KUALA LUMPUR, Dec 21 — Malaysia’s stock market rebounded and held steady towards year-end, underpinned by attractive valuations and a gradual earnings recovery, despite a turbulent global backdrop precipitated by US-imposed tariffs and a prolonged government shutdown that weighed on investor sentiment.

There were 60 public listings in 2025 compared with 55 initial public offerings (IPOs) last year, a commendable outcome that underscored sustained investor interest despite vagaries of the international marketplace.

Rakuten Trade Sdn Bhd vice president of equity research Thong Pak Leng said the market’s tenacity was also due to its defensive sector profile, with investors focusing on equities that are able to generate consistent returns despite the turbulence.

US President Donald Trump’s announcement of tariffs on more than 100 countries, including Malaysia, in April rattled markets worldwide, leading to a shaky period for Bursa Malaysia, especially after the first quarter. The market, however, managed to recover and deliver a moderate performance compared with regional peers.

Thong said Japan, India and Taiwan enjoyed stronger rallies driven by their technology-heavy compositions, while China and Hong Kong struggled.

“Malaysia outperformed much of North Asia but lagged the standout Asean markets, particularly Indonesia and Thailand,” he told Bernama.

Bursa Malaysia opened the year on January 2 at 1,632.87 before the FTSE Bursa Malaysia KLCI (FBM KLCI) fell to its year low of 1,400.59 on April 9, triggered by the initial tariffs of 24 per cent on Malaysia, adding to external pressures.

Trade uncertainties triggered a market correction in April as global markets reacted to headline tariff shocks.

The benchmark index then staged a steady recovery, culminating in a year high of 1,665.90 points by December 19, and rose 0.33 per cent year-to-date as domestic sentiment improved ahead of year-end portfolio rebalancing.

Earlier, Bursa Malaysia staged a rebound when tariffs were finally set at 19 per cent, coupled with positive sentiment following the announcement of the 13th Malaysia Plan and optimism sparked by a temporary pause in US-China trade tensions.

Investor sentiment was further bolstered by Malaysia’s Asean Chairmanship, with the 47th Asean Summit and Related Summits highlighting stronger regional collaboration and policy coordination, reinforcing Asean’s appeal as a stable investment destination and providing a supportive backdrop for the local equity market.

The US Federal Open Market Committee’s decision to cut interest rates to 3.5–3.75 per cent, its third reduction this year from 4.25–4.50 per cent in December 2024, is expected to further lift sentiment in both global and local markets as investable funds become cheaper.

IPO activity meets 2025 target

IPOs on Bursa Malaysia performed strongly this year, with the number of listings reaching the full-year target of 60 companies, surpassing last year’s total of 55 IPOs on the exchange.

Finance Minister II Datuk Seri Amir Hamzah Azizan said that with the 60 listings, nearly RM30 billion in capital was raised on Bursa Malaysia.

The IPOs comprised 11 listings on the Main Market, 44 on the ACE Market and five on the LEAP Market.

Notably, Eco-Shop Marketing Bhd made a strong debut on the Main Market of Bursa Malaysia at RM1.25, a premium of 12 sen over its IPO price of RM1.13.

Commenting on the performance, Thong said overall volumes were stable, although the typical IPO size was smaller relative to past cycles.

“Investor interest persisted, but pricing became more disciplined against a backdrop of uncertain global rates,” he said.

Prominent companies exit Bursa Malaysia

Malaysia also saw several major companies delisted from Bursa Malaysia this year, marking a significant shift in the country’s capital market landscape.

The most prominent was Malaysia Airports Holdings Bhd, which was delisted on February 25 following its successful privatisation by the Gateway Development Alliance consortium.

The delisting marked the end of a 25-year corporate journey for the airport operator as a listed company, since its debut on November 30, 1999, at RM2.50.

FGV Holdings Bhd was also delisted from the Main Market on Aug 28 after the Federal Land Development Authority acquired more than 90 per cent of the company’s shares through a voluntary takeover offer.

Another company, KNM Group Bhd, classified under Practice Note 17, was delisted from Bursa Malaysia on November 5 after 22 years as a listed entity, prioritising financial stability and proceeding with the €270 million (RM1.34 billion) sale of Deutsche KNM GmbH, which it said was critical to stabilising its finances.

Outlook

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the FBM KLCI had struggled to break through the 1,650 level this year, but signs of an inflexion point are emerging, suggesting renewed momentum as market conditions improve.

“Equities are expected to benefit from an earnings recovery, stronger ringgit transmission and a narrowing valuation discount that should draw foreign inflows back into financials, industrials and selective technology names,” he said.

Overall, he expects a more balanced investment environment next year, with equities finally aligning with the strength already visible in the real economy. — Bernama