On Tuesday, stocks in Malaysia hit a record high of RM2 trillion in market capitalization.

The benchmark index (FBMKLCI) rallied for four straight days and soared past 1,600 points for the first time in two years, representing a 10.92% gain since January.

The gains are also on par with the US stock market, which rallied 10.85% within a similar timeframe.

The FBMKLCI even beat growth US stocks such as Tesla (-31.50%) and Apple (-1.33%).

"With over 1,000 public-listed companies (the highest number in the ASEAN region), we are well-positioned to reach greater heights,” Bursa said on Wednesday.

Driven by foreign funds, heavyweight counters such as Maybank, Tenaga, and CIMB led the upward momentum.

Including dividends, Maybank and CIMB are up 14% and 19.24% in the past five months, respectively.

Meanwhile, Tenaga Nasional surged to a 4-year high of RM12.38, up a whopping 26.78%.

Even if you don’t invest in the Malaysian market, this is still great news for you.

In 2022, EPF had RM140.5 billion allocated in Bursa Malaysia.

That’s roughly 14% of its total assets of RM1.003 trillion.

EPF has a large exposure in all of the heavyweight counters, most notably:

1. Maybank (MAYBANK)
   Num. of shares: 1.51 billion
   Value: RM14.9 billion

2. Public Bank (PBBANK)
   Num. of shares: 3.08 billion
   Value: RM12.94 billion

3. CIMB Group (CIMB)
   Num. of shares: 1.58 billion
   Value: RM10.70 billion

4. Tenaga Nasional (TENAGA)
   Num. of shares: 1.06 billion
   Value: RM13.12 billion

5. RHB Bank (RHB)
   Num. of shares: 1.73 billion
   Value: RM9.51 billion

The combined value of these holdings make up 43.5% of EPF’s RM140.5 billion investment in Bursa Malaysia.

The retirement fund also has substantial shareholdings in stocks such as Malaysia Building Society (MBSB), Malaysian Resources Corporation (MRCB), and Globetronics Technology (GTRONIC), among others:

EPF is not the only fund that invests heavily in the Malaysian market.

Amanah Saham Bumiputera (ASB) and Amanah Saham Malaysia (ASM) had a total fund size of RM174.9 billion and RM22.6 billion as of 2023.

The majority of both funds comprise of equity holdings, mainly in Malaysia.

In fact, ASB is the single largest shareholder of Maybank, owning 3.64 billion shares at a valuation of RM35.93 billion as of Feb 2024.

This is three times more compared to EPF’s stake of 10.73% (1.29 billion shares).

Five of Maybank’s top 10 shareholders belong to ASNB unit trust funds - ASB, ASM, ASM2, ASM3, and ASB2.

Other notable equity investments of ASB include:

1. Sime Darby Plantation (SIMEPLT)
   Num. of shares: 3.16 billion
   Value: RM14.82 billion

2. Sime Darby (SIME)
   Num. of shares: 2.49 billion
   Value: RM6.99 billion

3. Tenaga Nasional (TENAGA)
   Num. of shares: 572.6 million
   Value: RM7.10 billion

4. CIMB Group (CIMB)
   Num. of shares: 470.2 million
   Value: RM3.18 billion

Notable equity investments for ASM:

1. Maybank (MAYBANK)
   Num. of shares: 258.6 million
   Value: RM2.56 billion

2. CIMB Group (CIMB)
   Num. of shares: 168.2 million
   Value: RM1.14 billion

3. Tenaga Nasional (TENAGA)
   Num. of shares: 85.8 million
   Value: RM1.06 billion

4. Public Bank (PBBANK)
   Num. of shares: 214.4 million
   Value: RM896.2 million

5. Sime Darby Plantation (SIMEPLT)
   Num. of shares: 186.3 million
   Value: RM841.9 million

Speaking of this, other local unit trust funds such as:

• ASB 2

• ASB 3 Didik

• ASM 2 Wawasan

• ASM 3

all have significant equity investments in the Malaysian market (>70%).

So, if the exceptional performance in the Malaysian market continues, we may just see a better dividend for these funds in 2024! 🤑

It may be still a bit too early to tell though. 🥲

Economist Sani Hamid explained that even if the FBMKLCI ended the year with remarkable gains, EPF and ASB are unlikely to declare significantly higher dividends. It will be slightly higher, but not to the 7-8% range.

This is because the funds will want to “manage expectations” and store some of the profits for the future.

“I want to invest in the Malaysian market. How do I get started?”

You can buy MY stocks through regulated brokers such as MooMoo, Rakuten, and M+ Global.

Register with Rakuten today and you’ll receive 1,000 RT points (worth RM10) to lower your brokerage fee:

My investment strategy in the Malaysian market is very passive and I try not to stock pick or speculate.

I only hold Maybank and Public Bank since they are the largest holdings of EPF.

Read more about Malaysian banks here:

That’s all for this week’s newsletter!

Disclaimer: The information contained in this newsletter is for informational and educational purposes only. Nothing herein shall be construed to be financial, legal, or tax advice.

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