2024 was a dynamic year for Malaysia’s stock market. The FTSE Bursa Malaysia (FBM) KLCI started 2024 at 1,455 points, and climbed nearly 16% – reaching a peak of 1,683 points by September 2024. It was a year packed with policy changes, economic updates, and global developments that kept investors on their toes.
Let’s dive into 5 of the biggest highlights that happened in 2024 – and what 2025 may bring!
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#1 PADU Initiative and Capital Gains Tax Exemption
Malaysia’s stock market begun with a promising start with the launch of the Central Database Hub (PADU) by Prime Minister Anwar Ibrahim in January 2024. This initiative aims to streamline the delivery of targeted subsidies, ensuring greater efficiency and inclusivity.
Just two weeks later, on 16 January 2024, the government announced the exemption of Capital Gains Tax (CGT) on unit trusts. This policy, effective from 1 January 2023 to 31 December 2028, encourages individual investments in these funds, which constitute over 90% of unit trust holders.
The financial markets responded positively, with the unit trust exemption seen as a move to bolster retail investment sentiment.
Read Also: How The 2024 US Presidential Election Could Impact The Malaysian Stock Market?
#2 The EPF Account 3: A New Financial Lifeline
April 2024 marked a pivotal shift for employees under 55 with the launch of Account 3 by the Employees Provident Fund (EPF), offering greater flexibility for partial withdrawals to fund education, healthcare, and more.
EPF adjusted its contribution structure to allocate 10% to Account 3, shifting the previous 70:30 split between Accounts 1 and 2 to a 75:15:10 ratio. Members were given the option to opt in from 11 May to 31 August, with initial contributions drawn from their Account 2 balances.
While this initiative is expected to boost domestic consumption and support key sectors, its impact may not match the RM10,000 special withdrawal in 2022, which played a significant role in post-pandemic recovery.
Read Also: Guide To EPF Account 3 Savings, And What You Should Use Them For?
#3 Diesel Subsidy Rationalisation
The Malaysian government implement a diesel subsidy rationalisation – which was a positive move towards better fiscal management. This raised the diesel fuel price to RM3.35 per litre from RM2.15 (+56%), which took effect on 10 June 2024.
Still, Malaysia’s diesel prices remain the among the cheapest in Southeast Asia, after Brunei and East Malaysia, where the subsidy remains in place due to greater travel distances and higher costs. This addresses the burgeoning subsidy bill that soared from RM1.4 billion in 2019 to RM14.3 billion in 2023. The decision also aims to curb diesel smuggling, a persistent issue in the region.
The government projects a daily savings of RM4.5 million from the price hike, and while this might hit some Malaysians’ pockets, they’re still keeping subsidies for 33 categories of commercial vehicles, like school buses and ambulances, to soften the blow. The savings from this move will go into social programs that support low-income families.
Economically, this policy is expected to boost Malaysia’s fiscal health and could even help improve its international credit ratings. Since diesel makes up just 0.2% of the Consumer Price Index (CPI), the inflation impact should be pretty minimal.
While there are hints of a blanket end to subsidies for RON95 fuel by mid-2025, which would see net savings of RM8bn, however, the mechanism to implement this remains unclear.
Read Also: How Much Do Petrol And Diesel Cost Across Countries In Southeast Asia?
#4 Salary Boost for Civil Servants
In August 2024, Malaysia’s Prime Minister announced that civil servants will receive salary increments between 7% and 15% under the new Public Service Remuneration System (SSPA). Top management will see a 7% pay hike, while implementers, managers, and professionals will enjoy a 15% increase.
The government is focusing on seven priority areas for the future, including artificial intelligence (AI), cybersecurity, digital transformation, food technology, energy transition, national boundaries, and disaster management.
Given the current economic challenges, the salary increases will be rolled out in phases. Only civil servants who have opted into the SSPA scheme will benefit. Phase 1 kicked off on 1 December 2024, and Phase 2 will follow on 1 January 2026. For those in implementer, manager, and professional roles, Phase 1 will offer an 8% raise, with another 7% in Phase 2. Meanwhile, top management will receive a 4% boost in Phase 1 and 3% in Phase 2.
This salary adjustment aims to help ease the burden on civil servants and veterans, especially in the face of rising living costs, while supporting long-term savings. It’s a step toward improving civil servants’ welfare and addressing economic pressures.
Read Also: Civil Service Bonus: How Much Has The Government Paid In Bonuses Over The Past Decade?
#5 Unveiling Budget 2025
On 18 October 2025, the Malaysia Budget 2025 was tabled with allocations rising 3% year-on-year to RM421 billion. As part of the budget, the government is considering removing egg subsidies, following the termination of chicken subsidies last November. This move could save the government RM100 million a month, with those funds potentially being repurposed. The government also revealed that over RM3 billion had been spent on chicken and egg subsidies since February 2022.
Additionally, the minimum wage will be raised to RM1,700 from RM1,500 starting in February 2025, affecting labour intensive sectors like plantation, construction, and manufacturing. While this is great news for workers with higher disposable income, businesses might pass on the extra costs, leading to inflation.
What Can We Look Forward To In 2025?
As 2024 comes to a close, Malaysia’s stock market has seen its share of twists and turns, driven by key policy changes and market movements that have influenced investor sentiment and the country’s economic outlook.
Despite the ups and downs, Malaysia’s economy is still growing at a healthy pace, driven by both local and global factors. The formalisation of the Johor-Singapore Special Economic Zone (JS-SEZ) promises exciting new growth opportunities, especially in Johor.
Meanwhile, risks such as unpredictable geopolitical shifts and a potential fallout from the US-China trade war persist. This is supported by stabilising Malaysian politics and an ongoing focus on reform – which will strategically position Malaysia for a positive and promising year ahead.
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