The government is optimistic that the trade and investment targets set for this year are achievable despite the ringgit’s current depreciation versus the US dollar, as many other major fundamentals remain attractive and appealing to global investors.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said investors would look at the long-term outlook and fundamentals in making their decisions.

“Ringgit is one of the major factors. They want to see the stability of the ringgit and I think we are within the stable range,” he told reporters after launching BYD Malaysia’s latest electric vehicle marque, BYD SEAL.

Tengku Zafrul said investors would usually take between six months and up to one year to decide on their investments, and up to two years to set up their factory in the respective country, therefore they would not look at currency fluctuations too much.

Investments are important for economic growth, he said, noting that investments currently account for approximately 22 per cent of the national gross domestic product (GDP).

“To make investments one of the key engines of growth, we need to double the amount. When the percentage of investment to GDP increases, it will boost Malaysia’s economic growth.

“We can’t just depend on consumption and government spending,” he said.

Tengku Zafrul added that the government is looking at a five per cent growth in trade this year, slightly higher than three per cent global trade growth projected by the World Trade Organisation.

Source: Bernama

Trade, investment targets in 2024 achievable — Tengku Zafrul

Malaysia recorded total approved investments of RM329.5 billion in 2023 which is 23.0 per cent higher than in 2022, and is the highest approved investments in the country’s history.

Prime Minister Datuk Seri Anwar Ibrahim said out of the total investments, foreign investments were the main contributor at 57.2 per cent compared to domestic investments of 42.8 per cent.

“This excellent performance is supported by an increase of 35.1 per cent for domestic investments and 15.3 per cent for foreign investments,” he said in a media statement today.

This matter was tabled during the National Investment Council Meeting (MPN) No. 2/2024 today.

Anwar stressed that the country’s investment landscape which showed a very encouraging performance also reflects the recovery and revival of the economy throughout the Madani government’s administration of over one year.

“Indirectly, this is a sign that the pro-investment and pro-business friendly policies implemented through the whole-of-government approach have been fruitful in increasing investors’ confidence,” he said.

The total approved investments involved 5,101 projects and would potentially create over 127,000 new job opportunities to the people and country.

The services sector recorded the highest investments, contributing over half or 51.1 per cent of total approved investments at RM168.4 billion, followed by the manufacturing sector at RM152.0 billion (46.1 per cent) and primary industries at RM9.1 billion (2.8 per cent).

The MPN Meeting No. 2/2024 also discussed the direction of the national digital investment, in line with the development of the digital economy which is expanding rapidly and is among the key economic sectors in strengthening the country’s investment agenda.

The digital economy in Malaysia which contributed 23.2 per cent to the gross domestic product in 2021, is projected to rise to 25.5 per cent by 2025.

For the 2021-2023 period, a total of 396 digital-related projects were approved with investment value of RM128.9 billion, which included projects approved through the National Committee on Investments (NCI).

Investments in the digital projects are expected to create jobs for 36,553 local citizens.

Among the digital investments approved were for data centres, cloud computing, data hosting, big data analytics, and artificial intelligence.

The presence of renowned global digital companies and global market leaders in Malaysia also gave an important signal that the country has the attraction and conducive investment ecosystem for digital investments.

Hence, the government needs to facilitate as best as possible the potential digital investments without any compromise on aspects related to data security and national sovereignty.

Source: Bernama

Malaysia records total approved investments of RM329.5 bln in 2023 — PM

The state government has streamlined bureaucratic processes to entice a greater influx of investors into the region, Pahang Media reported.

The move, announced by the Pahang state executive councillor for Investment, Industry, Science, Technology, Innovation, and Environment, Datuk Mohamad Nizar Najib, aims to make the state an attractive destination for investment by easing operational hurdles for businesses.

During a working visit to three factories in Bentong and Lipis, Mohamad Nizar emphasised the government’s commitment to fostering a conducive investment environment.

“Facilitating investors’ affairs will undoubtedly attract more to invest in Pahang,” he said, underscoring the importance of direct engagement with the business community to understand and address their challenges.

The visit allowed Mohamad Nizar to observe firsthand the paper manufacturing processes and discuss various issues faced by investors.

He highlighted the significance of such interactions, stating, “Visits like these are crucial as they allow us to directly hear the accomplishments and challenges of the factories.

“We strive to resolve any issues as efficiently as possible with the assistance of governmental agencies at both district and state levels, ensuring a smoother process for investors.”

The initiative to simplify bureaucratic procedures is part of Pahang’s broader strategy to maintain investor confidence and promote the state as a premier investment location, not just within Malaysia but also on the international stage.

Mohamad Nizar said that retaining investors is as critical as attracting new ones. Addressing their concerns promptly and effectively is key to ensuring their satisfaction and encouraging them to advocate for Pahang as an investment hub to the global business community.

Source: NST

Pahang simplifies processes to attract more investors

Japan-Malaysia relations have expanded beyond traditional areas and Tokyo is hopeful that cooperation will continue upwards in line with the Comprehensive Strategic Partnerships inked by the two countries last year.

Japan’s ambassador, Katsuhiko Takahashi, points to the visit by, Japanese Prime Minister, Fumio Kishida, to Malaysia followed by Malaysia’s Prime Minister, Datuk Seri Anwar Ibrahim’s visit to Japan the following month.

“The highlight of Datuk Seri Anwar’s visit to Japan was the upgrading of the Japan-Malaysia relationship to a Comprehensive Strategic Partnership. Other outcomes include signing of the Exchange of Notes for the Official Security Assistance and the launch of the Strategic Dialogue.

“Our two countries also signed cooperation documents in the fields of communication and space.

“This is an indication that our cooperation is expanding beyond traditional areas,” he said last night at a reception hosted by the Embassy of Japan.

On space cooperation, Takahashi was referring to an exchange of memorandum of cooperation on Space Development and Application between the Malaysian Space Agency (MYSA) and the Japan Aerospace Exploration Agency (JAXA) signed last December.

Saying that Japan-Malaysia’s burgeoning relations, has been remarkable, he is pleased that apart from mutual visits at the leader’s level, there have been a number of other high level visits to both public and private sectors, such as ministers, prefectural governors, as well as a business mission led by the Japan Chamber of Commerce and Industry.

“This is another aspect to symbolize the expansion of Japan-Malaysia cooperation,” he said at the reception held in conjunction with Emperor Naruhito’s birthday on 23rd February.

It was attended by well over 500 guests, officials, diplomatic representatives and dignitaries, including Tengku Ampuan Pahang, Tunku Azizah Aminah Maimunah Islandariah; Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, and Finance Minister II, Datuk Seri Amir Hamzah Azizan.

Showing his confidence that the Japan-Malaysia relationship will only get stronger, Takahashi vowed to enhance the cordial relations to an even higher level to measure up to the Comprehensive Strategic Partnership gained last year would be tangible results.

The Ambassador elaborated on the progress in education, tourism and investment areas seen as top of his priorities.

“This year, we are expecting the opening of a branch campus of the University of Tsukuba in Malaysia. This is a major milestone in our educational cooperation, and we will make every effort to ensure its smooth start.

“We will also continue to promote the attractiveness of Japan to the Malaysian people. On the cultural front, we want to see more Malaysians be interested in Japanese culture and actually visit Japan,” he said.

Meanwhile, on the economic front, he urged higher investment not only from Japan to Malaysia, but also from Malaysia to Japan.

“Actually, Japan is an excellent investment destination. The market size is large and Japan has the world’s best human resource base and competitiveness in R&D.

“Some Malaysians are already investing in Japan, but we want to encourage more,” he said.

Supporting his efforts include 23 Japanese companies which took part in the reception – Ajinomoto, Yakult, Panasonic, Sony, Toyota, Mitsubishi Heavy Industries, Japan National Tourism Organization, KIRIN, Canon, University of Tsukuba, Chitose Agri Laboratory, SenSenSushi, Shiratoya, Shizuoka Prefecture, TMI Trading, Tong Woh Enterprise, Choya, Gekkeikan, Gifu Prefecture, Glico, Hisamitsu, Hokto and AWA Sake Association.

Source: NST

Japan, Malaysia relations to hit new heights in 2024

India has emphasised the need for it and Malaysia to strengthen cooperation and form investment alliances in vital sectors for the coming decade.

They include renewable energy, semiconductors, electronics manufacturing and startups.

India’s high commissioner to Malaysia, B.N. Reddy highlighted Malaysia’s role as an enhanced strategic partner for his country.

Malaysia, he added. is a significant collaborator in the development of the global south, playing a crucial part in India’s continued growth journey.

“Malaysian companies are already realising the vast potential for investment collaboration in the green energy field with India.

“Since 2019, through Gentari, Petronas’ engagement in India’s RE sector has steadily grown with Gentari’s acquisition of 30 per cent stake in India’s Greenko owned AM Green Ammonia Holdings BV to produce five million tonnes of green ammonia per annum by 2030,” he said.

Gentari will partner with India’s ReNew Energy Global in a 50:50 joint venture aimed at developing 5.0 GW of renewable energy capacity, highlighting the potential for collaboration between India and Malaysia in the electronics manufacturing sector and semiconductors.

“India has made remarkable progress in the electronics sector over the past nine years, with production surpassing US$100 billion in 2023 (up from US$30 billion in 2014), over 200 mobile manufacturing units (up from two in 2014), and more than 850 million broadband users (up from 60 million in 2014),” Reddy said.

India aims to reach $300 billion in electronics manufacturing by 2025 or 2026, he added.

Reddy said India’s establishment of dedicated industrial parks for electronics and semiconductor manufacturing has attracted significant interest from global players in the semiconductor industry.

He also highlighted Malaysia’s robust electrical and electronic products (E&E) sector.

Malaysia’s substantial 15 per cent share of the global back-end semiconductor value chain suggests that it could become a formidable partner for India in technological collaboration, capacity building and skill development.

“Emphasising on the electronics & semiconductors sector in Malaysia’s New Industrial Master Plan (NIMP) fits well with India’s initiatives in this sector.

“A recent example of possible collaboration is the setting up of an India office at Bengaluru by Malaysia’s Infinecs- Penang-based company that offers electronics design services,” Reddy said.

Regarding the startup sector, Reddy encourages Malaysia to substantially enhance collaboration with India, especially considering that India currently has about 120,000 registered startups.

“With Malaysia Startup Ecosystem Roadmap 2021-2030 aimed at generating 5,000 startups by 2025, India and Malaysia can be natural partners for collaboration in the start-up sector,” he added.

A two-day India Investment and Trade Promotion Roadshow 2024 is currently underway from Feb 20-21, featuring a 20-member high-level delegation from India.

The delegation will be led by its commerce and industry vice minister Rajesh Kumar Singh, including senior officials and industry leaders.

The event, organised by Invest India, India’s National Investment Promotion and Facilitation Agency, in collaboration with the High Commission of India in Malaysia, Malaysia-India Business Council, Federation of Malaysian Manufacturers and Malaysian Semiconductor Industry Associations.

The event will also involve the active participation of Malaysia’s Ministry of Investment, Trade and Industry, Malaysian Investment Development Authority and Malaysian External Trade Development Corporation.

Source: NST

Stronger ties with Malaysia for India’s continued growth journey: High Commissioner

The Northern Corridor Economic Region (NCER) expects to facilitate investments worth RM18 billion and realised investments of RM22 billion in 2024, while aiming to create 22,000 job opportunities.

Northern Corridor Implementation Authority (NCIA) chief executive Mohamad Haris Kader Sultan said the figure was similar to its target for 2023 as it plans to maintain a conservative stance given that big companies with chunky investments will not come in every year.

However, he noted that NCER surpassed its 2023 targets and managed to facilitate investments worth RM21.41 billion and more than 24,000 job opportunities created last year.

“The success of the NCER Strategic Development Plan 2021-2025 (NCER SDP) is a testament to its ability to steer the region towards attracting investments and boosting the socio-economic growth of the NCER.

“Since its establishment in 2008 until 2022, NCER has recorded a cumulative investment of RM206.41 billion with 241,140 job opportunities successfully created.

“Foreign direct investment contributed 44.7 per cent of the cumulative investments recorded so far, while the rest came from domestic investments,” he told a media briefing of the ‘NCER 2023 Performance Wrap-up.’

Mohamad Haris said the NCER SDP will continue to be the backbone of NCIA’s planning for the coming years with a focus on strategic projects, high-impact investments, talent and the development of MSMEs.

Source: Bernama

NCER expects to facilitate RM18 bil investments in 2024

Bandar Enstek in Nilai has attracted RM420 million in new investments with the entry of four investors in various sectors.

Negeri Sembilan Menteri Besar Datuk Seri Aminuddin Harun said investors Educ8 Group, Gobuilders Netsoft, Malindo Airways and Meta Legends will offer more than 2,000 job opportunities for the community.

“For example, the entry of Educ8 Group can improve Bandar Enstek’s socio-economic and educational level and its surrounding areas collaborating with international sports and education academies such as the LaLiga Academy Malaysia and the Mouratoglou Academy,“ he said at the sale and purchase agreement signing ceremony between TH Properties Sdn Bhd and Bandar Enstek property buyers here today.

Meanwhile, Aminuddin described TH Properties’ involvement to attract investments via Bandar Enstek, and Techpark@Enstek as a major contribution to the state’s economic growth.

He said Techpark@Enstek attracted several local investments and global brands such as Dutch Lady Milk Industries Bhd, via the DLMI@enstek project involving almost RM600 million in investments and Mahsuri Food (M) Sdn Bhd with investments of over RM250 million.

He said Techpark@Enstek with its Halal Malaysia Industrial Park (HALMAS) status is the hub choice for big names like Ajinomoto Malaysia Bhd, Farm Fresh Bhd, Coca-Cola Bottlers (Malaysia) Sdn Bhd, Kellogg’s Malaysia and other investors operating in the 708.52-hectare industrial park.

“The state government continues to support and give opportunities to companies like TH Properties to expand business activities, for example, via its green policy. It has also reduced land premiums and land conversion premiums, and capital contribution charges (for infrastructure and utilities) and others,“ he said.

Meanwhile, TH Properties chairman Datuk Kartini Abdul Manaf said Bandar Enstek’s role in the development of Labu district can generate business and job opportunities and promote the district’s ecosystem and its surrounding areas.

“We develop Bandar Enstek with a vision that combines progress and sustainability in its commercial, residential, educational and industrial components,“ he said.

He said TH Properties will continue to strive to provide quality municipal facilities to ensure Bandar Enstek remains liveable with a high economic impact on the local community. 

Source: Bernama

Bandar Enstek attracts RM420m new investments, offering 2,000 jobs

A “bright spot of the world”, an “unprecedented success story”, a “raging bull”, etc — this is how the world’s leading industry captains, economists and policy-makers defined India at the recently concluded World Economic Forum at Davos 2024. The enthusiasm about India’s economic capabilities was not without reason, but rather is backed by solid growth credentials.  

In the last decade, India has moved from being the 11th largest economy to the fifth largest and is poised to be the third largest by 2027. India’s solar energy capacity has grown 26 times in the same period. Since 2014, India has attracted over US$596 billion of foreign direct investment (FDI), positioning itself as a preferred global investment destination.

Backed by robust digital infrastructure through the Jan Dhan-Aadhaar-Mobile (JAM) trinity — i.e. bank accounts (financial inclusion), Aadhaar (unique identity) and mobile phones (digital access) — India is breaking records year after year in digital transactions, surpassing 100 billion last year. Today, there is not a single field of activity and place in the world which is not positively impacted by the rising New India.

Malaysia, an Enhanced Strategic Partner for India and a key collaborator for development and prosperity of the Global South, is an important partner in  India’s ongoing growth trajectory. Bilateral investment linkages between the two countries have been strong and growing across an array of sectors. However, to forge an investment partnership for the next decade, Malaysia and India should foster stronger collaborations in the key focus areas of Renewable Energy, Semiconductors and Electronics Manufacturing and Startups.  

Towards this end, an India Investment and Trade Promotion Roadshow 2024 is taking place from February 20-21, 2024 in Kuala Lumpur with a 20-member high-powered delegation from India comprising senior officials and industry leaders led by Rajesh Kumar Singh, Vice Minister, Ministry of Commerce and Industry of India in town. The investment Roadshow is being organised by Invest India, India’s National Investment Promotion and Facilitation Agency in collaboration with the High Commission of India in Malaysia, Malaysia-India Business Council, Federation of Malaysian Manufacturers and Malaysian Semiconductor Industry Associations; and with the active engagement of the Ministry of Investment, Trade and Industry (Miti) of Malaysia, Malaysian Investment Development Authority (Mida), and Malaysian External Trade Development Corporation (Matrade).

Today, India ranks as the world’s third largest energy consumer. India’s primary energy demand is expected to double by 2045. In anticipation of future requirements, India has adopted a sustainable approach by prioritising the development of environmentally sustainable renewable energy sources. India ranks fourth in global renewable energy installed capacity of over 180 GW. India has set itself the target of developing 500 GW of renewable energy capacity by 2030 and a net zero emission target by 2070.

India’s ongoing endeavour to ensure sustainable and affordable energy access to 1.4 billion people opens up vast opportunities for Malaysian companies particularly in ramping up India’s energy infrastructure and in key fields like solar rooftops, bio-fuels, green hydrogen, waste management (biogas sector), etc. Prime Minister Modi has recently launched a nationwide movement to embrace solar energy through his initiative to install solar rooftops in 10 million houses. India aims to achieve a 20% blending target by 2025 and to set up over 9,000 ethanol blending outlets across India. With the National Green Hydrogen Mission, India is striving to become a hub for hydrogen production and export.

Given this prospect, the renewable energy sector must figure prominently in the India-Malaysia investment mix. Malaysian companies are already realising the vast potential for investment collaboration in the green energy field with India. Since 2019, through Gentari, Petronas’ engagement in India’s RE sector has steadily grown, with Gentari’s acquisition of a 30% stake in India’s Greenko-owned firm AM Green Ammonia Holdings BV set to produce five million tonnes of green ammonia per annum by 2030; and Gentari’s joining India’s ReNew Energy Global to collaborate in a 50:50 joint venture for 5 GW of renewable energy capacity. Gentari has also partnered with India’s Tata Motors and Gati on electrical mobility. Such models of collaboration need to be replicated and more and more Malaysian-Indian ventures in green and renewable energy point the way forward.

Akin to the renewable energy sector, the electronics manufacturing and semiconductors sector is another key sector that holds vast potential for India-Malaysia collaboration. In the last nine years since 2014, India has achieved significant milestones in this sector. With electronics production crossing US$100 billion in 2023 (US$30 billion in 2014); the presence of over 200 mobile manufacturing units (from two units in 2014), and over 850 million broadband users (from 60 million in 2014), India has set itself an ambitious plan to achieve an output  of US$300 billion in electronics manufacturing by 2025-26. India’s domestic market for semiconductors is expected to grow to U$110 billion by 2030. With dedicated industrial parks for electronics and semiconductor manufacturing, global players in the semiconductor sector are keen to set up shop in India. To encourage investments, India has launched key initiatives like the Production-linked Incentive Scheme (PLI) for Large-scale Electronics Manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), etc.

Malaysia, with a strong E&E sector and contributing 15% to the global back-end semiconductor value chain, can emerge as a strong partner for India on technological collaboration, capacity building and skill development. Emphasis on the electronics and semiconductors sector in Malaysia’s New Industrial Master Plan (NIMP) fits well with India’s initiatives in this sector. A recent example of possible collaboration is the setting up of an India office at Bengaluru by Infinecs of Malaysia — a Penang-based company that offers electronics designing services.

The start-up sector is the third key sector that must be a core focus area for enacting the India-Malaysia partnership for next decade. Today, India is the third-largest start-up ecosystem in the world. From just 350 start-ups in 2014, India now boasts an armada of about 120,000 registered start-ups. India, which is home to one out of 10 unicorns globally, adds four start-ups every hour. While India and Malaysia have been collaborating in this field, it’s time to ramp up this collaboration significantly. Steps in this direction are taking place with Start-up India, India’s leading start-up promotion agency, and Malaysia’s Cradle Fund now working together to set up the India-Malaysia Start-up Bridge. Malaysian companies and Khazanah are investing in India’s start-ups. For example, recently Wow! Momo, an Indian food chain company, secured an investment of US$42 million from Khazanah. Similarly, Indian start-up unicorns such as OYO Rooms, Pine Labs, Razorpay and Ninacart have also increasingly been expanding their market into Malaysia. In the India-ASEAN Start-up Summit held in December 2023, 35 Indian start-ups and accelerators across sectors such edutech, health tech, deep-tech and ESG participated and forged fruitful collaborations with Malaysian investors, corporates and other stakeholders. With the Malaysia Startup Ecosystem Roadmap (SUPER) 2021-2030 aimed at generating 5,000 start-ups by 2025, India and Malaysia can be natural partners for collaboration in the start-up sector.

Since the formation of the Unity Government in Malaysia led by Malaysia’s Prime Minister, Datuk Seri Anwar Ibrahim, both governments have worked intensively to strengthen the India-Malaysia Enhanced Strategic Partnership and create a further rich environment for greater investment and trade promotion. Since December 2022, over 13 bilateral ministerial and deputy ministerial visits have taken place, further cementing bilateral and economic ties. The 6th India-Malaysia Joint Commission Meeting co-chaired by the foreign ministers of both countries held in New Delhi in November 2023 has further resolved to undertake several new initiatives including the Malaysia India Digital Council, India-Malaysia Start-up Bridge, India Malaysia Annual Energy Dialogue, etc, to drive the relationship forward. Against this backdrop, the India Investment and Trade Promotion Roadshow from February 20-21, 2024 in Kuala Lumpur is apt and timely, and provides an important event for charting a roadmap on collaboration for the next decade in key areas such as renewable energy, semiconductors and electronics manufacturing.

B N Reddy is the High Commissioner of India to Malaysia

Source: The Edge Malaysia

Charting a roadmap for future collaboration in India-Malaysia investment partnership

The increase in investment in the fourth quarter of 2023 (4Q 2023) is a positive sign for Malaysia’s future economic growth, economist Dr Nungsari Ahmad Radhi said.

He told Bernama that the country saw capital formation increasing which underscores new capacities in the economy.

The Statistics Department (DOSM) 2023’s print on Friday showed that Malaysia’s international investment position registered higher net assets of RM119.4 billion at the end of 4Q 2023 versus RM94.9 billion in 3Q 2023.

Meanwhile, direct investment abroad amounted to RM662.8 billion with 69.4 per cent, or RM459.9 billion, in the services industry, 12.1 per cent (RM80.5 billion) in the mining and quarrying, and 9.0 per cent (RM59.9 billion) in the manufacturing sector.

The top three destinations were Singapore valued at RM150 billion, followed by Indonesia at RM70.6 billion and the Netherlands at RM40.5 billion.

DOSM said Malaysia’s foreign direct investments (FDI) rose by RM11.4 billion to RM926.3 billion at the end of 4Q, with 50.6 per cent, or RM468.4 billion, in the services sector, followed by manufacturing (42.2 per cent: RM390.8 billion) and mining and quarrying (4.5 per cent: RM42.1 billion).

The top three countries for FDIs were Singapore (RM 207.7 billion), Hong Kong (RM113.3 billion), the United States (RM97.4 billion).

“We need more of these both domestically, and via FDI. The economy needs to be structurally different as it gains competitiveness in new areas,” Nungsari said. 

“Growing what we are already doing will not do. We have to invest in new capacities in new things. We need to have more of this,” he noted.

Source: Bernama

Rise in investment contribution good sign for Malaysia, says economist

RHB Research expects Sarawak to transition into an economic powerhouse as it views that catalytic infrastructure enhancement will take place in light of the higher development expenditure allocated for the state.

This is further backed by the state’s post-Covid-19 Development Strategy 2030 which aims to reach a gross domestic product (GDP) of RM282 billion by 2030.

The research house has identified a few key infrastructure components to look out for in Sarawak including water projects, transportation projects like the Kuching Autonomous Rapid Transit and highways, renewable energy (RE) projects like hydropower, and potential data centre setups.

“New oil well discoveries offshore Sarawak combined with its location to be a prime spot for carbon capture and storage may also drive the demand for related infrastructures,” it said in a note today.

The research firm also said Sarawak is in a sweet spot to gain from foreign investments as the state has the most competitive unsubsidised electricity tariffs in Asean and business-friendly policies, while abundant RE sources have enabled it to attract foreign investors.

“Sarawak recorded RM14.6 billion worth in terms of the value of construction work done in 2023, the fourth largest after Selangor, Federal Territory, and Johor, representing a five-year compound annual growth rate of 4.5 per cent, which is commendable in comparison to most other states, which saw a decline,” it said.

In 2022, Sarawak recorded the fifth largest value of construction projects among the states in Malaysia, at RM9.9 billion.

Meanwhile, RHB Research said KKB Engineering is its top pick for Sarawak given its diverse infrastructure exposure, followed by IJM Corp which is gradually regaining its footprint in the state.

It also takes note of Gamuda’s track record in Sarawak via the Pan Borneo Highway and Second Trunk Road projects, and Ibraco as a non-rated idea for Sarawak.

The key risks for its recommendation include unforeseen pandemic outbreaks and an unexpected downward revision in the development expenditure for the state.

Source: Bernama

Sarawak set to transition into economic powerhouse, says research firm

Malaysia is looking forward to forging stronger cooperation in the development of Technical and Vocational Education and Training (TVET) and the halal industry with Japan, Datuk Seri Dr Ahmad Zahid Hamidi said.

The Deputy Prime Minister said this is the main focus among a slew of agendas lined-up during his maiden working visit to Japan.

Zahid, who is also the Regional and Development Minister, is undertaking a week-long working visit Japan until Feb 23.

“Alhamdulillah, I have arrived in Japan last night for my seven-day working visit which included Tokyo and Osaka.

“A series of courtesy calls and meetings will take place during my visit here.

“The main focus is to discuss efforts to further strengthen Malaysia-Japan cooperation in the efforts to empower TVET and the halal industry,” he said in a social media posting on his Facebook account today.

In a separate posting, Zahid said he has attended a meeting with representatives of the Malaysian Embassy (Malawakil) in Tokyo.

Also attending the meeting were representatives from the ministries and agencies involved in the arrangement of his working visit to Japan.

“We want to ensure that all programmes planned during this working visit will have a significant impact (towards the development of the country),” he said.

The Foreign Minister, in a statement yesterday, said Zahid is being accompanied by Higher Education Minister Datuk Seri Dr Zambry Abd Kadir, senior officials of the relevant ministries and agencies as well as representatives from the institutes of higher education during his visit to Japan.

Among the key highlights during the visit included an event in which Zahid will be conferred an honorary degree from Shibaura Institute of Technology (SIT), Tokyo in recognition of his contribution not only towards the strengthening of Malaysia-Japan technical education cooperation and effort in uplifting TVET.

Other programmes during his visit to Japan including a meeting with Japan Education, Culture, Sports, Science and Technology Minister Masahito Moriyama and courtesy call from Organisation for Industrial, Spiritual and Cultural Advancement (OISCA) International president Etsuko Nakano.

Zahid is also scheduled to visit the National Institute of Technology, Tokyo College (Tokyo KOSEN) to gain valuable insights into Japan’s exemplary TVET system.

Japan, the statement said, has been Malaysia’s fourth-largest trading partner globally since 2015.

The trade value between Malaysia and Japan last year reached RM156.64 billion (US $34.39 billion), which contributed 5.9 per cent of Malaysia’s total trade.

Source: NST

Malaysia to strengthen TVET, halal industry cooperation with Japan

AS the unity government under Prime Minister Datuk Seri Anwar Ibrahim progressively consolidated its power last year, a new series of blueprints and measures had been rolled out with the aim of driving Malaysia towards a higher growth path and sustainable prosperity.

These fresh initiatives are said to reflect the unity government’s intention to sharpen the country’s focus on new growth areas such as green and renewable energy, and the digital economy.

They are also expected to create greater investment opportunities in Malaysia, and attract an increase in investment flows from the private sector to help drive growth.

New growth era

Laying the foundation for the “new structure” of the future for Malaysia is the Madani Economy framework.

Unveiled on July 27, 2023, the ambitious framework outlines seven main targets that will be achieved in the next 10 years to catapult Malaysia into a leading Asian economy, while elevating the quality of the rakyat’s life.

These targets include making Malaysia one of the Top 30 largest economies in the world and top 12 countries in the global competitiveness index; increasing the percentage of labour income to 45% of total income and the female labour force participation rate to 60%; ranking Malaysia among the top 25 countries in the world in the Human Development Index as well as among the top 25 in the Corruption Perceptions Index; and achieving fiscal sustainability with a fiscal deficit to gross domestic product (GDP) ratio of 3% or lower.

Immediately following the launch of the Madani Economy framework is the rollout of the National Energy Transition Roadmap (NETR) Phase 1 on the same day, and Phase 2 on Aug 28, 2023.

The roadmap charts Malaysia’s shift towards becoming a green and sustainable economy, with net-zero emissions by 2050.

To facilitate the shift, the NETR focuses on six energy transition levers, namely energy efficiency; renewable energy (RE); hydrogen; bioenergy; green mobility; and carbon capture, utilisation and storage (CCUS). These, in turn, have been strategically structured into 10 flagship projects, which are expected to attract investments exceeding Rm25bil.

Further, the responsible transition (RT) initiative, a key component of the NETR, is expected to yield investment opportunities worth RM1.2 trillion to RM1.3 trillion by 2050.

This trajectory foresees an additional contribution of Rm220bil to the country’s GDP and highlights the great potential in Malaysia’s energy sector.

In September 2023, the government introduced two other blueprints that will create even more investment opportunities in Malaysia.

These include the New Industrial Master Plan 2030 (NIMP 2030) to bolster the nation’s manufacturing sector and the 12th Malaysia Plan (2021 to 2025) Mid-term Review (12MP-MTR), which involves making modification and creating a transition for sustainable development.

The NIMP 2030 outlines six key goals to elevate Malaysia’s economic standing.

These include increasing economic complexity; creating high-value jobs opportunities; extending domestic linkages; developing new and existing clusters; improving inclusivity and enhancing environmental, social and governance practices.

Under the seven-year plan, nine mission-based projects have been identified to catalyse high value-added activities across key sectors in Malaysia through initiatives such as launching a locally-manufactured electric vehicle (EV) and transforming 3,000 factories into smart factories by 2030.

Essentially, the NIMP 2030 seeks to nurture high-value and innovation-driven sectors such as electrical and electronics (in particular, the integrated circuit design and wafer fabrication activities); specialty chemicals; aerospace; pharmaceutical; and medical devices.

The government also targets four additional growth sectors, namely, advanced materials, EVS, RE, and CCUS.

Importantly, the NIMP 2030 emphasises inclusivity and balanced development, with an aim to stimulate economic growth across all states based on their respective unique strengths.

From mineral-rich states such as Perak, Terengganu, Kedah, Pahang and Kelantan to renewable energy hubs such as Sabah and Sarawak, the potential of every state will be optimally harnessed.

Meanwhile, the 12MP-MTR outlines 17 “big bold” measures, covering important strategies and initiatives that will serve as the main catalyst in accelerating the efforts to reform the socioeconomic development of the nation in line with the Madani Economy framework.

Among these “big bold” measures are developing high growth high value (HGHV) industries, enhancing fiscal sustainability, retargetting subsidies, accelerating energy transition, advancing digitalisation and technology as well as empowering micro, small and medium entreprises.

The HGHV agenda will cover the digital and technology-based industries; electrical and electronics; agriculture and agro-based activities; rare earth; and energy transition.

In line with the national ambition, Budget 2024, unveiled on Oct 13, 2023, further introduced measures to support the implementation of key blueprints such as the NETR and NIMP 2030.

Among these initiatives are tax incentives to spur investments by both new and existing companies to transition to a low-carbon economy; an allocation of RM200mil as initial fund for the implementation of certain NIMP 2030 programmes; and a reinvestment tax incentive to encourage existing companies to plough back their capital into high-value activities.

Source: The Star

Enhancing investment opportunities

Asia-Pacific Economic Cooperation (Apec) must not falter from advocating open markets and economic cooperation to mitigate further global economic fragmentation, Tengku Datuk Seri Zafrul Abdul Aziz said.

The Investment, Trade and Industry Minister said the forum must amplify the benefits of multilateral trade agreements, exemplified by the Asean Free Trade Area (Afta), Regional Comprehensive Economic Partnership (RCEP), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Free Trade Area of the Asia-Pacific (FTAAP).

“These arrangements indeed offer frameworks for collaboration and avenues to collectively address challenges and foster regional economic integration,” he said during the APEC Business Advisory Council (ABAC) gala dinner tonight.

Tengku Zafrul said exposed vulnerabilities from the Covid-19 pandemic along with prolonged geopolitical tensions have led to issues such as disruptions of global supply chains and surge in the costs of goods and logistics.

“One of the key ways to weather this storm is by going at it together. As such, multilateral initiatives such as Apec is crucial to allow collective and continuous efforts to be taken,” he said.

Tengku Zafrul said as the world navigates the “turbulent waters”, APEC’s response must also be comprehensive and forward-looking.

“Therefore, I am pleased to hear that ABAC Peru will focus this year’s workplan on regional economic integration, human development, and sustainability.

“These pillars hold the key to steering the Asia-Pacific region by fostering economic resilience through integration, empowering a skilled and inclusive workforce, and promoting sustainable practices in ensuring long-term viability and global competitiveness,” he noted.

Sharing Malaysia’s perspective, the minister said Apec holds a distinctive significance for the nation.

“It serves as a fundamental pillar of our economic strategy, guiding the formulation of national policies aligned with the region’s collective aspirations.

“Malaysia’s initiatives, spanning the cultivation of a dynamic digital landscape to the preservation of our shared environment, resonate deeply with the core principles of APEC,” he said.

He added Malaysia has its clearest economic direction at present as outlined by the Madani Economy agenda, underpinned by several policies announced last year.

The policies are the New Industrial Masterplan 2030 and the National Energy Transition Roadmap.

The Investment, Trade and Industry Ministry also launched the Chemical Industry Roadmap and the National Industry ESG Framework last year, he noted.

“Similar to Apec’s core principles, Malaysia remains committed to being open and receptive to opportunities and investments, particularly from our long-standing partner economies,” he said.

Tengku Zafrul said in 2022, Apec economies made substantial contributions to the Malaysian economy, constituting an impressive 76.5 per cent of the country’s net foreign direct investment inflows.

“This underscores Malaysia’s steadfast dedication to fostering robust economic partnerships within APEC,” he said.

He also commended the first ABAC (ABAC 1) meeting for 2024 in Kuala Lumpur, which has been productive and fruitful thus far.

Tengku Zafrul said the significance of this three-day meeting that ends tomorrow cannot be overstated as it marks the official commencement of its 2024 workplan, a pivotal roadmap that will culminate in recommendations presented to APEC Economic Leaders at the end of the year.

“These recommendations will play a crucial role in guiding policy formulation to address the pervasive impacts stemming from ongoing economic and geopolitical challenges affecting the Asia-Pacific region,” he added.

Source: Bernama

Apec must not falter from advocating economic cooperation — Tengku Zafrul

The Ministry of Investment, Trade and Industry (Miti) has emphasised the need for a new trade agenda which prioritises fair wages for workers and aims to uphold a robust middle class in both advanced and developing economies.

“Trade has to ensure that workers are well paid, and both advanced economies and developing countries could sustain a robust middle class,” Deputy Investment, Trade and Industry Minister Liew Chin Tong said when officiating the Apec Business Advisory Council (ABAC) meeting’s opening ceremony, hosted by ABAC Malaysia, on Thursday.

“Additionally, we need to ensure trade will help create a better society, and help the government to keep taxes. It’s important to ensure the government is not deprived of a tax base from multinationals. [It] would also have to place climate at its centre, while ensuring that states receive adequate taxes from multinationals to provide services, especially health services, and to ensure social cohesion. 

“Trade needs to connect the dots between climate, the sustenance of middle-class society, and ensuring that the workforce is healthy and feels secure enough about their lives, so that they could consume as consumers, not just workers. This is just a general view to explain to Apec (Asia-Pacific Economic Cooperation) member economies that we need to think about the new trade agenda. It can’t be the regurgitation of old cliches, but rather a fresh approach,” he stressed. 

ABAC Malaysia, tasked with offering a business perspective to the government for advancing trade in the region, is hosting its first meeting for the year, which provides an opportunity for Malaysia’s private sector to engage with business leaders from the 20 Apec economies, including the US, Australia, Japan, Singapore, and Indonesia. The three-day event is running until Friday.

ABAC Malaysia is represented by three permanent members. They are chairman of RM Capital Partners Datuk Rohana Tan Sri Mahmood, Westports Holdings Bhd executive chairman and group managing director Datuk Ruben Emir Gnanalingam Abdullah, and Petroliam Nasional Bhd (Petronas) president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz. 

ABAC Malaysia is also represented by alternate ABAC member Keong Hann Yeoh, who is an executive director of YTL Power International Bhd. 

Touching on domestic policies, Liew said Malaysia introduced two ground-breaking national policies last year, namely the New Industrial Master Plan 2030 and the National Energy Transition Roadmap, which is in line with the country’s commitment to APEC’s trade facilitation and closer economic cooperation priorities. 

It also demonstrates Malaysia’s emphasis on creation and adoption of cutting-edge technology, prioritising environmental, social and governance (ESG) initiatives, acceleration of energy transition, as well as inclusive growth. 

“Specifically on inclusive growth, I highly commend Apec Peru’s efforts this year to promote the transition of informal economic actors to the formal and global economy. Such an initiative resonates well with our priorities, due to the similarities in our economic make-up. As I have constantly advocated, Malaysia needs to envisage ourselves to become a middle-class society, with micro, small and medium enterprises playing a monumental role as the backbone of our economy.

“Through open communication, shared interest, and an unwavering commitment to economic cooperation, we can bridge divides, and fortify a more resilient Asia-Pacific. In order to tap into and leverage the boundless opportunities for growth, public-private partnerships and cooperation between Apec governments and the private sector are key if we are to achieve tangible outcomes,” Liew added.

Source: The Edge Malaysia

MITI calls for new trade approach focused on fair wages and sustaining a robust middle class

Newly-launched investment and trade agency InvestSarawak will facilitate the ease of doing business in the state.

Deputy Premier Datuk Amar Awang Tengah Ali Hasan, who is Minister of International Trade, Industry, and Investment Sarawak, said InvestSarawak will serve as a one-stop centre and be the first point of contact for all investors.

“InvestSarawak, under the purview of my ministry, is a one-stop centre that aims to transform the investment landscape, as well as increase trade and talent attraction for Sarawak.

“They will play a key role serving as facilitator and adviser to provide invaluable local insights to all investors, both foreign and domestic,” he said during the agency’s launch here last night.

Awang Tengah, who is InvestSarawak board deputy chairman, said the agency will act as the key facilitator for investment projects in Sarawak, providing support across sectors in their development, applications, and approvals.

Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg, who also serves as InvestSarawak board chairman, launched the agency.

The launching ceremony, held in conjunction with the EU-Malaysia Business Day 2024 Networking Dinner, saw the attendance of 18 European Ambassadors led by Ambassador of the EU to Malaysia Michalis Rokas.

Among others present were Deputy Premier Datuk Amar Dr Sim Kui Hian; Minister for Utility and Telecommunication Dato Sri Julaihi Narawi; Women, Childhood and Community Wellbeing Development Minister Dato Sri Fatimah Abdullah; State Secretary Datuk Amar Mohamad Abu Bakar Marzuki; and InvestSarawak chief executive officer Timothy Ong.

Source: Borneo Post

InvestSarawak to be key facilitator for investment projects

Sarawak’s unique offerings and Europe’s diverse markets offer huge potential for mutually beneficial partnerships in investment and trade, said Deputy Premier Datuk Amar Awang Tengah Ali Hasan.

The Minister of International Trade, Industry and Investment said up to last year, there were about 19 EU investments in Sarawak – specifically from the Netherlands, Belgium and Germany – totalling RM10.66 billion in sectors such as electrical and electronics (E&E), basic metal and petroleum products.

He said there were numerous opportunities in the agriculture, tourism, oil and gas, forestry, high-value timber products, mining and downstream manufacturing sector.

“Sarawak is now focused on the development of new economic sectors such as hydrogen economy, digital economy, renewable energy, finance and talent development.

“These strategic shifts allow us to move from the conventional resource-based economy to a low carbon, green and circular economy,” he said in his welcoming remarks at the EU-Malaysia Business Day 2024 Networking Dinner Reception at a hotel here tonight.

Emphasising sustainability, Awang Tengah noted Sarawak’s commitment to environmental responsibility and alignment with global Environmental, Social and Governance (ESG) standards.

“Sarawak is contributing not only to its own sustainable development but also to a broader global effort towards creating a more equitable and environmentally conscious world while mitigating potential climate crisis,” he said.

Awang Tengah underscored Sarawak’s attractiveness to investors, citing the region’s political stability, business-friendly policies, and incentives, including competitive tariffs on water and electricity, generated from renewable energy sources.

The event also witnessed the official launch of InvestSarawak, a One-Stop Centre aimed at facilitating investment and trade.

Among those present were Deputy Premier Datuk Amar Dr Sim Kui Hian and EU Ambassador to Malaysia His Excellency Michalis Rokas.

Earlier today, a forum was organised in conjunction with Business Day, which drew over 300 participants including over 100 companies from the EU.

Source: Borneo Post

Awg Tengah: Huge potential for mutually beneficial partnerships for S’wak, EU in investment and trade

Economists anticipate Malaysia’s unemployment rate to continue its downward trend and reach an average of 3.2% in 2024, and expect the labour force to grow by 2.1% and the number of employed persons to increase by 2.2% in the same period.  

In a note on Monday, TA Securities said the combined effects of government initiatives and the influx of foreign direct investment (FDI) are poised to contribute to a more robust job market, creating favourable conditions for lower unemployment rates and improved overall labour market conditions.

The research house noted that the government is proactively addressing issues such as low pay, such as the wage progressive model, to enhance the overall well-being of workers.  

“Furthermore, as we anticipate a resurgence in the Chinese market and a continuous uptick in domestic demand in Malaysia, the unemployment rate is expected to benefit positively,” TA Securities said.  

 “The sustaining economic growth is likely to attract increased FDI into the country. The inflow of FDI is anticipated to stimulate business expansion, leading to additional job opportunities,” it added.  

Separately, Hong Leong Investment Bank (HLIB) also noted that the future labour market will remain supported by a further increase in tourism activities, the realisation of FDI projects, and the government’s other job creation initiatives.  

To note, Malaysia’s jobless rate stood at 3.4% in 2023, showing an improvement from the 3.8% recorded in 2022 and the 4.6% rate observed in 2021, according to the Department of Statistics Malaysia.

The employment rose by an average of 2% year-on-year (y-o-y), while unemployment decreased by 8.1% y-o-y in 2023.

“Malaysia’s positive economic momentum that persisted throughout 2023 had increased the need for labour. 

“As a consequence, the number of employed persons steadily improved to keep up with industry demands, and the unemployment rate returned to pre-pandemic levels in November,” HLIB said. 

Source: The Edge Malaysia

Jobless rate to drop further as govt initiatives, FDI seen boosting M’sian market in 2024 — economists

The one-stop centre to facilitate investment in Johor is expected to be completed this year, says Datuk Onn Hafiz Ghazi.

The Mentri Besar said the centre, among the initiatives in the Johor-Singapore special economic zone (JS-SEZ), will be the first of its kind in the country.

“We will have an investment facilitation centre in Johor that will see the collaboration of all Federal and state agencies related to investment.

“The centre will be the first of its kind in the country. There is one in Kuala Lumpur but it does not have the special state and Federal government collaboration like the one here.

“We target to have the centre ready by this year,” he told a press conference here on Monday (Feb 12) after visiting the Layang water treatment plant and Kota Masai main intake substation.

He said the centre will make it easier for investors to set up businesses here as they will only need to go to one place for all their investment needs.

During the JS-SEZ memorandum of understanding (MoU) signing between Malaysia and Singapore last month, the two countries outlined several initiatives in building up the economic zone.

Other initiatives aside from the one-stop centre include passport-free QR code clearance system on both sides, and adopting digitalised processes for cargo clearance at land checkpoints.

On another matter, Onn Hafiz also said the Johor Fast Lane concept, which aims to reduce red tape in council matters, also made Johor appear more attractive to investors.

“The concept started with the Kulai Municipal Council (MPKu) before it was extended to other local councils.

“Currently, four local councils – Johor Baru City Council (MBJB), Iskandar Puteri City Council (MBIP), Pasir Gudang City Council (MBPG) and MPKu – have implemented the concept,” he said.

He added that last year, the Johor Fast Lane helped the four local councils attract 30 investors in total.

Source: The Star

Johor’s one-stop investment centre to be ready this year, says MB

Penang has successfully maintained its position as Malaysia’s top exporter in December 2023 despite being the second smallest state.

Chief Minister Chow Kon Yeow said that Penang has consistently been in the top three positions in terms of contributing to the country’s economy, growth, and attracting investors.

“In fact, the figures were very encouraging as we succeeded in maintaining our position as the top exporter in Malaysia for December last year.

“Five states dominated the country’s exports, contributing a total of 81 per cent, and I’m happy that Penang stood at number one with RM37.3 billion,” he said in his speech at the Chinese New Year luncheon organised by non-governmental organisation, Persatuan Kebajikan 88 Kapten (88 Captains) here, today.

Also present at the event were Yang Dipertua Negeri of Penang Tun Ahmad Fuzi Abdul Razak and his wife Toh Puan Khadijah Mohd Noor, as well as Deputy Chief Minister I Datuk Mohamad Abdul Hamid, and 88 Captains chairman Datuk Seri Dr Ooi Eng Hock.

Chow said Penang is also on track to record another excellent year in 2024 in terms of approved manufacturing investments.

He said the third quarter of 2023 showed that the state’s approved manufacturing foreign direct investment (FDI) inflows amounted to RM35.8 billion, a six-fold increase compared with the previous year.
“Penang once again showed our key role as the main contributor to the country’s manufacturing FDI, capturing 42 per cent of the major manufacturing (sector) in Malaysia,” he said.

Chow said among the countries that contributed the highest FDIs in Penang were the Netherlands, the United States and Singapore, which contributed a combined 95 per cent to the approved manufacturing investments in the state.

“I am confident our economic success is good news for the citizens in the state especially the young generation who have a place to make a living here, now,” he said.

Meanwhile, Ooi said through the event, Persatuan Kebajikan 88 Captains had successfully collected RM2.4 million funds to provide scholarships for the underprivileged youths in the state to further their studies in universities or local colleges.

He said the financing allocation would be able to help the students for this year and the next, in an effort to assist them to pursue education to a higher level.

“Students who want to apply to our scholarship programme can obtain further information at the Persatuan Kebajikan Captains website. It is open to those in the B40 and M40 groups.

“Each student will be given about RM15,000 to RM20,000 to cover education fees and living expenses and what we want is for them to become excellent students,” he added.

Source: Bernama

Penang remains Malaysia’s top exporter in Dec 2023

CONFIDENCE among local manufacturers is starting to recover, according to a quarterly survey by the Malaysian Institute of Economic Research (MIER).

The Business Conditions Index (BCI) for the fourth quarter 2023 (4Q23) increased by 9.3 points compared to the previous quarter, reaching 89 points.

On an annualised basis, the BCI also experienced a 3.1-point rise from 85.9 points, though the index for 4Q23 still fell below the 100-point threshold.

The BCI expected index for 4Q23 recorded a value of 113.5 points, a significant improvement from the 89 points recorded in 3Q23.

“Companies continue to express confidence in the outlook for the next three months, with particularly high optimism observed in the beverage and textile sectors. It is hoped that the support allocated for micro, small and medium enterprises (MSMEs) in Budget 2024 will aid their survival and contribute to the realisation of the Madani Economy vision,” according to the report released on Feb 8.

MIER’s Business Conditions Survey, conducted four times a year, asked respondents about their perceptions of the current and expected business situation.

Rather than attempt to quantify trends, the BCI was intended to detect changes in the short-term outlook allowing inferences to be drawn regarding the end of near-future economic growth and could be useful as yet another tool to gauge impending economic climate.

The BCI sales index for manufacturing companies dropped 9.2 points quarter-on-quarter (QoQ) and 10.3 points year-on-year (YoY), reaching 34.7 points.

In 4Q23, 50% of the respondents reported poor sales, 31% reported satisfactory sales and only 19% reported good sales.

Overall, the beverage, textile, medical, precision and optical instrument, watch and clock, and other manufacturing, repair and installation industries reported good sales. However, manufacturers of paper products, electrical equipment and furniture reported poor sales, according to the report.

On a positive note, the report said foreign demand surged by 8 points to 39.3 points in 4Q23, with the recovery in export orders propelled by the beverage industry, the non-metallic minerals sector, other manufacturing, and the repair and installation sector.

It said the 29% increase in export orders is favoured by the fact that monetary policy in major economies is no longer being tightened, and stimulus measures are beginning to take effect.

For 21% of companies, export orders remain unchanged, a notable improvement from the 38% reported in the previous quarter.

On the other hand, the proportion of companies whose foreign orders declined remained stable at 50%.

This is particularly evident in chemical and pharmaceutical products, electrical equipment, motor vehicles and transport equipment, it added.

For 2024, the report said Malaysia’ annual inflation rate was expected to range between 2.5% and 3%.

“The inflation outlook is highly subject to changes in domestic policy on subsidies and taxes, Bank Negara Malaysia’s (BNM) monetary policy, movements in global commodity prices and unanticipated shocks arising from geopolitical uncertainties in the Middle East,” it said.

The report said based on the latest Consumer Price Index (CPI) data released by the Department of Statistics Malaysia (DoSM), Malaysia’s inflation rate remained stable at 1.5% in December 2023.

The headline inflation has fallen below the 2% inflation target for four consecutive months after August, suggesting price stability in the Malaysian economy.

Annually, Malaysia’s inflation rate stood at 2.5% in 2023, a marginal decline from 3.3% in 2022.

It noted that the food and non-alcoholic beverages component, which contributed 29.5% to the total CPI weight, registered a YoY inflation rate of 2.3% in December 2023.

This inflation rate was approximately 1.5 times higher than the national average inflation rate of 1.5% in December 2023.

For the entirety of 2023, it noted that the annual inflation rate for food and non-alcoholic beverages component was 4.9%, roughly twice as high as Malaysia’s annual inflation rate of 2.5%.

The high inflation rate in the food component suggested that Malaysians — especially the low-income individuals and households (as food consumption generally constitutes a significant portion of their expenditure) — are facing considerable price pressure from food consumption.

Source: The Malaysian Reserve

Business sentiment picks up, says MIER

Malaysia’s economy is expected to grow between 4.0% and 5.0% in 2024, boosted by domestic spending and foreign direct investment (FDI), according to Interpacific Asset Management.

Its chief economist and fund manager Datuk Dr Nazri Khan said the relentless effort by the current government to bring in more foreign investment is an indication that global investors have increased their confidence in Malaysia, which bodes well for the domestic markets.

He said the government remains committed to its economic reform efforts to attract high-value investments through catalytic blueprints and initiatives under the Madani economic framework, the National Energy Transition Roadmap and the New Industrial Master Plan 2030.

“Among the sectors that will benefit from these strategies is the construction sector where the government has allocated RM72.3 billion for transport, water and energy.

“Meanwhile, the technology sector in Malaysia is also expected to expand further with the National Digital Economy Programme and Malaysia’s 5G deployment,” he told Bernama.

On inflation, Nazri anticipates a slight rise in the cost of goods and products due to the subsidy rationalisation which could have some impact on inflation.

“However, we are not expecting the inflation rate to move towards the August 2022 peak of around 4.5% to 4.7%.

“With the inflation rate in Malaysia stable at 2.0% after coming through August 2022, we do not expect any changes to the Overnight Policy Rate (OPR) for 2024,” he said.

With a lower inflation rate position currently, Nazri said, Bank Negara Malaysia (BNM) is expected to remain neutral in its monetary stance for 2024.

He said the central bank would not remain static in its decision should the landscape change and he believes a wait-and-see strategy would be implemented before any decisions could be reached specifically on the OPR.

“We are favouring the OPR to be maintained throughout 2024 as the central bank has kept a neutral stance on its policy in the last few monetary meetings.

“This is an indication that BNM may be well positioned to let the OPR remain at 3.0%,” he said.

Source: The Sun

Malaysia’s economy to grow 4-5% in 2024, boosted by domestic spending and FDI: Economist

The Johor state government believes that the Johor-Singapore Special Economic Zone (JS-SEZ) will be a game changer and a catalyst for economic improvement.

Johor Menteri Besar Datuk Onn Hafiz Ghazi said that to realise that ambition, the state government plans to establish the Invest Malaysia Facilitation Centre (IMFC) which will be in unison with the state’s agencies.

“Last year, the Ministry of Investment, Trade and Industry (Miti) established the IMFC, which aims to unify and coordinate all aspects related to investment in Malaysia.

“Thus, the state government intends to establish an IMFC united with Johor agencies. The state government has requested the expertise of Miti to help the state government succeed in this initiative under the JS-SEZ framework,” he said in a post on his Facebook page on Tuesday.

The post also stated that Onn Hafiz and the Johor state government’s delegation met with Miti minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz in Kuala Lumpur on Tuesday to discuss the JS-SEZ matter.

According to Onn Hafiz, other matters discussed in the meeting included the state government’s proposal regarding the details of the JS-SEZ policy such as optimising incentives and tax structures; encourage investment based on environmental sustainability; creating technological collaboration and innovation; and facilitate the integration and cooperation of both countries in the global market.

“All these ideas and suggestions have been taken into account, and even improved by YB Minister and the ministry itself. Coordination between the ministry and the state government is very important in ensuring that all work moves in parallel and according to the set timeline.

“Hopefully all these plans will bear fruit, in ensuring that Johor is able to become a developed state by 2030,” he added.

On Jan 11, Malaysia and Singapore signed a memorandum of understanding to make JS-SEZ a success in strengthening economic relations between Johor and Singapore.

Source: Bernama

JS-SEZ set to be game changer, spur Johor’s economy, says MB

Johor wants more environmentally friendly investors to invest in the Johor-Singapore special economic zone (JS-SEZ), says its Mentri Besar.

Datuk Onn Hafiz Ghazi suggests introducing incentives and tax structures to make the zone attractive to investors.

“There should be a collaboration of technology and innovation, and the integration and cooperation between Malaysia and Singapore in the global market should also be eased,” he said in a Facebook post on Tuesday (Feb 6).

Earlier, he led the Johor delegation in a meeting with Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz in Kuala Lumpur.

“During our meeting, I told Zafrul that Johor also hopes to have an Invest Malaysia Facilitation Centre (IMFC) to gather all the related agencies in the state under the JS-SEZ framework,” he added.

Malaysia and Singapore officially set up the economic zone by signing a memorandum of understanding (MoU) on Jan 11.

The signing was witnessed by Prime Minister Datuk Seri Anwar Ibrahim and his Singapore counterpart, Prime Minister Lee Hsien Loong.

Source: The Star

Johor seeks more eco-friendly investors in Johor-Singapore special economic zone

Malaysia is among Asia-Pacific countries that may benefit from the competition over trade and technology between China and the United States (US) which continues to disrupt supply chains, according to Moody’s Investors Service.

The credit rating agency said the ongoing US-China competition present opportunities for economies with strong manufacturing bases and good infrastructure, such as Malaysia (A3 stable), Vietnam (Ba2 stable) and Thailand (Baa1 stable).

“An escalation of military conflicts in the Middle East also poses supply chain risks,” it said in a research note today.

Moody’s said a downshift in China’s (A1 negative) economic growth rate and a cyclical slowdown in the US (Aaa negative) will weigh on Asia-Pacific’s credit conditions in 2024.

“Peaking inflation globally will provide space for monetary tightening cycles to slow, but financial conditions will remain difficult for the weakest rated issuers. Meanwhile, geopolitical risks will continue to shape business decisions,” it added.

Moody’s also forecast a structural shift in Asia-Pacific’s growth trajectory.

“We project the weighted average of real Gross Domestic Product growth for the 25 sovereigns in Asia-Pacific to decelerate to 3.6 per cent in 2024 from 4.4 per cent in 2023, reflecting the slowdown in China and broadly lacklustre global economic conditions, including the cyclical slowdown in the US,” it said.

The downshift in China’s growth trajectory, reflecting a continued emphasis on domestic rebalancing as well as the property sector
slowdown, will spill over in the region through a number of transmission channels, such as trade in goods and services, commodity
prices and investment, Moody’s said.

“Growth rates in Asia-Pacific and Asia-Pacific ex-China are now likely to converge, reflecting the lower growth impetus from China. However, the region will continue to expand faster than most other regions even as growth decelerates in 2024,” it added.

Source: Bernama

Malaysia set to benefit from US-China competition — Moody’s

The continued competition over trade and technology between China and the US — despite continuing to disrupt supply chains — presents opportunities for economies with strong manufacturing bases and good infrastructure, including Malaysia.

In a statement on growth headwinds and funding conditions in Asia Pacific (Apac) in 2024, Moody’s Investors Services said it sees a number of global credit themes that will shape credit conditions for Apac this year.

Firstly, the peaking interest rates may lead to gradual monetary easing later in the year, but Moody’s expects policy rates to remain above levels seen in the last decade for most of the region, which will increase borrowing costs and slow economies.

Secondly, Moody’s sees structural shifts unfolding in the region, as China’s structural challenges from debt, demographics and productivity growth weighs on its medium-term growth profile.

“The proliferation of new technologies, such as artificial intelligence (AI) for example, could help mitigate ageing demographics facing the region. Thirdly, polarisation at the global level will continue to shape industrial policies and investment decisions.

“Competition over trade and technology between China and the US and its allies will continue to disrupt supply chains and influence investment decisions in Apac,” said the credit rating agency in the statement on Monday.

Competition over trade and technology between China and the US will continue to disrupt supply chains and influence investment decisions, said Moody’s.

The rating agency pointed out that the strict controls imposed by the West on China’s ability to obtain or build advanced computing chips will slow the development of the Chinese semiconductor industry.

Western countries’ technology- and security-related regulations and investment policies will also raise barriers to the integration of China’s AI industry with the global market.

“That said, this could present opportunities for economies with strong manufacturing bases and good infrastructure, such as Vietnam, Thailand and Malaysia: countries that have generally sought to maintain their neutrality and openness to trade through participation in the US-led Indo-Pacific Economic Framework and China-led Regional Comprehensive Economic Partnership.

“Beyond Sino-US tensions, tensions in the South China Sea and the Taiwan Strait pose risks to the region’s supply chain. The escalation of military conflicts in the Middle East adds further risk to the region,” stated Moody’s.

Having said that, Moody’s said Apac’s economic growth will continue to outperform most other regions, as headwinds will be mitigated by robust domestic demand in large emerging markets, such as Indonesia and India.

Under such geopolitical uncertainties, coupled with still-tight funding conditions and slow growth, Moody’s said these headwinds would impair Apac countries’ deficit consolidation and debt reduction.

“Larger debt burdens with higher interest rates have led to a significant deterioration in debt affordability post-Covid in emerging and frontier economies such as Pakistan and Sri Lanka,” it said.

However, Moody’s said slowing policy rate tightening in the US could alleviate some currency pressures for both higher-rated and lower-rated sovereign debt papers.

“Currency weakness in Apac has been pronounced amid the US dollar’s broad strength since 2022. A stabilisation in bilateral exchange rates with the US could bring some relief to holders of foreign currency debt,” it said.

“A number of Apac governments have reduced their exposure to foreign currency denominated borrowings post-Covid, although several frontier market sovereigns continue to maintain very high levels of foreign currency debt, including Sri Lanka, Laos and Mongolia.

“However, foreign currency denominated debt in some countries such as Cambodia, the Solomon Islands and Bangladesh are on concessional terms, mitigating liquidity risks and potential currency mismatches,” it added.

Source: The Edge Malaysia

Malaysia among Apac countries with opportunities amid continued US-China trade, tech competition, says Moody’s