A trip down,
Memory lane,
To learn what past,
To inform the future.

Merdeka! Merdeka! Tunku Abdul Rahman chants in Dataran Merdeka, signifying the end of British rule and the start of Malaysia’s independence.

Happy First Birthday, Malaysia (The second one will come on 16 September)! For this article, I find it fit to venture into the past to examine how Malaysia’s stock market looked like in the 1960s.

As all historians say, we need to learn about the past to understand where we came from and to make the best decisions for the future. Most of the information on the 1960s Malaysian stock market is obtained from P.J. Drake (1968) and current information is obtained from Bursa Malaysia.

Without further ado, let’s get to it!

#1: Much more foreign companies in the 1960s

I think this is not that surprising. After all, the development of Malaysia’s stock market started in the 1930s with the involvement of mainly British companies that had mining and plantation interests in Malaysia.

The percentage of foreign companies in the Malaysian stock market came in at 65% in 1964 compared to only 1% in 2023.

There is an interesting historical story here. Foreign companies in Malaysia were prominent right up until the early 1970s when the Barisan Nasional leadership started to incorporate policies that favoured the local Bumiputera population.

The Malaysian government started to take control of foreign companies in the name of national interest. However, it was not until the 1980s during Mahathir’s reign that this trend accelerated with the emergence of big Malay and Chinese businesses (who mainly had strong Malay politicians as their patrons in government) that increasingly took control of the stock market.

#2: The number of listed companies grew by 10 times from the 1960s to 2023

There were 82 Malaysian companies listed on the Malayan Stock Exchange in 1964. Fast forward to 2023, there was a total of 792 companies listed on the Main Board of Bursa Malaysia.

The Malaysian stock market history can be condensed into the following. In the 1960s, essentially, both the Malaysian and Singaporean companies were listed together on the Malayan Stock Exchange.

As Singapore seceded in the mid-1960s, both markets were eventually separated into the Kuala Lumpur Stock Exchange and the Stock Exchange of Singapore in 1973.

In 1988 the second board of the KLSE was established. By now, the number of listed companies in Malaysia has grown to 295. This number would eventually reach its peak of 844 in 2009 during the Global Financial Crisis.

#3: 1960s companies were mainly commodity-based

Here are the figures. In 1964, both plantation (rubber, palm oil, coconut) and mining (tin and other metals) sectors accounted for 34% and 26% respectively of the listed companies.

The industrial & general sector (presumably some trading services companies) account for 34% while the property sector accounts for 6%. Commodity-based sectors (plantation and mining) accounted for the bulk of Malaysia’s listed companies at 60%.

Fast forward to 2023, plantation sector companies accounted for 4%, while energy accounted for 2%, taking the proportion of the commodity-based sector to only 6%. This is a big departure from Malaysia’s heavy dependence on commodities in the past.

The years have seen the sectors of services (consumer products, trading services, transportation & logistics, finance, telecommunications & media, transportation & logistics) account for the majority of listed companies at 43% in 2023.

Industrial companies generally maintained their proportion at about 26%, while the property sector (property, REIT, construction) increased its proportion to 10%.

#4: Surprise, Surprise. Some of the companies listed in the 60s still exist

Old companies tend to be hard to die. That’s true for Malaysia. Some of the companies listed in the 1960s still exist today.

• MBSB: Malaya Borneo Building Society was listed in August 1963, providing financing for houses and seeking about $5 million in funding. In 2023, it is now named Malaysia Building Society Berhad and does a similar function of providing banking services.
• Hume Industries: Hume Industries Malaya Ltd was listed in August 1963 also and was looking for $1.5 million in funding. It is Hume Cement Industries Berhad now.
• Island & Peninsular Development Ltd: I&P was listed in December 1963 and sought out about $15 million in funding. It has since been combined with Pelangi and Petaling Garden to form I&P Group to engage in property development.
• Malayan Cable Berhad: Originally listed in November 1963, it has since been acquired by Tenaga Nasional Berhad and goes under the name of Tenaga Cable Industries Berhad. It produces and distributes power cables.
• Oriental Holdings: Oriental Holdings Berhad still maintains its original name and was looking for $2.6 million in funding back in 1963. It is now engaged in making automotive, plastic, and plantation products, and involved in hotels & resorts, and trading of building material products.

Conclusion

It is quite refreshing to see all the progress that Malaysia has made in its stock markets since independence. One main thing is that the stock market is no longer being dominated by foreign companies and it has become less dependent on commodities. The number of companies listed has also increased dramatically and some old companies still exist from the 1960s showing that Malaysian companies can adapt to the times.

And with that, Happy Merdeka, everyone!