Malaysia stocks soar on building boom driven by data centres
Malaysian equities are on a tear led by builders and suppliers on the back of an AIdriven data centre boom, putting a longoverlooked market back on the radar of global investors.
Malaysia’s benchmark KLCI is hovering near threeandahalfyear highs and up five quarters in a row, its longest streak in 13 years. A yeartodate gain of 12% is by far the biggest in Southeast Asia.
Builder Gamuda and utility conglomerate YTL Power have doubled their stock prices in less than a year. Electricity utility Tenaga Nasional’s shares are up 45% since December, and foreign money managers are turning buyers in a bet that the market has much further to run.
A relatively steady currency, a period of stability in government, and a trend for global companies to diversify manufacturing setups beyond China offer further tailwinds.
Analysts see builders, power suppliers and tech companies gaining most from foreign investment into the Southeast Asian country.
“I think Malaysia is definitely a sweet spot at the moment because we offer water, power and the connectivity is there,” said Ernest Chew, ASEAN portfolio manager at BNP Paribas Asset Management in Kuala Lumpur, who has been buying Malaysian stocks.
“Operating a data centre is not a new thing to Malaysia ... it’s just that now we see a (generative)AI boom, a data centre boom they basically accelerate (foreign direct investment) ... that’s why we see minimal risk.”
FDI tends to be lumpy but hit 188.4 billion ringgit ($40 billion) last year, close to the record 208.6 billion drawn in 2021.