At the same time, the residential property sector has been seeing sustained demand recovery since the pandemic lows and is recording the highest sales since the mid-2010s. Property stocks with exposure to Johor did particularly well — as they are expected to also benefit from the rapid transit system connection with Singapore, currently under construction, as well as a more streamlined immigration process that should lead to greater economic connectivity between the island state and Malaysia. Some of these property developers are also gaining from land sales to data centre developers.
So far this year, the Malaysian stock market has been performing better than it has had in more than a decade. At its year-high in May, the FBM KLCI was up by 12%, which was higher than all the annual gains since 2010. Notably, Bursa Malaysia also outperformed many of its counterparts in the region, including markets in Singapore, Hong Kong, Indonesia, Thailand and South Korea. The gains are underpinned by two main, and somewhat related, themes — AI-driven data centre boom and residential property recovery.
Malaysia has been making the news as a rapidly growing data centre hub in Asean, attracting billions of dollars’ worth of investments including from tech giants such as Microsoft and Google as well as local data centre developers like YTL Power. Most of the data centres will be located in Johor. Additionally, the global AI boom is also resulting in some spillover excitement in the local tech sector.
