Malaysia’s Stock Market Revives Amid Foreign Investment Surge – Al Jazeera

Malaysia’s stock market is experiencing a significant revival, with billions of dollars pouring in, driven by robust post-pandemic economic growth and surging foreign investments from U.S. tech giants. The Bursa Malaysia’s benchmark index has climbed 17% over the past year, with 289,000 new trading accounts opened in the first seven months of 2024, nearly double that of 2023.

Stephen Yong, a financial planner, noted, “The market is emerging from a ‘lost decade,’ where it was undervalued. There’s significant room for growth.” He highlighted the potential for further expansion, supported by renewed investor interest in the Asia-Pacific region, particularly in Malaysia.

Over the last decade, Malaysia’s stock market had struggled due to political instability and economic stagnation. Investment banker Ignatius Luke Jr Tan remarked that the market had been “moribund” for years, but the recent boom has reversed this trend. “The stock market is a reflection of the economy. Post-2005, our economy wasn’t primed for growth, it was just chugging along,” he said.

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Stock Market Revival

Malaysia’s recent surge in growth has been bolstered by major investments from U.S. tech firms like Nvidia, Google, and Microsoft, particularly in Johor, now Southeast Asia’s fastest-growing data center market. In the first quarter of 2024, Malaysia recorded $19.3 billion in approved investments, over half from foreign sources.

The local IPO market has also gained momentum, with 34 IPOs by September, including the listing of 99 Speed Mart, the biggest in seven years, raising $542.8 million. Deloitte noted that Malaysia led Southeast Asia’s IPO market in the first half of 2024, raising $450 million.

A Bursa spokesperson attributed the market’s positive performance to strong economic fundamentals and macroeconomic factors like FDI, earnings recovery, and infrastructure projects. Analyst Eza Ezamie echoed this sentiment, emphasizing the importance of Malaysia’s steady Overnight Policy Rate (OPR) and stable inflation in sustaining the stock market’s upward trajectory.

However, caution remains. A remisier warned that while the market is performing well, foreign investors could pull out quickly if better opportunities arise elsewhere. This could impact market stability, but for now, optimism prevails in Malaysia’s economic outlook.

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