The introduction of the MY Value Up programme by Bursa Malaysia announced in April 20, 2026 marks a structural shift in Malaysia’s capital market strategy under the broader Capital Market Masterplan 2026–2030. The initiative is designed to enhance market efficiency, improve corporate value creation, and strengthen investor participation by addressing long-standing issues such as valuation discounts, liquidity fragmentation, and limited mid-cap visibility. By focusing on governance quality, earnings sustainability, and investor confidence, the MY Value Up programme aims to reposition Malaysia as a more competitive and investable capital market within ASEAN.
Exhibit 1: Market Performance of Japan, Korea, and Singapore Following the Value-Up Programme Announcement
*The date when the value up program was announced for the respective markets
*Current Price, P/E, P/B, ROE, and Est Earnings Growth CY2026 figures are as of 21 April 2026
Stock Market Index: Japan (Nikkei 225, N225), Korea (KOSPI, KS11), Singapore (Straits Times Index, STI)
Source: Bloomberg, PCM, 21 April 2026
The recent Malaysia Value-Up programme may have been inspired by regional peers such as Japan, Korea, and Singapore, whose respective Value-Up initiatives have driven meaningful improvements in stock market performance and key metrics including valuations, earnings growth, and ROE (Exhibit 1). In Japan, similar capital market reforms have already demonstrated measurable impact on valuations and investor behaviour. Over this period, the market has experienced a strong re-rating, with prices increasing significantly alongside an expansion in valuation multiples. The Japanese market represented by the Nikkei 225 Index rose from 28,031 in 2023 to 59,375 in 2026 (+112%), while P/E expanded from 16.4x to 22.9x (+40%), and P/B increased from 1.6x to 2.6x (+68%). ROE improved from 9.5% (2023) to 11.4% (2026), reflecting a +1.9% of improvement. Earnings growth shifted from -15.8% (2023) to +12.3% (2026), representing a remarkable improvement.
In South Korea, the impact has been more pronounced in earnings efficiency. Korea market represented by the Kospi Index rose from 2,647 in 2024 to 6,348 in 2026 (+140%), while P/E contracted from 10.6x to 7.7x (–27%). A lower P/E ratio indicates higher earnings relative to price, reflecting faster earnings growth in the Korea market, supported by strong performance in the semiconductor sector. Earnings growth accelerated from 40.4% (2024) to 202.9% (2026), reflecting a very strong expansion. Finally, P/B expanded from 0.9x (2024) to 1.6x (2026), and ROE surged from 8.4% (2024) to 20.8% (2026).
In Singapore, market performance has strengthened, supported by its capital market reform programme, the Equity Market Development Programme (EQDP). During this period, the Singapore market represented by the Straits Times Index increased from 3,381 in 2024 to 5,014 in 2026 (+48%), while P/E rose from 10.8x to 15.0x (+40%). Earnings growth improved from 2.5% (2024) to 3.2% (2026). This suggests that the strong market performance in Singapore thus far has been largely driven by P/E rerating rather than earnings growth. Similarly, P/B increased from 1.1x (2024) to 1.6x (2026) (+39% expansion), while ROE remained largely unchanged at around 10.5–10.6%.
Following the announcement of the MY Value Up programme and drawing on regional precedents, we expect Malaysia to see gradual improvements in key areas such as valuation multiples, earnings growth, ROE expansion, and foreign investor participation. At the time of writing, the KLCI is trading at 14.6x P/E, with CY2026 earnings expected to grow by 10.1% (Exhibit 2). We see significant potential to enhance market appeal and a structurally bullish outlook for the Malaysia market. We maintain a constructive outlook on Malaysian equities, supported by resilient earnings growth prospects, ongoing structural reforms, and potential upside from valuation rerating and increased foreign investor participation.
Exhibit 2: FBMKLCI Index 10-Year P/E Chart
Source: Bloomberg, PCM, 21 April 2026
Disclaimer
The information contained herein does not constitute an offer, invitation, or solicitation to invest in any product or service offered by Phillip Capital Management Sdn Bhd (“PCM”). No part of this document may be reproduced or circulated without prior written consent from PCM. This is not a unit trust or collective investment scheme and is not an obligation of, deposit in, or guaranteed by PCM. All investments carry risks, including the potential loss of principal.
Performance figures presented may reflect model portfolios and may differ from actual client accounts’ performance. Variations in individual clients’ portfolios against model portfolios and between one client’s portfolio to another can arise due to multiple factors, including (but not limited to) higher relative brokerage costs for smaller portfolios, timing of capital injections or withdrawals, timing of purchases and sales, and mandate change (e.g., Shariah vs. conventional). These differences may impact overall performance.
Past performance is not necessarily indicative of future returns. The value of investments may rise or fall, and returns are not guaranteed. PCM has not considered your investment objectives, financial situation, or particular needs. You are advised to consult a licensed financial adviser before making any investment decisions.
While all reasonable care has been taken to ensure the accuracy and completeness of the information contained herein, no representation or warranty is made, and no liability is accepted for any loss arising directly or indirectly from reliance on this material. This publication has not been reviewed by the Securities Commission Malaysia.
