Malaysia believes there is a need to revisit commitments to sustainable development, efficient global resources and fair and balanced trade among countries, said the Ministry of Investment, Trade and Industry (MITI).

Its minister Tengku Datuk Seri Zafrul Abdul Aziz said countries must have shared values which will result in trade policies that can contribute to equitable and sustainable development.

“However, this should not be used as non-tariff measures to restrict trade flows.

“The proliferation of trade-related environmental measures such as the threat of environmental, social and governance (ESG) by developed countries is among the most important aspects of international trade,” he said during the meeting of the equitable transition alliance.

The meeting was organised in conjunction with the World Economic Forum held in Riyadh, Saudi Arabia.

Tengku Zafrul said the proliferation of trade-related measures has emerged as potential protectionist tools that could unfairly discourage global production and trade, particularly to the developing countries.

“These measures can manifest as border instruments and compliance with these measures will undoubtedly be complicated and perhaps too costly for most developing country-exporters,” he added.

Tengku Zafrul stressed that leaving the matter unattended could potentially erode developing and least developing countries’ trade competitiveness and investment attractiveness.

Citing a report by the World Trade Organisation, environmental goods and services face an average tariff of 4.3 per cent along with numerous non-tariff measures.

“The cost of compliance, including certification, can be prohibitively expensive, especially for small and medium enterprises from developing nations.

“Such barriers necessitate a collaborative approach where developed countries not only impose these standards but also facilitate the means for compliance through technical and financial support,” he added.

Tengku Zafrul went on to say that in light of the complexities posed by ESG standards as non-tariff barriers and the significant need for capacity building and fair trade policies, a comprehensive approach is essential to ensure both environmental sustainability and economic justice, particularly for developing nations.

“Therefore, Malaysia supports and welcomes discussions on establishing effective multilateral trade rules on trade and sustainable development.

“Our commitment is evident through national policy initiatives such as the New Investment Policy, New Industrial Master Plan 2030, National Energy Transition Roadmap, and the ESG Industry Framework, which all aimed at achieving sustainable economic growth,” he said.

Source: Bernama

Trade-related and ESG measures must be fair to developing countries – Tengku Zafrul

Malaysia’s strong and solid policies has helped it become not only among the world’s most peaceful countries but also among the fastest growing economies, says Prime Minister Datuk Seri Anwar Ibrahim.

Malaysia, he said, adopts a ‘very fierce’ foreign policy that has enabled the country to not only maintain and foster strong bilateral ties with Western superpowers such as the United States (US) and European nations but also China, Japan as well as other leading countries in the Asean region.

“We adopt a very fierce foreign policy on our position to engage and depend on the support, collaboration, investments from the West, the US and Europe.

“At same time, we maintain excellent bilateral relations with South Korea, Japan and more importantly with China, because of the (economic) potential.

“And of course, we have to grapple with sensitive issues, which is not our problem but a problem for others,” said Anwar during the opening plenary session of the World Economic Forum (WEF) Special Meeting in Riyadh today.

It was previously reported that the country’s economy is projected to grow between four per cent and five per cent this year from the continued expansion in domestic demand and improvement in external demand.

Bank Negara Malaysia, in its Economic Monetary Review 2023 (EMR 2023), said possible growth will be driven by resilient domestic expenditure, with additional support from the expected recovery in exports.

Malaysia is the world’s sixth largest semiconductor exporter and holds 13 per cent of the global semiconductor packaging, assembly and testing market.

Over the last 50 years, Malaysia has been involved in the “back end” of the semiconductor manufacturing supply chain namely packaging, assembling and testing chips.

It is now shifting towards the front end of a US$520 billion global industry with higher value activities such as wafer fabrication and integrated circuit design.

On the semiconductor industry, Anwar said Malaysia had in the past always been on the ‘back end’.

“But with new investments coming in from the US, Germany and China, the focus has shifted to the ‘front end’, which means new challenges.

“We have to refocus on issues, technological, technical training and Technical and Vocational Education and Training (TVET), which was somewhat ignored in the past. We have to excel in some of the research areas, which are challenging and new.”

Meanwhile, on another subject, the prime minister said a country cannot progress without good governance and fiscal responsibility.

He highlighted the importance of learning from its previous flaws in order for the country to move forward.

“We have to learn from the flaws of endemic corruption, gross inequality between the rich and the poor, the propensity to adopt unbridled capitalism to the extent that you ignore the plight of the masses deprived of basic opportunities.

“So, we have to steer that policy, the issue of governance or fiscal responsibility.

“At the same time, do not lose sight of the key priorities, which is relevant in this session, such as issue of globalisation,” he said.

On geopolitical issues, Anwar said that despite the complex situation affecting the Middle East, particularly the anger and frustration over the Gaza crisis, the economies of Muslim countries should not be affected.

Anwar also commended Saudi Arabia for hosting the meeting and urged the kingdom to continue playing a role in engaging with developing and emerging economies, especially those within the Muslim community.

“The issue (Palestine) is important and is fundamental to us, but at the same time, we have to survive. The economy has to be strong and the fundamentals need to be built,” he said.

Source: NST

Anwar shares Malaysia’s success story at WEF

Malaysia is on a mission to explore various economic opportunities and attract new investments at the World Economic Forum (WEF) Special Meeting in Riyadh, Saudi Arabia which will last two days starting Sunday.

Prime Minister Datuk Seri Anwar Ibrahim said the Malaysian delegation at the meeting will also share the country’s policies and direction besides emphasising the country’s stance on regional geopolitical issues before world leaders.

“God willing starting today, I along with senior ministers and other Malaysian delegates will attend the conference and hold several important meetings with world leaders and global corporate heads.

“This meeting and conference will, among other things, touch on matters related to national interests, starting with the Opening Plenary session on the theme of New Vision of Global Development this morning where I will deliver a speech,” he said in a post on Facebook today.

Anwar, who arrived in Riyadh at 10.25 pm Saturday local time or 3.25 am Sunday morning Malaysia time, also asked for prayers for the success of the Malaysian delegation in the mission.

Meanwhile, in the same post, Anwar also shared his concerns about the culture of reading materials such as Dewan Masyarakat magazine which is not popular among young people in schools and universities.

“Thinking about finding the best way to invigorate the culture of iqra (reading) and nourish the tradition of aqliyyah (the tradition of knowledge),” he said, who made Dewan Masyarakat a reading material on the flight to Riyadh.

Anwar shared his admiration for the language, the quality of the work and the choice of interesting articles with the theme of ‘argument debate’ which is an effort to encourage fresh discourse based on arguments and facts and reject bigotry and slander.

“Referring specifically to the Dewan Masyarakat, articles on bigoted politics, argumentative debates, review of the book ‘The History of Java’ and the prominence of George Santayana is a careful and valuable treatment. Hopefully it can capture the interest of the audience

“The selected poem ‘Bahasa Tanpa Kasta’ by Abizal (Miri) turns out to flow with clarity of mind, cooling the heart of every human being, crossing the boundaries of continents, ages and eras,” he said.

Source: Bernama

Mission to explore economic opportunities, attract new investments at WEF

Malaysia is making extensive use of the free trade agreements (FTAs) inked with external economies, with a free on board (FOB) value of RM41.03 billion achieved during the first quarter (1Q) of this year, said the Ministry of Investment, Trade and Industry (MITI).

Its minister, Tengku Datuk Seri Zafrul Abdul Aziz, said during the period under review, a total of 85,062 certificates of origin (COs) were issued.

“The COs issued in 1Q is higher than COs issued in the same period of last year, whereby FOB generated last year stood at RM64.38 billion and COs were 82,997,” he told a press conference after announcing MITI’s 1Q report card here today.

The COs allow exporters to enjoy preferential treatment through lower or zero import duties.

Tengku Zafrul highlighted that the top three FTAs benefiting Malaysian exporters are the ASEAN Trade in Goods Agreement, ASEAN-China Free Trade Area and ASEAN-Korea Free Trade Area.

Elaborating further on MITI’s initiatives to enhance trade in the 1Q 2024, the minister said MITI’s agency, the Malaysia External Trade Development Corporation (MATRADE), spearheaded missions to the Arab Health 2024 and Gulfood 2024.

MITI’s trade section, on the other hand, spearheaded the resumption of Malaysia-Republic of Korea FTA which posed benefits for Malaysian exporters.

“We see potential exports of RM291 million, which include 14 companies and 1,077 business enquiries at the four-day Arab Health 2024 healthcare trade show. We joined Gulfood 2024, which has a potential export of RM1.49 billion.

“There were nine memoranda of understanding signed between Malaysian companies and global companies.

“The resumption of the Malaysia-Korea FTA will potentially increase the two countries’ trade and investments in emerging sectors including supply chains, digital economy, bioeconomy, green hydrogen and industrial alleviation,” he added.

Source: Bernama

MITI: Extensive utilisation of FTAs generates FOB worth RM41.03b in 1Q

Investments from Japan to Malaysia are expected to expand further into new areas of retail, green and sustainable energy, digital industry as well as increase in capacity in traditional areas in the manufacturing sector.

Japanese ambassador to Malaysia Katsuhiko Takahashi told Bernama Japanese companies view Malaysia as an attractive investment hub and are eager to do business in Malaysia.

While Takahashi may not be able to divulge the number of Japanese investments coming into Malaysia this year, he said based on recent trends, there will be a growth from an investment inflow of RM5.272 billion last year.

“Japanese companies are attracted to invest in Malaysia based on its cultural diversity, religious tolerance, good command of the English language and no major earthquake, tsunami or other disasters.

“As a result of the Look East Policy, there are many Malaysians that can speak Japanese.”

According to Takahashi, there are now 1,600 Japanese companies operating in Malaysia.

“We are the fourth largest investor in Malaysia after Singapore, Hong Kong and the US.”

He said Japanese firms are interested in expanding into the green energy sector, particularly in addressing climate change, in line with Malaysia’s aspirations to be carbon neutral by 2050.

He said carbon capture, utilisation and storage in clean energy is another potential area that Japan and Malaysia can collaborate.

The retail sector, according to Takahashi, has also attracted Japanese investors with the expansion of retail names such as Jonetz by Don Don Donki concept stores and Tsutaya bookstore.

Source: The Sun

Japan firms eager to do business here: Envoy

The Iskandar Regional Development Authority’s (IRDA) target to achieve cumulative investments of RM636 billion by 2030 is among Iskandar Malaysia’s strategies to assist the country in becoming one of the top 30 global economies and the top 12 in global competitiveness.

Prime Minister Datuk Seri Anwar Ibrahim said that during the same period, IRDA also aims for a gross domestic product (GDP) growth rate of 5.5-6.5 per cent and a GDP per capita of RM58,800.

“I believe that the growth targets for Iskandar Malaysia will also be driven by initiatives such as the Johor-Singapore Special Economic Zone (JS-SEZ) and the Forest City Special Financial Zone,“ he said in a statement on X today.

Earlier today, the Prime Minister chaired the 32nd IRDA Members’ Meeting, which, among other things, examined its future direction as the Corridor Authority and the coordination of the Iskandar Malaysia Comprehensive Development Plan III (2022-2030) under the MADANI Economy agenda.

“The meeting also discussed strategic initiatives to improve the Iskandar Malaysia Investment Service Centre and enhance socio-economic development through equitable job matching,“ said Anwar, who is also the Finance Minister.

He added that this is in line with the government’s decision to restructure the country’s investment promotion agencies, starting with the alignment of functions and roles of investment-related regional economic corridors.

The meeting was also attended by Johor Menteri Besar, Datuk Onn Hafiz Ghazi; Economic Minister Rafizi Ramli; and Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

During the launch of the MADINI Economy in July last year, Anwar said that the government aims to propel Malaysia to become one of the top 30 economies in the world within 10 years, up from its 37th ranking in 2022 based on World Bank data.

The government aims to achieve this by focusing on greater regionalisation and competitiveness, prioritising economic complexity and moving up the value chain.

Source: Bernama

IRDA’s RM636b investment goal to help propel Malaysia into top 30 global economies

The World Bank anticipates that the New Industrial Master Plan (NIMP) 2030 will expedite a rise in private investments in Malaysia, as the long-term pattern has indicated a decline in numbers.

The World Bank’s Malaysia Economic Monitor reported that Malaysia recorded net foreign direct investment (FDI) inflows of RM 39.5 billion for 2023.

Its lead economist for Malaysia Apurva Sanghi said the significance of assessing the long-term trend is due to the reduced public and private investments.

“NIMP 2030 is seen as a driver to increase the FDI/GDP ratio, provided it is implemented well, including paying attention to opening up certain service sectors that are more restricted in Malaysia than in comparable countries,” he told Bernama after a media briefing to launch its Malaysia Economic Monitor themed “Bending Bamboo Shoots: Strengthening Foundational Skills” here today.

Apurva emphasised that Malaysia should proactively liberalise services, which will be the key to NIMP’s successful execution.

During the briefing, Apurva said the World Bank has maintained Malaysia’s economic growth forecast at 4.3 per cent this year, driven by domestic consumption.

“Public consumption will contribute 0.4 per cent to the real GDP while private consumption is at 3.4 per cent whereas net exports see a 0.4 per cent contraction,” he said.

He explained that growth in Malaysia’s FDI position slowed to 5.4 per cent in 2023 (2022: 12.4 per cent), which is in line with Asean’s FDI trends in 2023.

“East Asia and the Pacific were the main contributing region, with Singapore and Hong Kong contributing 55.7 per cent and 39.2 per cent of the increases in net FDI inflows,” he said.

East Asian and Pacific countries grew faster than the rest of the world in 2023, albeit slower than in the pre-pandemic period.

The ongoing recovery in tourism benefitted the region, he said. 

Source: Bernama

World Bank: NIMP 2030 to accelerate net FDI inflow into Malaysia

The KL20 Summit 2024 is strategically designed to introduce significant reforms, aimed at attracting high-quality, high-value investments from across the globe, while concurrently empowering local entrepreneurs to go global and seize emerging opportunities.

Prime Minister Datuk Seri Anwar Ibrahim noted that Malaysia’s stable government and good governance, pro-trade legacy and neutral stance meet the demands of trading partners at a polarising time.

Anwar, who is also Finance Minister, said the summit marks a comprehensive effort to catalyse the technology ecosystem.

“KL20 fits strategically into the central governing economic philosophy of this government, under the MADANI Economic Framework.

“(This is) underscored by the principle that economic growth and distribution are compatible and that government correction must be in harmony with market forces,” he said during the official opening ceremony of KL20, here today.

He said technology has been a societal equaliser and productivity booster, providing jobs and livelihoods that did not exist previously.

“While we acknowledge the unintended consequences of technology and unbridled growth of ventures, we once again see a synthesised position in the middle: embrace technology while upholding the duty to our country, environment, and the global community,” he added.

Meanwhile, Anwar noted that the continuing trend of confidence from investors in all parts of the start-up ecosystem gives a real chance for Malaysia to create cutting-edge technology ventures.

He announced that 12 international venture capital firms will be setting up offices and new funds in Kuala Lumpur, with assets under management worth billions and illustrious investment track records.

Additionally, a number of high-tech companies will set up operations, research and development facilities, as well as regional headquarters to serve the Asian and Southeast Asian markets.

As for the semiconductors sector, he said Malaysia’s substantial hold on the backend has made it conducive to pursue high-value front-end work, chiefly in the integrated circuit (IC) design category.

To this end, he announced plans to build Southeast Asia’s largest IC Design Park, which will house world-class anchor tenants and collaborate with global companies such as British chipmaker, Arm Holdings.

“This is done with the backing of the Selangor Information Technology and Digital Economy Corporation (SIDEC) and the Selangor state government.

“Additionally, to make Malaysia a true gateway to major economies, we will also witness the city-to-city connection between Kuala Lumpur and Hangzhou so that the capital, talent, and market access will no longer be a barrier to success,” said Anwar.

He added that the government is positioning Malaysia as an axis for leaders in semiconductors, clean energy, agritech, and Islamic fintech.

“Doubling down on our edge will tap into the higher value effort necessary to create new growth verticals and transform our fortunes,” he added. 

Source: Bernama

KL20 Summit 2024 to attract high-quality investments – PM

Prime Minister Datuk Seri Anwar Ibrahim said Malaysia has gained world attention as a premier investment destination due to its political stability and clear economic policies.

Anwar said policies such as the Digital Transformation, National Energy Transition Roadmap and New Industrial Master Plan 2030 are helping investors see the country’s strengths.

“Malaysia is now attracting investments from companies like Infineon, Nvidia and dozens more, requiring around 30,000 engineers that we cannot fully fulfil.

“Therefore, the focus of parents and Malay children must be in the fields of science and mathematics and TVET (Technical and Vocational Education and Training), which are being vigorously pursued by Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi to enhance their capabilities,“ he said.

He was speaking at the Melaka state-level Aidilfitri MADANI 2024 celebration at the Melaka International Trade Centre (MITC) in Ayer Keroh here tonight.

Also present were Melaka Yang Dipertua Negeri Tun Mohd Ali Rustam, Ahmad Zahid and Chief Minister Datuk Seri Ab Rauf Yusoh.

Therefore, Anwar called on all parties at all levels to make changes in attitude and mindset to prevent the country from falling behind in various aspects.

“I truly hope there will be a change in attitude and mindset. If not, we will lag behind because we are fighting and quarrelling over small matters at the expense of the core issues. We will not only fall behind among competing races but also among developed countries.

“I don’t want our people to be left behind because we are grappling with trivial matters, and we will be defeated in this competition,“ he said.

Anwar said the government intends to establish a new faculty based on AI at Universiti Teknologi Malaysia (UTM) following his previous meeting with a Taiwan-based company.

Source: Bernama

PM: Malaysia gains prominence as investment destination due to political stability

Japan looks to forge a closer relationship with Malaysia in line with a new chapter of the Look East Policy (LEP) based on the current economic and social situation.

Japanese Ambassador to Malaysia Katsuhiko Takahashi said while the LEP has made a significant contribution to shaping the Malaysian automotive industry, there is now a need to move into new emerging industries, such as healthcare for the ageing society and disaster prevention, in which Japan has the expertise.

“The LEP started 42 years ago with the sending of students and trainees to Japan to bring back their know-how and expertise from Japan to be implemented in Malaysia for economic development.

“This relationship was created based on the exchange of people and has become a strong foundation for the Japan-Malaysia relationship.

“Now, we are looking at new economic areas for Japan to further collaborate which include cyber security, information technology, resilience of supply chain and energy transition,“ he said in an interview with Bernama.

He elaborated that Japan is also keen to enhance cooperation in artificial intelligence, robotics and green technology, as well as technology that addresses climate change.

According to Takahashi, the policy will also need to move in line with recent developments in the Malaysian economy, which has experienced remarkable growth.

“We can now work as a partner on equal footing in both the public and private sectors,” he said.

He stressed that this is also in line with the elevation of the strong bilateral relations of both countries to a Comprehensive Strategic Partnership (CSP) that was announced in December last year during Prime Minister Datuk Seri Anwar Ibrahim’s visit to Japan.

The CSP, he noted, covers a wider range of issues that include peace and security cooperation, economic prosperity, science, technology, innovation and environment, society, cultural and people-to-people exchange, as well as regional and global cooperation.

Takahashi described the bilateral relations between Japan and Malaysia as a big river that flows and expands smoothly, premised on 67 years of diplomatic and economic ties that can be developed wider and deeper to benefit both nations.

“Since the Malaysian independence, we have (established) good relations, and the cooperation through Asean and enhancing relations through the LEP have contributed a lot in strengthening the Japan-Malaysia relationship,“ he said.

Cooperation through Asean and Regional Initiatives

Takahashi said this is because Japan fully supports Asean initiatives as espoused during the 50th year of the Asean-Japan Friendship Cooperation celebration last year in four areas under the Asean Outlook on the Indo-Pacific (AOIP) framework.

The AOIP is an Asean initiative to promote collaboration in the Indo-Pacific region and covers cooperation in maritime, connectivity, United Nations Sustainable Goals 2030 and economic as well as other possible areas of cooperation.

“For Malaysia and Japan, our common areas are that we are maritime nations, surrounded by the sea and prosper through free trade and the rule of law, and therefore we are looking forward to enhancing collaboration in these areas as well as security in the region,” according to Takahashi.

Malaysia and Japan have established economic partnerships via the Malaysia-Japan Economic Partnership Agreement, Malaysia’s first comprehensive trade agreement that came into force on July 13, 2006.

Subsequently, the Asean-Japan Comprehensive Economic Partnership agreement came into force for Malaysia on Feb 1, 2009, and includes market access through lower tariff concessions and rules of origin.

Similarly, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership and the Indo-Pacific Economic Framework for Prosperity initiatives also enhance regional economic cooperation for both countries.

“Japan and Malaysia can also cooperate together to provide development assistance to other countries that need assistance like Afghanistan, any country in Africa, or Palestine,” he said.

Source: Bernama

Japan looks to forge deeper cooperation with Malaysia – Ambassador

The Ministry of Investment, Trade and Industry (MITI) is optimistic that South Korea will climb up the ranks as among the main sources of foreign direct investments (FDI) into Malaysia soon.

This is because most of the investments from South Korea are in the chemical and petrochemical sector, which is one of the focus sectors under the New Industrial Master Plan (NIMP 2030), said its minister Tengku Datuk Seri Zafrul Abdul Aziz.

He said that of the 11 priority segments, the chemicals segment has been identified as one of the high-impact, high-growth sectors that would contribute to the NIMP 2030 overall targets.

“The specialty chemicals market is substantial. And there is an opportunity for Malaysia to capture that business by producing specialty chemicals domestically, capturing both domestic market demand and export opportunities.

“Our strategies are also laid out in our Chemical Industry Roadmap 2030, which aims for our chemical industry to be ranked first in Asean in terms of FDI inflow by 2030,“ he said in his speech during the launch of the new OCI Holdings regional headquarters here today.

In 2023, the country’s main sources of FDIs were Singapore, the United States, China and Japan.

Tengku Zafrul said that collectively, since 2017, OCI Malaysia (OCIM) and its joint venture partners have committed close to RM16 billion in Malaysia.

“We value your support in helping us develop greater industrial linkages domestically and abroad.

“We also appreciate OCIM’s latest investments amounting to RM7 billion, which I was informed will be used to produce polycrystalline silicon for semiconductor and solar cells as well as epichlorohydrin (ECH).

“The manufacturing of ECH in Malaysia will strengthen the value chain of epoxy manufacturing, contributing towards increasing the competitiveness of the chemical industry in Malaysia,” he said.

South Korea-based energy and chemical company OCI Holdings has announced the official opening of its regional headquarters here, marking a significant milestone in its commitment to expand its presence in the region.

OCI Holdings chairman Lee Woo Hyun said the new OCI M Sdn Bhd office is located in a thriving economic hub in Southeast Asia and will serve as a pivotal centre for the company’s operations, facilitating closer collaborations with stakeholders, partners, and clients across the region.

Tengku Zafrul said OCI’s move reaffirms the nation’s attractiveness as a preferred destination for foreign investment and underscores the confidence that global companies have in the economy, infrastructure, and skilled workforce.

“It demonstrates our country’s ability to provide a conducive environment for companies to thrive, innovate, and expand their operations,” he said.

Source: Bernama

MITI optimistic South Korea to be among main sources of FDI into Malaysia – Tengku Zafrul

The Invest Malaysia Facilitation Centre (IMFC) will play a crucial role in the economic development of Johor, says Datuk Onn Hafiz Ghazi.

The Johor Mentri Besar said establishing the IMFC was among the issues discussed with Prime Minister Datuk Seri Anwar Ibrahim on Thursday (April 18).

“Three matters were discussed during the special Johor development meeting chaired by Anwar in Forest City.

“They are the Johor-Singapore Special Economic Zone (SEZ), Special Financial Zone (SFZ) and the establishment of the IMFC.

“We discussed various details, including the current development of the SEZ’s draft policy; investment prospects; location of choice; and suitable investment initiatives and packages to be offered,” he said in a Facebook post on Friday (April 19).

He added that the main objective of the initiatives was to ensure that Johoreans and Malaysians are given better job opportunities.

“On top of that, the establishment of the IMFC as a one-stop facilitation centre, which provides consultation services and to ease business affairs, is also very important,” he said.

Malaysia and Singapore signed a memorandum of understanding to set up the SEZ on Jan 11.

The IMFC one-stop centre is one of the initiatives that Malaysia and Singapore agreed to look into to support the SEZ.

Other initiatives include the implementation of a passport-free QR code clearance system on both sides and adopting digitalised processes for cargo clearance at land checkpoints.

Source: The Star

Invest Malaysia Facilitation Centre a crucial cog in Johor’s development, says MB

Malaysia has demonstrated its ability to turn approved investments into actual investments, with as much as 78.7 per cent of the total approved investments from 2018 to June 2023 already realised, said Malaysian Rating Corporation Bhd (MARC).

With the New Industrial Master Plan (NIMP) 2030 expected to attract more foreign investments, attaining net benefits from external collaborations towards higher value-added exports should be prioritised, it said in a statement today.

MARC noted that the materialisation of foreign investments over time will raise Malaysia’s net foreign direct investment (FDI) inflows-to-GDP ratio, which, at 3.6 per cent as of 2022, is ahead of most of its peers in the region.

“Facilitating technological diffusion requires absorptive capacity supported by well-designed investment policies, high quality infrastructure and continuous human capital investment.

“This is required to facilitate the timely implementation of approximately RM188 billion worth of approved foreign investments in 2023, a 15.3 per cent increase over those recorded in 2022,” it said.

According to MARC, Malaysia’s medium- and high-tech exports as a share of total manufacturing exports (ME) declined from 76.4 per cent in 2000 to 62.0 per cent in 2021, due to regional competition.

Additionally, there has been a decline in the attractiveness of Malaysia’s exports, alongside receding interest in the country as a base for outsourcing, it added.

“In response to these challenges, the NIMP 2030 outlines medium-term strategies to progress towards producing high-value and competitive goods, building upon past industrial master plans that have developed a mature yet recently plateaued electronic industry.

“While the goal includes increased employment, higher wages and greater value add in the manufacturing sector, successful execution remains a key challenge,” it said.

Source: Bernama

Malaysia capable of turning approved investments into actual investments — Rating agency

The government is looking at the need to formulate policies and amend any relevant legislation so that Malaysia is always investor-friendly and can support the development of artificial intelligence (AI) infrastructure, said Prime Minister Datuk Seri Anwar Ibrahim.

However, he said data security should be given priority.

“Malaysia needs to quickly adapt the current economic landscape to continue to grow so that it is always competitive in the region by attracting investment from companies in the technology, AI and blockchain sectors,” he said in a post on Facebook today.

He noted that Malaysia has the National Artificial Intelligence Roadmap 2021-2025 and National Blockchain Technology Roadmap 2021-2025 that have the potential to accelerate the adaptation of AI in the public and private sectors.

“The Madani government is committed to driving the development of the country’s economy, especially in high impact and innovation sectors and providing a conducive business environment,” he said.

The prime minister made these remarks following a discussion held virtually this morning via video conference with Tools for Humanity (TFH) company co-founders Sam Altman and Alex Blania, as well as Ole Ruch from Nordstar.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz and Digital Minister Gobind Singh Deo also participated in the meeting.

The discussion of around 30 minutes touched on several matters related to the rapid development of technology.

“TFH also informed the development of the Worldcoin project, the latest initiative related to identity and the global and inclusive financial network by prioritising the characteristics of confidentiality and providing protection to private information,” Anwar said.

Source: Bernama

Govt mulls investor-friendly policies that support AI development

Nine in 10 investments in Penang announced by the Malaysian Investment Development Authority (Mida) have been realised within a few years, said Penang Chief Minister Chow Kon Yeow.

He said the realisation rate of investments in Penang is high at between 85 per cent and 90 per cent.

“I would say that investments that were announced in Penang are realised 90 per cent of the time, such as this facility by LEM Malaysia, the groundbreaking ceremony was held two years ago and today, it is the opening of the plant,” he said at the official opening of LEM Malaysia’s first facility in Malaysia at Penang Science Park here.

Chow said the strong supply chain in Penang will benefit investors and new multinational companies (MNCs) setting up here.

“The presence of MNCs such as LEM will also enhance the local supply chain,” he said.

He said the manufacturing sector in Penang is the largest contributor to the state’s economic growth.

The state recorded RM63.4 billion in approved manufacturing investments last year, topping the list nationwide.

He said the state’s electronics and electrical products sector also remained the top in the state, with RM54.7 billion in approved manufacturing investments last year.

“To solidify Penang’s position as a hub for advanced manufacturing, the state government has placed a special emphasis on attracting companies with strong commitments to developing cutting-edge technologies and sustainable investing,” he said.

He said Penang will remain committed to sustaining the manufacturing ecosystem in the state to support the needs of industrial players in next-generation technologies.

Source: Malay Mail

Majority of investments announced in Penang realised, says Kon Yeow

Johor is expected to become the most advanced state in Malaysia in the next two years following the establishment of two special economic zones (SEZ), said Prime Minister Datuk Seri Anwar Ibrahim.

He said that the Johor-Singapore Special Economic Zone (JS-SEZ) and the Forest City Special Financial Zone (SFZ) will drive the country’s economic growth further.

“These two special economic and financial zones will drive the country’s economic development more rapidly.

“There is no target at the moment, but the most important thing is that these two zones exist to assist

“The economic growth in Johor is expected to pick up at a faster pace compared to other states in the next year or two,” Anwar told reporters after attending the state-level 2024 Madani Aidilfitri celebration held at the Angsana Mall Johor Baru here today.

Present at the event were Defence Minister Datuk Seri Mohamed Khaled Nordin and Johor Menteri Besar Datuk Onn Hafiz Ghazi.

The Johor 2024 Madani Aidilfitri celebration is jointly hosted by the Defence Ministry and the state government.

Anwar, who is also the finance minister, had earlier chaired the Johor state development meeting at Forest City in Iskandar Puteri.

In his speech, Anwar said the existence of the special economic and financial zones is a sign that Johor is poised to record very rapid growth soon.

“The past year has been a good year for Johor.

“Not only is the Yang di-Pertuan Agong Sultan Ibrahim, who is also the 17th Agong, from this state, but it is also led by young leaders. They have managed to develop Johor well and the state’s economic development is among the best in the country,” he said.

In January, Anwar and his Singaporean counterpart Lee Hsien Loong witnessed the signing of the JS-SEZ Memorandum of Understanding (MoU) between the two countries.

The idea of establishing the zone was first mooted by Economy Minister Rafizi Ramli after a meeting with the Johor government in Iskandar Puteri last May.

Following the meeting, both Malaysia and Singapore agreed to establish a special task force to study the viability of establishing the special economic zone.

Last September, Onn Hafiz said the establishment of the JS-SEZ would be modelled after the Shenzhen Economic Zone in China, which managed to record a Gross Domestic Product (GDP) of RM1.93 trillion in 2021.

Last August, Forest City, a mixed development mega project on four artificial islands in Johor’s western waters, was announced as an SFZ.

The designation will see more than 2832.79 hectares in Forest City allocated to the SFZ as part of foreign investment to boost the economic development of the area.

Source: Malay Mail

PM Anwar: Special financial and economic zones to drive Johor’s growth further

High-impact projects such as the Johor-Singapore Special Economic Zone (JS-SEZ) and Special Financial Zone (SFZ) in Forest City can spur Johor’s economy to outpace that of other states in the next one to two years, said Prime Minister Datuk Seri Anwar Ibrahim.

“Both JS-SEZ and SFZ will ensure a more rapid growth (for Johor). They are still being formulated but will help in accelerating the economic growth,” he told reporters during the Johor-level MADANI Aidilfitri celebration at Padang Begonia, Angsana Johor Bahru Mall, here today.

Also present were Defence Minister Datuk Seri Mohamed Khaled Nordin; Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz; Johor Menteri Besar Datuk Onn Hafiz Ghazi; Deputy Works Minister Datuk Seri Ahmad Maslan; and former Deputy Prime Minister Tun Musa Hitam.

Earlier in his speech, Anwar said Johor continues to drive growth and record among the best progress and development in Malaysia.

“We are establishing a special economic zone that can develop a close relationship with Singapore and we are setting up a special financial zone in Forest City. These indicate that Johor will record a very rapid growth,” he said.

He noted that Johor also has a low hardcore poverty level with fewer than 2,000 individuals, and this can be resolved in the short term with hardcore poverty being abolished in the state.

In addition, other programmes such as flood mitigation are also prioritised to address problems that are faced by the people.

“We cannot just strive for big growth. Floods are also sizeable so the flood mitigation programme is given priority. I want the leaders and officials to monitor to ensure that the project is carried out swiftly so that the problem faced by the people is resolved,” he said.

Therefore, he added, leaders in Johor must ensure the state’s administration is free from corruption and the people’s interest is safeguarded.

Meanwhile, Anwar said the development in any state should be in tandem with the human development so that the people’s well-being is safeguarded.

“Do not focus (just) on buildings, industries and highways, while trivialising people.

“What is the meaning of development if we neglect the poorest people who lack opportunities, whether they are Malay, Chinese, Indian or Orang Asli? They are all Johoreans and must be given a place and afforded the utmost protection,” he added.

Some 5,000 people attended the celebration organised by the Defence Ministry together with the Johor state government as host.

Johor is the first of seven states to hold the Aidilfitri MADANI 2024 celebration, to be followed by Sabah (April 20), Melaka (April 22), Kelantan (May 2), Kedah (May 4), Penang (May 5) and Terengganu (May 9).

Former deputy prime minister Tun Musa Hitam, who celebrates his 90th birthday today, was also honoured at today’s event.

Source: Bernama

PM: JS-SEZ, SFZ can help Johor surpass other states economically

Sabah received investments amounting to RM11.34 billion last year, the seventh highest in Malaysia, said the Yang diPertua Negeri Tun Juhar Mahiruddin.

He said of that amount, RM1.51 billion was from the manufacturing sector which was very encouraging and underscores the sector’s growth and importance as a state economic driver.

Citing SK Nexilis Malaysia Sdn Bhd as an example, he said the company invested RM300 million via subsidiary Curix Sdn Bhd to manufacture copper granules in its Kota Kinabalu Industrial Park factory.

“The State Government will empower the manufacturing investment task force in 2024 to realise and accelerate all approved investments.

“Industrialisation and investments continue to drive the state’s economy,“ he said in the State Government policy speech at the 16th Sabah State Legislative Assembly opening here today.

Tun Juhar said focus will continue to be given to implement initiatives to raise investor confidence in green technology products, biomass and mineral resources downstream sector, food processing and manufacturing, and medical devices sector.

“Other initiatives include drawing up and implementing the policy direction for the manufacturing sector, including preparing a development master plan for two new industrial parks in Kota Belud and Kimanis, and implementing Sabah’s Oil Palm Biomass Industry Policy,“ he said.

He said the Sabah government collected revenue totalling RM6.974 billion in 2023, the highest in history, surpassing 2022’s record collection of RM6.960 billion.

Apart from manufacturing, he said the tourism sector showed encouraging recovery in 2023 with tourist arrivals rising to 2.61 million versus 1.72 million recorded in 2022.

Tun Juhar said the state government is targeting three million arrivals this year and will accelerate implementing various high-impact initiatives and programmes including incentivising industry players.

“The State Government will continue its aggressive tourism promotion and marketing campaign by focusing on various high-impact and high-visibility programmes to develop high-yielding niche market segments.

“The state government has also focused on developing and providing infrastructure and facilities in tourism areas, especially outside the city, including Sabah Parks and Sabah Museum areas to prepare for the Visit Malaysia Year 2026,“ he said.

Source: Bernama

Tun Juhar: Sabah receives RM11.34b investments in 2023

The Johor-Singapore Special Economic Zone (SEZ) is set to catalyse equity valuations in both Malaysia and Singapore under five themes.

These themes, as identified by Maybank Investment Bank (Maybank IB) Research, are optimising hinterland access; stimulating north-south supply chain shifts; fast-tracking the net-zero transition; expanding infrastructure and property investments; and broadening the small and medium enterprise or SME economy.

Among the sectors that could benefit are banking; property and real estate investment trusts (REITs); industrials; renewables; technology; and telecommunications, according to the brokerage.

“While details are limited, early official statements point to SEZ initiatives focused on better cross-border integration, foreign direct investment facilitation, talent development and entrenching renewables,” Maybank IB Research said in its report yesterday.

Maybank IB Research pointed out that the SEZ could create a regionally differentiated value proposition by its combination of capital access, infrastructure and policy stability.

It noted multiple sectors across Malaysia and Singapore would stand to benefit from the SEZ initiatives.

“Banks are key given already entrenched cross-border positioning, enabling share gain from higher wholesale and retail credit demand and fees from trade.

“Increased infrastructure investments as well as housing and commercial facilities demand could be a boon to Singapore and Malaysia property developers and REITs,” it explained.

“Data centre establishment should be positive for Singapore and Malaysia telecommunications as well as Singapore and Malaysia electronics manufacturing players.

“Increased renewable capacity should spur Singapore industrials and Malaysia renewables,” it said, adding easier travel could ease labour pressures and widen the mass market for Singapore gaming.

Maybank IB Research said its SEZ dozen top picks are those that could potentially see earnings and multiple upgrades from their medium-term gearing to the five investment themes.

Of the brokerage’s SEZ dozen picks, the six that were listed on Bursa Malayia were Axis-REIT, CIMB Group Holdings Bhd, ITMax System Bhd, Solarvest Holdings Bhd, S P Setia Bhd and Telekom Malaysia Bhd.

The remainder were Singapore-listed companies, namely, Frasers Capital Trust, Frencken Group Ltd, Genting Singapore Ltd, OCBC Bank Ltd, Sembcorp Industries Ltd and Singapore Telecommunications Ltd.

The economies of Singapore and Malaysia are already closely integrated, Maybank IB Research said, noting Singapore accounted for nearly 25% of Malaysia’s foreign direct investment (FDI), and it is Malaysia’s second largest trading partner.

“Globally, SEZ’s success is determined by right locations, smooth logistics and strong policy frameworks. Historically, entrenched ties between Johor Baru and Singapore already augment the locational advantage,” it said.

“Now a robust policy framework needs to be established that backs easier movement of capital and people.

“This should bolster Singapore’s role as a financial centre and logistics hub. Concurrently, Johor Baru could unlock substantial value from its access to land, labour and energy,” it added.

The SEZ could make it easier and more attractive for Singapore companies, multinationals and SMEs to invest in Johor, and it can also complement and sharpen Singapore’s FDI competitiveness.

Similarly, investors will have access to Singapore’s world-class financial centre and logistics infrastructure, as well as Johor’s more affordable labour pool, abundant land and cheaper energy resources, Maybank IB Research said.

Source: The Star

SEZ set to catalyse equity valuations

Malaysia’s trade and investment prospects with Singapore will likely be bolstered with the passing of the republic’s leadership from Prime Minister Lee Hsien Loong to his deputy Lawrence Wong.

Economists contacted by Business Times also said Singapore was expected to use Johor even more to support its investments in the country, particularly given the republic’s good relations with His Majesty Sultan Ibrahim, King of Malaysia.

Lee, 72, is stepping down on May 15 after two decades in office, handing the reins over to  Wong, 51.

Malaysian Institute of Economic Research economist Dr Shankaran Nambiar expects Wong to continue Lee’s policies, particularly when it comes to trade and investment.

The emphasis will continue to be on growth, and that will mean ensuring that trade and investment are given serious consideration, Shankaran added.

“Therefore, Wong is expected to devote more attention to attracting foreign direct investment (FDI) and keeping the growth numbers on track. This will be more pronounced given the challenging external environment. 

“Singapore will want to deepen trade relations, although Malaysia’s exports are already being re-exported via Singapore,” he told Business Times.

Nambiar highlighted that given the good relations the King has with the government of Singapore and since Johor is a convenient hinterland for Singapore’s investments, one can expect greater use to Johor to support Singapore’s investments. 

This may take the form of housing and land development, but it will also extend to the location of investments in Johor.   

Wong might also see value in being a partner in Johor’s development as a hub for service providers, he said.

Singapore Institute of International Affairs senior fellow Dr Oh Ei Sun said the bilateral trade and investment relations had remain very stable over many leaders on both sides.

So, he noted that it would continue into the future under Wong’s administration.

“Singapore has an established and tested set of domestic and foreign policies. But it is also famous for being pragmatic and innovative.  The persistent global economic slowdown affects not only Singapore but all trading nations in Southeast Asia. 

“So, all of us would have to figure out how to transform our economies into more resilient ones and Singapore is usually the leading example in this,” he added.

The total trade between Malaysia and Singapore for the first half of 2023 amounted to US$301.2 billion (about RM1.29 trillion), reflecting a 4.6 per cent decrease compared to the same period in 2022.

Singapore and Malaysia were each other’s second-largest trading partners in 2022, with bilateral trade reaching U$83.53 billion. 

Singapore also ranked as one of Malaysia’s top sources of foreign direct investment, contributing 8.3 per cent to Malaysia’s total investments in 2022.

Early this year, Malaysia and Singapore signed an agreement to work together on the creation of the Johor-Singapore Special Economic Zone to be located in the state of Johor.

Additionally, both countries are also working on the proposed high-speed rail project that would connect Malaysia to Singapore. The project is currently being revived after being cancelled in 2021.

Meanwhile, Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan said there would not be much difference in trade and investment relations with Singapore under Wong.

He noted that however, Wong represents the fourth generation, which is a departure from Lee’s generation and therefore, his administration style will likely be significantly different.

“More importantly, Wong needs to demonstrate his capacity to serve as PM, and he doesn’t have much time, perhaps less than a year before the general election in Singapore, possibly by the end of this year or early 2025. 

“To prove his capability, he will likely adopt a stricter approach and prioritise policies that benefit Singapore over its neighbors. This marks a notable difference, particularly in the context of relations with Malaysia and Singapore,” he added.

With Wong assuming office on May 15, Azmi said the era of Lee Kuan Yew’s family legacy in the political arena comes to an end. 

However, he noted that we must pay attention because Wong needs to demonstrate his ability to lead Singapore toward a better future. 

While Wong has displayed leadership as the deputy prime minister, these instances occurred under Lee’s administration.

“When a leader needs to establish their capabilities, they may implement policies that prioritise Singapore’s interests over those of its neighbours. It’s worth noting that Wong wasn’t the first choice to succeed Lee Hsien Loong, adding more pressure on him,” he said.

Source: NST

Incoming Singapore PM may use Johor as launch pad for more investments, says analyst

The Johor government approved RM113.7 billion in investments in the last two years, which is almost 20 per cent of the country’s total approved investments in the same period.

Johor Menteri Besar Datuk Onn Hafiz Ghazi attributed the state’s strategic and robust location as the main factor in achieving the investments.

Between 2022 and 2023, Malaysia’s overall approved investment was RM597.2 billion.

“In a post-Aidilfitri discussion today, the main focus was on the Johor-Singapore Special Economic Zone (JS-SEZ) implementation efforts,” read a post on Onn Hafiz’s Facebook.

A dialogue session with state-based industry players discussed several efforts, including incentives, potential sectors and areas that could be offered the opportunity to conduct their business and operations in the JS-SEZ.

The menteri besar is committed to replicating the Shenzhen-Hong Kong SEZ achievements in the state.

“To achieve Shenzhen’s success in becoming a thriving SEZ, all industry players must share the same agenda within a broader framework.

“We must ensure it is beneficial to the people, too, enjoys economic growth, while creating job opportunities,” he added.

The discussion was attended by state executive council members, Iskandar Regional Development Authority and Malaysian Investment Development Authority representatives, among others.

Source: NST

Johor govt approved RM113.7 billion in investments in last two years, says MB

The positive outlook and overweight ratings in the construction sector following the rollout of infrastructure projects nationwide continued to lift market sentiment.

As we enter the second quarter of 2024 (2Q2024), Budget 2024’s RM90 billion development expenditure allocation to fund projects should drive contract flows this year.

The projects include the Penang LRT, Pan Borneo Sabah Phase 1, MRT3, large-scale flood mitigation projects, Sabah-Sarawak Link Road, Kuching Urban Transportation System-Green Line, and water-related projects. Contract awards are expected to be forthcoming in the first half of this year.

Research houses RHB Investment Bank Bhd, Kenanga Research, Hong Leong Investment Bank (HLIB), and Rakuten Trade Sdn Bhd are broadly optimistic about the industry.

There are also plans to reinstate five more LRT3 stations in the Klang Valley. As for MRT3, the government is acquiring land with notifications of the identified land expected to kick in 2Q2024, finalised in the third quarter, and awards handed out starting 4Q2024.

Still along the public transportation vein, the Johor government will submit its proposal in late November 2024 to the Federal Government for Johor Bahru LRT to have three lines.

While there is much focus on the rail lines, some contractors are also hoping to strike gold in renewable energy-related initiatives such as the Corporate Green Power Programme.

Johor is also being touted as the fastest-growing data centre market in Southeast Asia. With all these goodies coming out, HLIB said they should drive contract flows this year.

RM70 billion budget allocation

Meanwhile, Master Builders Association Malaysia (MBAM) president Oliver HC Wee told Bernama that the budget allocation for the construction industry in 2024 is over RM70 billion.

Based on trends from previous years, MBAM expects this to add up to about RM100 billion, inclusive of the private sector, with private contracts comprising mainly warehouses, data centres and factories manufacturing semi-conductors.

“On the outlook, we have to remain neutral. Costs are rising, and there are many uncertainties even as the government improves policies at the macro level to bring down costs.

“At the same time, it is important to leverage innovations and technologies with industry stakeholders willing to move together towards digitalisation,” he added.

Although the industry is heading in the right direction, companies need to undertake changes, Wee said.

“Fairer forms of contracts should be in place as we seek better ways to conduct business.

“We believe a variation of price (escalation) provisions in a contract will allow for fairer risk and rewards between contracting parties against a fluctuating building material price backdrop. This will subsequently reduce the number of projects being abandoned,” he noted.

Industry players overview

Industry players are bullish. Kerjaya Prospek Group Bhd is optimistic about the construction industry’s growth post-COVID-19 despite various challenges, including rising raw material prices. Its FY2023 core profit leapt 20 per cent on higher construction and property billings.

Chairman Datuk Tee Eng Ho said projects could progress faster as the situation improves, with labour shortages no longer a concern.

Tee also announced the company’s plans to pursue new opportunities with Samsung C&T Corporation via a consortium, Samsung-KP JV, focusing on factory construction in Malaysia and opportunities in Penang’s Andaman Island project, estimated to be worth about RM2 billion. 

As for Varia Bhd, formerly Stella Holdings Bhd, its managing director, Datuk Benson Lau, is optimistic about sectoral growth.

The biggest winners are the Klang Valley LRT’s five new stations worth RM4.7 billion, the RM11.8 billion nationwide flood mitigation programme, and Penang’s RM10 billion LRT initiative, he told Bernama.

“The demand for commercial and residential buildings is rising as infrastructure projects and private investment increase. This positive momentum aligns with Varia’s growth prospects, positioning the company favourably for upcoming opportunities,” Lau said.

Varia, which previously signed a memorandum of understanding with Sungai Klang Link Sdn Bhd to embark on the Sg Klang Link elevated highway project, said it is currently in the early stages of planning and development.

“We are open to exploring opportunities to contribute to our growth trajectory. Our tender book currently stands at RM1.5 billion,” Lau added.

Varia also received a contract from Kator Construction Sdn Bhd to undertake the Klang River flood mitigation project in Seksyen 25, Shah Alam, which kicked off on Feb 1, 2024 with a timeline extended to Jan 31, 2029.

1Q2024 performance

The first three months saw solid performance, with the construction index on Bursa Malaysia at 193.83 on Jan 2, 2024. It expanded above the 200 level between January and March and stood at 223.17 on March 29, 2024.

Malaysia aims to transform its economic landscape via infrastructure projects and digitalisation, which have lifted infrastructure-related counters on Bursa Malaysia Bhd since the second half of 2023. 

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng told Bernama that construction stocks saw a 13.5 per cent year-to-date gain.

“In the past 12 months, the construction index surged 37 per cent. We expect the sector to be one of the best performers in 2024,” he said.

New contracts win to improve companies’ earnings

Kenanga Research said companies’ earnings should improve as work progress gathers momentum amid higher contract wins.

There should be a significant improvement in the sector’s earnings delivery versus 4Q2023 expectations, it said.

Here are some numbers to chew on. Gamuda Bhd’s 1Q FY2024 core profit jumped 35 per cent on higher construction billings from Sydney Metro West and maiden earnings from DT Infrastructure Pty Ltd. As for new job wins, Gamuda is leading with RM25 billion in 24 months. 

As for new job wins, Gamuda is leading with RM25 billion over 24 months, and IJM Corp’s RM3.62 billion year-to-date FY2024 has already exceeded its RM3 billion projection.

Sunway Construction raised its guidance on new job wins in FY2024 to RM3 billion, the same level as WCT Holdings Bhd.

Kerjaya Prospek Group Bhd has secured RM377.9 million in year-to-date job wins, and Kimlun Corp Bhd has bagged year-to-date RM133.6 million.

Source: Bernama

Strong spillover from mega infrastructure projects in Q2

Finance Minister II Datuk Seri Amir Hamzah Azizan is leading Malaysia’s delegation to an investor meeting in New York, United States to strengthen the country’s finances and facilitate investment.

The Finance Ministry (MoF) in a statement said the meeting is held in conjunction with Amir Hamzah’s attendance at the Spring Meetings of the International Monetary Fund and World Bank Group 2024 in Washington DC.

“Investors have shown a high interest in understanding the fundamentals and economic potential of Malaysia as well as the progress in implementing the Madani Economic Renewal agenda.

“Investor confidence is stronger due to the fiscal reforms implemented by the government, including deficit reduction, the Public Finance Act, Fiscal Responsibility, and targeted subsidies for electricity and water,” he said.

The meetings and dialogue sessions with financial investors and capital market players are held to provide insights into the current economic status and government planning to strengthen the country’s finances and facilitate investment.

Meetings with international investors such as fund managers and investment banks will also clarify the direction of Madani Economic Framework implementation.

Amir Hamzah also held engagement sessions with investors, and is also expected to meet with around 50 global investors from various industries and businesses in the US.

These engagement sessions are crucial to providing explanations regarding the progress of key government policies, including fiscal reforms to ensure fiscal sustainability and national debt.

Source: NST

Investor confidence high in Malaysia’s economic potential, says Finance Ministry

Investments from Japan to Malaysia are expected to expand further into new areas of retail, green and sustainable energy, digital industry as well as increase in capacity in traditional areas in the manufacturing sector.

Japanese Ambassador to Malaysia Katsuhiko Takahashi said Japanese companies view Malaysia as an attractive investment hub and are eager to do business in Malaysia.

While Takahashi may not be able to divulge the number of Japanese investments coming into Malaysia this year, he said based on recent trends, there will be a growth from an investment inflow of RM5.272 billion last year.

“Japanese companies are attracted to invest in Malaysia based on its cultural diversity, religious tolerance, good command of the English language and no major earthquake, tsunami or other disasters.

“As a result of the Look East Policy, there are many

Malaysians that can speak Japanese,” he told Bernama in an interview.

According to Takahashi, there are now 1,600 Japanese companies operating in Malaysia.

“We are the fourth largest investor in Malaysia after Singapore, Hong Kong and the US,” he noted.

He emphasised that Japanese companies are interested in expanding into the green energy sector, particularly in addressing climate change, in line with Malaysia’s aspirations to be carbon neutral by 2050.

Japanese companies Sumitomo Corp and Eneos inked a tripartite agreement with SEDC Energy, a subsidiary of Sarawak Economic Development Corp (SEDC), last year to establish clean hydrogen supply chain for local consumption and export to Japan.

He said carbon capture, utilisation and storage in clean energy is another potential area that Japan and Malaysia can collaborate.

The retail sector, according to Takahashi, has also attracted Japanese investors with the expansion of retail names such as Jonetz by Don Don Donki concept stores and Tsutaya bookstore.

“Another area is in the digital industry and the data centre for example with the setting up of Intelligent Centre Operations in Johor this year by NEC Corporation of Malaysia Sdn Bhd, a subsidiary of NEC Corporation, a Japanese information technology and electronics corporation,” he said.

In healthcare, he said Japanese companies such as Japanese conglomerate Mitsui & Co Ltd has invested in IHH Healthcare Bhd and Sumitomo Corporation in managed care services in guidance of medical costs.

In the Islamic finance and halal industries, he said, Japanese investors viewed Malaysia as a favourable hub.

Takahashi said Japanese companies are also expanding into traditional areas of investment in the manufacturing sector in Malaysia such as the extension of production facilities by two Japanese companies based in Malaysia last year, namely ROHM-Wako Electronics (Malaysia) Sdn Bhd and Taiyo Yuden (Sarawak) Co Ltd.

According to Takahashi, Malaysian companies are also investing in Japan as the Land of the Rising Sun is an attractive investment destination as a big market, good human resources and as one of the highest ranked research and development facilities in the world.

Malaysian companies that have successfully expanded their horizon to Japan are Aerodyne Group, a leading drone service provider and Pentamaster Corporation Bhd, an automation technology solutions and services provider as well as Berjaya Land Bhd in the tourism industry, Takahashi said.

He pointed out that Japanese economy is in a transitional period after a relatively quiet period for more than 25 years, with the government’s efforts to stimulate the economy in order to come out from a period of economic stagnation.

“We are starting to see a new economic situation, with the recent hike in salaries this year, which were the highest in 33 years, that motivated the end of negative interest rate regime since 2007 on March 18,” Takahashi noted.

Source: The Borneo Post

‘Investments from Japan will expand further’

With some Japanese multinational corporations (MNCs) looking beyond Singapore to base their regional headquarters due to the rising cost there, Malaysia has what it takes to position itself as a viable destination, say economists.

Sunway University economics professor Dr Yeah Kim Leng said Malaysia’s investment promotion efforts and its rising competitiveness in attracting multinationals to relocate from Singapore and elsewhere are gradually bearing fruit.

“Its well-developed physical, financial and logistics infrastructure, harmonious industrial relations, multilingual workforce and embedded global value chains are gaining increasing attention among foreign investors looking at opportunities in the dynamic Asean and Asian region as a whole,” he said.

By further enhancing government administrative efficiency and coordination effectiveness, as well as sharper policies focusing on facilitating trade and investment, Malaysia would become even more attractive as the next best alternative to Singapore, which is facing rising costs and growth constraints, he added.

“In addition to presenting opportunities for firms here to plug into the global value chains created by MNCs, domestic suppliers and service providers will need to up their game in terms of product and service quality, reliability and cost-efficiency.

“The efficiency of local supply chains will have a ‘crowding in’ effect that would further boost Malaysia’s appeal as a global service and manufacturing hub,” Prof Yeah added.

Economist Geoffrey Williams said despite sharing similar advantages with Singapore, such as the use of English language, high-quality workers and regional access, Malaysia has the edge over the city-state in terms of being cost-effective.

“There are also some good companies in key sectors such as technology and finance to work with in Malaysia.

“Against Indonesia and Vietnam, these advantages are also helping, but the Malaysian market is small. Vietnam is three times bigger and Indonesia is nine times larger.

“They are also opening up directly to MNCs,” he said.

Although the recent surge in applications and approvals for investments is positive, it must be converted into actual investments, Williams said.

“Historically, only 26% of foreign direct investment (FDI) approvals result in actual investment.

“So, the process must be streamlined with less red tape, quicker approvals of working permits, easier access to financial help and even to open bank accounts, and in general, a more welcoming low-tax, low-regulation, agile and competitive ecosystem is needed,” he added.

Malaysian Institute of Economic Research (MIER) head of research and senior research fellow Dr Shankaran Nambiar said by and large, Malaysia has “excellent infrastructure” although it will have to be constantly upgraded.

“All we need to do is to fine-tune some of our existing assets and put in place some structural changes. More could be done to reduce bureaucratic processes.

“Similarly, the offerings and roles of the central and state agencies can be brought into closer alignment,” he said.

More challenging would be to develop talent consistent with emerging technologies and to bring research and development (R&D) up to mark, he said.

“If we could attract FDI with our R&D capacity, that would be a real investment-puller,” Shankaran added.

Nikkei Asia recently reported that although Singapore is unlikely to be dethroned as the leading hub for Japanese companies, Malaysia and Thailand are potential alternatives.

The report also noted that printing ink maker Sakata Inx did not choose Singapore as its regional head office base, despite already having a presence in the region, but instead established it in Malaysia due to tax incentives.

According to the findings of a poll by the Japan External Trade Organisation released in March, among Japanese companies which had their regional headquarters in Singapore, 31% had partly relocated their functions to another country or were considering doing so.

In the 2019 edition of the survey, only 7.4% companies had indicated the same.

In a 2023 survey by the European Chamber of Commerce in Singapore, 69% of respondents indicated that they were willing to move some personnel out due to the rising cost of operations in the city-state.

Meanwhile, the Malaysian Investment Development Authority (Mida) reported a historic investment performance in 2023, with approved investments valued at RM329.5bil across various economic sectors.

InvestKL attracted a record-breaking RM8.7bil in FDI in 2023, a 300% jump from the RM2.79bil in 2022.

About 66% of these investments, valued at RM19.74bil, have already materialised. This translates into the creation of 27,000 executive jobs, of which 74% has been filled, said InvestKL.

It added that 12 leading global corporations from the Americas, Europe and Asia regions drove the FDI.

InvestKL chief executive officer Datuk Muhammad Azmi Zulkifli said in March that the unprecedented FDI into Greater KL showcases the city’s attractiveness across diverse sectors such as technology, healthcare, finance and engineering, signifying a major achievement in efforts to attract high-value activities.

Source: The Star

Malaysia is next best bet – Country can position itself as viable alternative to Singapore