Malaysia Equity Risk Premium
The equity risk premium represents the most critical unobservable input in business valuation and corporate finance. For Malaysia, determining a defensible equity risk premium requires rigorous methodology and cross-validation against established benchmarks. This publication presents our comprehensive assessment of Malaysia's equity risk premium as of 31 December 2025, employing a bottom-up analysis of KLCI constituents.
The Malaysia Equity Risk Premium – January 2026 report presents a forward-looking assessment of a critical input in valuation and corporate finance. Developed through a collaboration between the School of Business and Economics (SBE) of Universiti Putra Malaysia (UPM) and Forvis Mazars in Malaysia, this publication reflects a joint commitment to enhancing the relevance and applicability of financial research within the Malaysian context.
This study adopts a bottom-up, implied approach to estimating Malaysia’s equity risk premium, drawing on market data, analyst expectations and locally grounded assumptions. By incorporating Malaysia-specific dynamics, it provides a complementary perspective to widely used international benchmarks, which may not fully reflect domestic market conditions.
Beyond its methodological contribution, the report is intended to serve as a practical reference for professionals involved in valuation, investment analysis and financial decision-making. It underscores a continued effort to bridge academic insight with industry practice, supporting more robust and defensible financial outcomes.
In a dynamic market environment, the need for credible and context-specific insights continues to grow. This publication reflects the shared commitment of SBE UPM and Forvis Mazars in Malaysia to strengthening financial practice through structured, Malaysia-focused perspectives.
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