This article first appeared in The Edge Malaysia Weekly on July 21, 2025 - July 27, 2025

AN eye-catching RM100 billion market capitalisation growth target was mentioned at a special 2025 progress report briefing for the Government-Linked Companies Empowerment and Reform (GEAR-uP) programme, which taps six core government-linked investment companies (GLICs) to collectively invest RM120 billion over five years to bolster the country’s economic growth engines.

By value of assets managed, the six GLICs are the Employees Provident Fund (EPF), Permodalan Nasional Bhd (PNB),  Retirement Fund (Inc) (KWAP), Khazanah Nasional Bhd, Pilgrims Fund Board (LTH) and Armed Forces Fund Board (LTAT).

“Looking ahead, GEAR-uP will expand its scope to involve over 30 government-linked corporations (GLCs) under the participating GLICs. These companies will be guided by ambitions to collectively achieve RM100 billion in market capitalisation, deliver 7.5% shareholder returns and champion non-financial outcomes, including implementing living wages, growing bumiputera enterprises, and developing talent and future leaders,” the Ministry of Finance (MoF) said in its June 30 statement, released in conjunction with the special briefing.

When asked about the RM100 billion market capitalisation growth target, Minister of Finance II Datuk Seri Amir Hamzah Azizan says the total investments by GLICs on Bursa Malaysia are currently worth about RM540 billion and the aim is to double investment returns from 3.5% per annum now to 7.5% per annum to earn at least RM100 billion more over five years. Details on how that will happen and a list of the 30 GLCs will be shared separately in due course, he adds.

Mathematically, at 3.5% per annum, a portfolio worth RM540 billion will grow by a cumulative RM101 billion over five years to RM641 billion.

At the targeted return rate of 7.5% per annum, that same RM540 billion investment portfolio would grow by RM235 billion, or RM134 billion more, to RM775 billion over five years, simple workings show.

MoF did not say whether the RM540 billion would be limited to just the six GLICs or also include institutions like Petroliam Nasional Bhd (Petronas).

The current market value of the investment holdings of the six GLICs is about RM465 billion, according to The Edge’s compilation of Bloomberg data (see Table A).

Incidentally, the current market value of five key listed subsidiaries of Petronas — Petronas Gas Bhd (KL:PETGAS), MISC Bhd (KL:MISC), Petronas Chemicals Group Bhd (KL:PCHEM), Petronas Dagangan Bhd (KL:PETDAG) and KLCCP Stapled Group (KL:KLCC) — is worth just over RM75 billion (see Table B).

Collectively, the RM465 billion and RM75 billion work out to RM540 billion (see Table C).

By filtering out key equity holdings of the six core GLICs under the GEAR-uP initiative, we arrived at 28 companies where the equity holdings are at least 33% and included corporations that are seen as GLCs due to their links to Petronas or other GLCs (see Table 1a).

It is not immediately known if the GEAR-uP list of 30 companies was drawn up before Malaysia Airports Holdings Bhd (MAHB) was delisted on Feb 25, 2025, following a privatisation bid involving Khazanah and EPF. Meanwhile, LTAT had privatised Boustead Plantations Bhd in January 2024 and Boustead Holdings Bhd in June 2023 respectively.

Simple tabulations show that our “guesstimate” list of 28 key GLCs have collectively seen their market capitalisation grow almost RM77 billion over five years, from the start of 2020 to end-2024. The six GLICs’ share of market capitalisation growth is smaller at about RM47.2 billion, simple calculations show, assuming no change in their equity holdings over five years.

Still, the RM100 billion market capitalisation growth over five years is not entirely out of reach if one were to take a glass half-full perspective. After all, nearly two-thirds or 18 of the 28 GLCs we think are among the key holdings of the GLICs delivered positive returns.

And five among the 18 — Malayan Banking Bhd (KL:MAYBANK), Tenaga Nasional Bhd (KL:TENAGA), CIMB Group Holdings Bhd (KL:CIMB), Telekom Malaysia Bhd (KL:TM) and IHH Healthcare Bhd (KL:IHH) — saw their collective market capitalisation rise by RM102 billion over five years, from 2020 to 2024, Bloomberg data shows.

All five are also consistent dividend payers, with at least two payouts a year (see Table 2a).

It may also be worth keeping an eye on the 10 non-GLC stocks we think could help determine whether the six GLICs attain their RM100 billion market capitalisation growth target over five years (see Table 1b).

The 10 non-GLCs — Public Bank Bhd (KL:PBBANK), Maxis Bhd (KL:MAXIS), Gamuda Bhd (KL:GAMUDA), Hong Leong Bank Bhd (KL:HLBANK), IOI Corp Bhd (KL:IOICORP), Kuala Lumpur Kepong Bhd (KL:KLK), AMMB Holdings Bhd (KL:AMBANK), Westports Holdings Bhd (KL:WPRTS), IJM Corp Bhd (KL:IJM) and Press Metal Aluminium Holdings Bhd (KL:PMETAL) — were selected based on the collective value of the holdings of the six GLICs in these blue chips.

The 10 companies collectively saw their market capitalisations grow just over RM49 billion in the past five years. Gains in the market value of Press Metal, Gamuda and Public Bank alone were nearly RM52 billion, but the collective gains were pulled lower by market value declines of Maxis and, to a lesser extent, of IOI Corp and KLK.

Press Metal pays dividends quarterly while Public Bank and Gamuda do so twice a year (see Table 2b). This may have contributed to analysts being overwhelmingly positive on all three stocks, with no “sell” calls on Press Metal and Gamuda and only a single “sell” recommendation on Public Bank, Bloomberg data shows. 

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