This article first appeared in The Edge Malaysia Weekly on November 3, 2025 - November 9, 2025

THE past decade has been a sobering one for Malaysian equities. An investor who bought all 30 FBM KLCI component stocks on June 30, 2015, and held the portfolio until June 30, 2025, would have seen an estimated return of just 24.3%.

To put things in perspective, this translates into an annualised return of only 2.2%, lagging behind conventional fixed deposit rates, which averaged 2.6% over the same period. Simply keeping the money in a bank deposit over the decade would have yielded an even better return.

Notably, the bulk of the investment return from the basket of component stocks came from dividends rather than share price appreciation. Over the 10-year period, the portfolio’s share price fell 11.6% and cumulative dividend returns totalled 35.9%.

The stagnation can be attributed to well-documented factors: the 1Malaysia Development Bhd financial scandal, political uncertainties, a weak ringgit that slid from the RM3 range to above RM4 against the US dollar, a collapse in global crude oil prices from more than US$100 per barrel, and sustained foreign shareholding outflows.

The findings are stark when compared to global benchmarks: the Nasdaq surged 331%, the Standard & Poor’s 500 rose 229%, the Dow Jones Industrial Average gained 190%, while India’s Nifty 50 climbed 223%, Japan’s Nikkei 225 added 125%, Europe’s STOXX 50 rose 90%, and South Korea’s KOSPI advanced 72%. Regionally, the FBM KLCI also lagged behind Vietnam (164%), Indonesia (76%), and Singapore (59%).

Nine of the 30 component stocks invested in in 2015 posted negative returns over the 10-year period. While banks and real estate investment trusts (REITs) provided steady returns — thanks to their dividend-paying capacity — the losses from underperforming stocks significantly diluted overall performance.

The arithmetic of loss compounds the problem. A 50% decline requires a 100% gain to break even; a 90% loss demands a staggering 900% recovery just to return to baseline.

Over the past decade, several FBM KLCI component stocks fell underwater and were subsequently removed from the index. One such example is Vantris Energy Bhd (KL:VANTNRG), formerly Sapura Energy Bhd, a once high-flying oil and gas company. Between June 2015 and mid-2025, its investment value plummeted by 97.31%.

As at end-June 2015, the stock closed at RM2.36 (unadjusted). After a slew of corporate exercises, including a five-for-three rights issue in 2019 that raised RM3.98 billion to cut borrowings and a 20-to-one share consolidation in August 2025, the adjusted price now stands at 55 sen.

The collapse stemmed from internal missteps and external shocks. Sapura’s debt-fuelled expansion in 2013 and 2014, timed at the peak of the oil price cycle, backfired when crude prices plunged from mid-2014. Asset values and project profitability fell sharply, while heavy debt and interest costs strained finances.

To stay afloat, the company raised funds repeatedly. In 2019, Permodalan Nasional Bhd (PNB) injected RM2.68 billion in a RM4 billion rights issue to become its largest shareholder. In 2025, the government stepped in with a RM1.1 billion capital injection via redeemable convertible loan stock.

Sapura Energy posted losses in seven of the past 10 financial years and was removed from the FBM KLCI in late 2016 amid a sharp share price decline.

Another drag on portfolio performance was Astro Malaysia Holdings Bhd (KL:ASTRO), which had been hit hard by digital disruption. Its share price plunged 95.3% over the 10-year period. The paid-TV operator, however, provides regular dividends, totalling 70.75 sen per share, equivalent to a 22.3% return on the initial investment. Even with dividends, investors still faced a 73% loss on Astro shares.

The unimpressive performance reflects a structurally challenged business model and fierce competition from digital streaming platforms. Since peaking in FY2017, revenue has nearly halved, from RM5.61 billion to RM3.08 billion, while net profit fell from RM623.68 million to RM129.15 million. The rise of Netflix, Disney+, YouTube and TikTok steadily eroded Astro’s subscriber base and market share. Content piracy, illegal set-top boxes and rising content costs — exacerbated by a weak ringgit — further weighed on the company.

Astro was removed from the FBM KLCI in June 2018.

British American Tobacco (Malaysia) Bhd (KL:BAT) was another underperformer, weighed down by a structurally declining business. Since FY2015, the company has faced persistent revenue and profit declines, leading to dividend cuts. Its share price fell nearly 93% over the decade, with total investment losses narrowing to 70.73% after accounting for dividends.

BAT Malaysia faces multiple challenges, including rampant illicit cigarette trade, shifting consumer preferences and tighter regulations. Illegal cigarettes — often accounting for more than half the market — offer a cheaper alternative, compounded by repeated excise duty hikes. Rising health consciousness and the growth of the fragmented vape market have further diverted consumers.

Its vape brand, Vuse, saw slow uptake, with regulatory constraints, including advertising bans, limiting its ability to counter these trends. In 3Q2025, BAT Malaysia ceased all sales of Vuse amid new regulations governing such products.

The stock was removed from the FBM KLCI in late 2017.

Investing in Axiata Group Bhd (KL:AXIATA), once seen as a regional champion and dividend stalwart, also proved disappointing. Over the 10-year period, the investment value declined by 47%.

Operating in highly competitive telecom markets across Asia — including Malaysia, Indonesia, Bangladesh, Sri Lanka and Cambodia — Axiata faced margin compression and regulatory risks. Its debt-fuelled regional expansions, aimed at tapping emerging markets’ growth potential, instead exposed the company to fierce competition, shrinking margins and heightened regulatory risks.

Net profit margins, once above 10%, fell below 5% for most of the period after 2015. In 2018, Axiata booked RM5 billion in impairments, including RM3.9 billion from its Indian unit Idea Cellular and RM1.8 billion from its Indonesian arm PT XL Axiata.

In 2023, Axiata posted nearly RM2 billion in losses after exiting Nepal and Myanmar. Rising global interest rates pushed up debt costs, cutting annual dividends from RM1.8 billion to under RM900 million between 2016 and 2020. Investor concerns over leverage and 5G-related capex further weighed on sentiment.

UMW Holdings Bhd lost nearly 41% of its investment value from mid-2015 until mid-February 2024, when it was taken private by Sime Darby Bhd (KL:SIME). In August 2023, Sime Darby announced it was acquiring a 61.18% stake in UMW Holdings from its parent, PNB, for RM3.57 billion (RM5 per share), followed by a mandatory general offer to take the company private.

Despite a strong position in the Malaysian automotive market, with both Toyota and Perodua under its portfolio, UMW Holdings faced significant headwinds in the oil and gas industry, owing to its majority stake in UMW Oil & Gas Corp Bhd (now Velesto Energy Bhd [KL:VELESTO]).

When crude oil prices plunged below US$40 per barrel in 2015, the global oil and gas industry entered a prolonged downturn. Velesto lost its financial footing and urgently needed fresh capital to stay afloat.

UMW Holdings responded with a share distribution exercise, giving 1.03 Velesto shares for every UMW Holdings share held. This allowed UMW Holdings to exit the challenging oil and gas sector while Velesto gained a deeper-pocketed controlling shareholder — PNB — to support its recapitalisation.

UMW Holdings was removed from the FBM KLCI in June 2020.

Investors in Genting Bhd (KL:GENTING) and Genting Malaysia Bhd (KL:GENM) were not dealt a good hand. Over the 10-year period under review, Genting and Genting Malaysia lost 43.67% and 20% of their investment value, respectively, with Genting Malaysia’s smaller decline cushioned by higher dividends, likely reflecting its lower 2015 entry price.

Both companies faced scrutiny over related-party transactions, notably Genting Malaysia’s acquisition of the loss-making Empire Resorts. Genting’s US$4.5 billion Resorts World Las Vegas project, launched in 2014, has underperformed since opening in 2021, while the 2022 liquidation of Genting Hong Kong — a separate cruise business controlled by the Lim family — further eroded investor confidence.

Post-pandemic dividend cuts deepened investor disappointment. Genting’s annual payouts fell from over RM800 million to between RM423.6 million and RM616 million, while Genting Malaysia’s dropped from more than RM1 billion to between RM510 million and RM850 million.

An investor holding Genting Malaysia shares over the 10-year period and accepting Genting’s voluntary takeover offer at RM2.35 per share would have incurred a 9.98% loss after accounting for dividends.

Both companies were removed from the FBM KLCI at end-2024. 

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