.
- Controversy Surrounds Malaysia Airports Holdings’ Privatisation Plans
Malaysia Airports Holdings Bhd (MAHB) became a focal point of corporate contention after securing a 35-year extension to its airport management concession in March. By May, a consortium comprising Khazanah Nasional Bhd, Employees Provident Fund (EPF), Global Infrastructure Partners (GIP), and Abu Dhabi Investment Authority (ADIA) proposed to privatise MAHB for RM11 per share.
The proposed deal would see Khazanah’s stake rise to 40%, EPF’s to 30%, with GIP and ADIA holding the remaining 30%, while the Malaysian government maintains special share rights. However, public protests erupted, particularly targeting GIP’s connection with BlackRock—a firm criticized by some groups for alleged geopolitical conflicts.
Despite the backlash, the government defended privatisation as a strategic step to unlock MAHB’s growth potential. In December, all five independent directors of MAHB advised shareholders to reject the offer, arguing it undervalued the company’s prospects. Contrarily, independent adviser Hong Leong Investment Bank recommended acceptance, citing the offer’s reasonableness against the backdrop of a suppressed share price but noted it was below fair valuation estimates. The consortium maintained its RM11 offer, citing oversight by the directors of MAHB’s operational challenges and performance.
- U Mobile’s 5G Leadership Raises Foreign Ownership Concerns
In November, Malaysia’s communications regulator selected U Mobile Sdn Bhd to spearhead the deployment of the nation’s second 5G network. The choice sparked debate, as U Mobile is considerably smaller than competitors, prompting the Malaysian Communications and Multimedia Commission (MCMC) to justify the decision by highlighting U Mobile’s track record.
However, transparency concerns lingered, particularly regarding foreign ownership limits. Singapore’s state-owned Temasek holds a 48.25% stake via its subsidiaries, raising questions about adherence to Malaysia’s 49% cap on foreign ownership in telecommunications companies.
Following MCMC’s announcement, Temasek announced plans to reduce its stake to 20% by selling a majority shareholding to Mawar Setia, co-owned by Malaysian tycoon Tan Sri Vincent Tan and the King’s daughter. Yet the terminology of “majority stake,” implying over 50%, added to confusion about compliance with foreign ownership rules. Temasek later clarified that Mawar Setia would hold about 51%, and hinted at complex shareholding instruments potentially extending Temasek’s effective stake to as high as 71%. State-linked ST Telemedia asserted its holdings were consistent with regulatory disclosures.
- Sarawak’s Push for Gas Resource Control Sparks Oil & Gas Industry Debate
Sarawak, which holds approximately 60% of Malaysia’s gas reserves, intensified efforts to have Petroleum Sarawak Bhd (Petros) assume the role of gas aggregator for the state. Currently, this role is performed by national oil company Petronas, which manages the country’s oil and gas resources.
The gas aggregator is charged with procuring and distributing natural gas, developing infrastructure, and enabling affordable energy supply—a strategic imperative voiced repeatedly by Sarawak’s Chief Minister Abang Johari. While some support Sarawak’s bid for greater resource control, others are concerned about implications for Petronas and federal government revenue, given Petronas’ significant dividend contributions, totaling RM40 billion in 2023. Prime Minister Datuk Seri Anwar Ibrahim stated in December that neither federal nor state leaders intend for Petros to have sole authority over gas supply and distribution, signaling ongoing negotiations to resolve this complex issue impacting Malaysia’s broader oil and gas ecosystem.
- Teh Family’s Strategic Divestment and Public Bank’s Insurance Expansion
Public Bank Bhd, Malaysia’s third-largest bank by assets, announced a surprise acquisition in October to buy 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. This move, marking the bank’s first major merger and acquisition since its 2021 takeover of Hock Hua Bank, triggered a mandatory general offer for remaining LPI shares, now underway.
Notably, Diona Teh Li Shian, Hong Piow’s youngest daughter, revealed that the Teh family plans to reduce its stake in Public Bank from 23.41% to 10% within five years via a restricted sale to employees and other shareholders, complying with regulatory caps on individual ownership under the Financial Services Act 2013. At 10%, the family would become the bank’s second-largest shareholder behind the Employees Provident Fund. Despite the announcement, Public Bank share prices remained stable, valuing the family’s holdings at over RM20 billion.
- Malaysia Emerges as Data Centre Investment Hub with Over RM75 Billion Inflows
Malaysia has solidified its role as a regional leader in data centre infrastructure, attracting over RM75 billion in investments during 2024. Global tech giants including Amazon Web Services, Microsoft, and Google have expanded their presence in the country, fueling a surge in land acquisitions and boosting ancillary industries.
This influx reflects Malaysia’s strategic position as a Southeast Asian digital hub and increasing demand for cloud computing and data storage services among regional and global firms.
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As 2024 concludes, Malaysia’s financial sector reveals promising growth trajectories amidst transformational initiatives and complex debates, setting the stage for continued evolution in the nation’s economic and corporate landscape. Smart Money Mindset will continue monitoring these critical developments.