Going into 2025, AmInvestment Bank is positive in predicting a possible RM1.7 billion annual inflow into the Malaysian stock market, driven by mandatory contributions from the Employees Provident Fund (EPF) for foreign workers.
With 2.5 million non-citizen workers and adjusted contribution rates, this move could have a major impact on the domestic stock market which has been lagging far behind in recent times.
According to the bank's report, this estimate is based on 2.5 million foreign workers, a minimum wage order of RM1,700, and EPF contributions by employees and employers of 11% and 13% respectively.
The report also estimates that 14% of EPF assets will flow into the domestic stock market, as per the 2023 annual report.
Prime Minister Anwar Ibrahim's call to refocus on investments in the local market has given impetus to targeting a net inflow of between RM17 billion and RM23 billion.
This change could change the market strategy, after Malaysia's strong performance in 2024, especially in the technology and plantation sectors.
Will this move revive the growth of Malaysia's domestic stock market?
