PETALING JAYA: The MY Value Up programme is expected to gradually improve corporate capital allocation practices, although investors may need to remain patient as tangible gains in company valuations are likely to emerge over a longer time horizon.
In the meantime, stock selection is expected to remain centred on companies already demonstrating disciplined capital management and strong shareholder returns.
According to CIMB Research, the reform initiative marks a positive step but requires greater clarity to achieve its objectives.
“Our reading is that the MY Value Up programme is a step in the right direction, but its current design may lack sufficient specificity relative to the scale of the valuation gap it is meant to narrow,” the research house said in its latest report.
It noted that the programme’s voluntary, disclosure-led framework, without fiscal incentives and with only a soft mandatory trigger around end-2027, resembles Japan’s approach more closely than South Korea’s, adding that Japan’s 11-year experience suggests the reforms should be assessed over a multi-year period.
“We are more positive on the Government-linked Enterprises Activation and Reform Programme (GEAR-uP) programme under the Finance Ministry than on MY Value Up’s disclosure mechanics.”
Under GEAR-uP, Malaysia’s six core government-linked investment companies (GLICs) are targeting a RM100bil increase in the market capitalisation of their investee companies over five years while delivering annual shareholder returns of at least 7.5% from RM540bil invested in Bursa Malaysia.
CIMB Research said the initiative offers concrete, capital-backed commitments compared with MY Value Up, where only 19 companies have disclosed quantified forward targets.
“In our view, 2026 to 2027 will be a credibility-building phase for MY Value Up.”
The research house said investors should monitor company-specific milestones, including quantified three-year targets and long-term incentive plan metrics linked to return on equity (RoE) and total shareholder return (TSR), as well as visible capital return initiatives among companies with excess cash.
“Absent that specificity, we would prioritise stock selection towards names already showing capital discipline and value-unlocking ahead of the regulatory timeline, with GLIC-backed names under GEAR-uP as one useful screen.”
Its preferred exposure to the reform themes comprises Telekom Malaysia Bhd
or TM (target price: RM8.10), RHB Bank Bhd (RM8.30), UEM Sunrise Bhd (RM2.25), Sime Darby Property Bhd (SimeProp) (RM2.40) and IJM Corp Bhd (RM3.90).
CIMB Research noted that TM has raised its minimum dividend payout policy to 75%, proposed a share buyback of up to 5% and plans to increase leverage to optimise its balance sheet, while RHB Bank has upgraded its 2026 RoE and dividend payout guidance under its Progress27 strategy; and UEM Sunrise aims to triple RoE by 2030 through faster property development, expansion of recurring income assets and land monetisation.
The research house added that SimeProp’s upcoming Shift32 strategy will broaden its exposure to the real estate value chain through data centres, purpose-built student accommodation and Australia, alongside a focus on quicker-turnaround developments.
It was also positive that IJM has reaffirmed a RM3bil shareholder distribution plan for 2027 to 2029, supported by the proposed listing of its construction business, treasury share distributions, asset monetisation and faster property projects.
CIMB Research, which attended the recent Institutional Investors Council Malaysia Corporate Governance Conference 2026, noted that discussions highlighted that Malaysia’s valuation discount reflects inefficient capital allocation rather than governance shortcomings, with panellists calling for boards to prioritise RoE, TSR and capital returns over compliance while institutional investors take a more active stewardship role.
It was noted that Datuk Rizal Rickman Ramli, the president and group chief executive of Permodalan Nasional Bhd, said that slow growth in earnings per share is due to high spending on capital, issuing new shares, and not fully using their resources.
Datuk Zain Azhari Mazlan, the executive director of corporate finance and investments at the Securities Commission, mentioned that MY Value Up will stay voluntary until at least the end of 2027.
Meanwhile, one analyst told StarBiz that the success of MY Value Up would ultimately depend on whether companies translate disclosure into measurable improvements in capital allocation and shareholder returns.
