How Much of the Malaysian Economy Is Government-Owned

Buy almost any blue chip on Bursa Malaysia and you are, indirectly, doing business with the Malaysian government. The national power grid, the largest bank, the incumbent telco and one of the world’s biggest palm-oil groups all share the same set of ultimate owners: a small cluster of state investment funds that between them steer roughly a quarter of the entire local stock market.

That cluster is the reason “how much of the economy does the government own?” is such a persistent question in Malaysia — and why the answer is neither “a little” nor “most of it,” but something in between that reform programmes keep trying to reshape.

Who actually owns the GLCs?

The confusing part is that the state rarely owns listed companies directly. It owns them through intermediaries. Malaysian policy makes a clean distinction between the two:

• A GLC (government-linked company) is a commercial company in which the government holds a direct controlling stake — its purpose is to make money, but the state can decide its board and direction.
• A GLIC (government-linked investment company) is the federal fund that does the owning — it allocates money into GLCs and other assets on behalf of the public.

There are eight GLICs, usually split into two groups. Four behave like sovereign or strategic funds, and four are institutional savers looking after other people’s money.

GLIC	Type	Assets under management	Share of fund in local listed equities
Employees Provident Fund (EPF)	Institutional investor	RM1.096 trillion	24.4%
Permodalan Nasional Bhd (PNB)	Institutional investor	RM332 billion	74.4%
Kumpulan Wang Persaraan (KWAP)	Sovereign/strategic fund	RM167 billion	45.2%
Khazanah Nasional	Sovereign/strategic fund	RM122.5 billion (portfolio)	—
Lembaga Tabung Haji (LTH)	Institutional investor	RM91 billion	18.3%
Lembaga Tabung Angkatan Tentera (LTAT)	Institutional investor	RM10.5 billion	52%
Ministry of Finance Inc (MoF Inc)	Sovereign/strategic fund	—	—
National Trust Fund (KWAN)	Sovereign/strategic fund	—	—

AUM and equity-share figures for EPF, PNB, KWAP, LTH and LTAT are those given in Deputy Finance Minister Steven Sim’s written parliamentary answer as reported by The Edge; Khazanah’s portfolio value is as at 31 December 2022. The final column is each fund’s share held in local listed equities (distinct from its wider domestic allocation).

The scale gap is enormous. EPF alone — the retirement fund for private-sector workers — manages more than a trillion ringgit, dwarfing every other fund. Khazanah, the one most people think of as “the sovereign wealth fund,” is actually one of the smaller GLICs by assets, though its holdings are among the most strategic.

How big is the government’s slice of the market?

Big enough to move the whole index. When Deputy Finance Minister Steven Sim laid out the numbers in Parliament, six of the major GLICs together held RM451.3 billion in locally listed equities as at 30 September 2023 — equal to 25.6% of Bursa Malaysia’s total market capitalisation.

Their pooled firepower is larger still once non-equity and overseas assets are counted: at the launch of the 2021 PERKUKUH reform initiative, the GLICs’ combined assets under management were put at about RM1.7 trillion (a total that includes far more than just their Bursa shareholdings).

This concentration in listed equities has actually fallen over two decades, even as the absolute numbers grew. Back in 2005, GLCs made up around 36% of Bursa’s market capitalisation and about 54% of the benchmark composite index — meaning more than half the index moved with a handful of state-linked names. The relative share has since drifted down toward a quarter, partly by design and partly because the broader market grew around them.

Where is that ownership concentrated?

Not evenly. GLIC ownership clusters in the parts of the economy that are capital-heavy, regulated, or strategically sensitive — the sectors a government is least willing to leave entirely to private hands.

• Banking and finance — Maybank (the country’s largest bank, controlled through PNB), CIMB Group and RHB Bank are all GLIC-anchored. A decade-long review found GLICs held at least a 30% equity interest in 46 listed companies, with the big banks among the steadiest performers.
• Utilities and energy — Tenaga Nasional runs the national grid; Gas Malaysia and Petronas-linked listed units cover gas and petrochemicals. Utilities are close to a natural state monopoly, so GLIC ownership here is deepest.
• Telecommunications — Telekom Malaysia (the fixed-line and broadband incumbent) and data-centre player TIME dotCom sit alongside GLIC stakes in the mobile operators.
• Plantations — Sime Darby and Boustead Plantations put the state at the centre of Malaysia’s palm-oil economy.

The broad pattern is consistent: the state’s grip is tightest in infrastructure and finance, looser in the consumer-facing and export-manufacturing sectors where private and foreign firms lead.

What did the reform programmes try to fix?

Two big waves of reform bracket this story.

The GLC Transformation Programme (2004–2015). Overseen by the Putrajaya Committee on GLC High Performance (PCG), it put the 20 largest GLCs — the “G20” — through a decade of governance, performance and board reforms. From 14 May 2004 to the programme’s close on 28 July 2015, the G20’s combined market value grew almost three times, from RM133.8 billion to RM386 billion, having peaked at an all-time high of RM431.1 billion on 7 April 2015. It professionalised boards and lifted returns, but it did not shrink the state’s overall presence — arguably the opposite.

PERKUKUH (2021). Launched on 12 August 2021, this initiative set out 20 initiatives to be rolled out through 2024. The stated goals point in the same direction: giving each GLIC a clearer mandate, directing more investment toward catalytic and developmental areas, increasing private-sector participation (“crowding in”), streamlining the government’s role in business, and aligning the funds with national policies such as MyDIGITAL. The unspoken tension is visible in those goals — the same programme wants GLICs to invest more in national priorities while occupying less of the space private firms could fill.

Why does it still matter today?

Because domestic state funds increasingly set the tone on Bursa. As foreign ownership of Malaysian equities has drifted toward record lows, the GLICs’ weight in the market has grown more consequential.

In 2025, six of the GLICs went further, collectively pledging RM120 billion in domestic direct investment over five years, targeting RM100 billion of new market-capitalisation growth and around 7.5% in annual shareholder returns from their roughly RM540 billion in Bursa holdings. They also committed to a RM3,100 monthly living wage for about 153,000 employees across their portfolio — a reminder that these funds are wielded as social and industrial policy tools, not just as investment vehicles.

That dual role is exactly the debate. Supporters see patient national capital funding semiconductors and the energy transition when private money hesitates. Critics warn that a market with a heavy state presence can crowd out private enterprise and mask thin liquidity. Both readings start from the same fact: in Malaysia, the government is not a bystander in the economy — it is one of its largest shareholders.

What’s next

If you want to go deeper, the useful next steps are:

• Read the individual GLIC profiles — Khazanah and EPF behave very differently, and lumping them together hides more than it reveals.
• Track PERKUKUH’s follow-through — watch whether “crowding in” the private sector actually reduces GLIC dominance, or whether pledges like the RM120 billion domestic-investment target deepen it.
• Watch foreign shareholding trends on Bursa Malaysia — the lower foreign participation falls, the more the market leans on state funds, and the more this question matters.
• Check the primary numbers each year via parliamentary answers and GLIC annual reports rather than headline summaries, since the market-cap share moves with prices.