The Johor-Singapore Special Economic Zone (JS-SEZ) can potentially propel Johor to become the southern growth engine for the economy, said RHB Investment Bank Bhd (RHB IB).

In a note today, the investment bank said new foreign direct investment (FDI) flows from across the region would fuel Johor-centric opportunities.

“We remain positive on the broader market with external volatility offset by domestic stability and bolstered by ample liquidity, steady corporate earnings and attractive valuations.

“We believe the JS-SEZ is a compelling proposition on its own – with Johor offering a lower operating cost environment, access to land, ample supply of skilled labour and adequate infrastructure to connectivity coupled with Singapore’s access to capital and technology,” it said.

RHB IB said the signing of the JS-SEZ agreement will uplift market confidence as the bilateral commitments represent an unprecedented level of progress and collaboration, and real estate in Iskandar Malaysia is expected to undergo a multi-year growth phase.

“The influx of FDIs, the opening of new offices by local and foreign financial institutions in Forest City, as well as the higher number of travellers from Singapore, should have a strong positive spillover effect on the real estate sector,” it noted.

Similarly, Maybank Investment Bank Bhd (Maybank IB) also anticipates the property sector will benefit positively as the signing of the JS-SEZ validates the sustained implementation of government initiatives.

“This is the next largest milestone after the launch of the National Energy Transition Roadmap (NETR) in 2023, which is progressing well, in our view,” it said.

Maybank IB also stated that the JS-SEZ agreement marks a new era of investment opportunities and the leadership and commitment of the two countries, which form the foundation pillars of the special economic zone.

Meanwhile, Kenanga Investment Bank Bhd (Kenanga IB), in a note, said the first wave of investments could be from Singapore given its proximity to the JS-SEZ.

It said the JS-SEZ targets to welcome 100 projects in 10 years and has trained its sights on 50 projects in five years.

“At the Malaysian country level, manufacturing investments from Singapore, on average, have seen around 100 investments approved annually over the past six years.

“On average, each investment computed is about RM150 million, though this should not be reflective of the ones targeted within the JS-SEZ, which is of high value,” it added.

Source: Bernama

JS-SEZ can drive Johor to become southern growth engine for economy – analysts

PM lauds unique joint initiative with Singapore to promote southern corridor

The Johor-Singapore Special Economic Zone (JS-SEZ) is a rare and unique joint initiative between Malaysia and Singapore to mutually attract top global investors, says Datuk Seri Anwar Ibrahim.

The Prime Minister said it was “very rare” to find two countries working together as a team and to promote investments for both nations in a single project.

“I think that by itself is a great incentive other than the financial incentives and infrastructure, where two countries work as a team, it is a rare feat,” said Anwar at a joint press conference with Singapore Prime Minister Lawrence Wong here yesterday.

Both prime ministers witnessed the exchange of the agreement for the JS-SEZ along with six other memoranda of understanding (MOUS) and one Letter of Intent.

The MOUS involve the field of carbon capture and storage, cooperating on emissions under Article 6 (Paragraph 2) of the Paris Agreement and cooperation in the field of urban development.

It also includes an MOU cooperation in social welfare, women, persons with disabilities empowerment, family, children and community development.

There is also an MOU on preventing and combating transnational crimes and an MOU on cooperation in the higher education sector.

The JS-SEZ, which encompasses an area of 3,505sq km, is a unique initiative between Malaysia and Singapore to promote both nations and attract investments.

Touted as an investment gateway to the Asean market, it is expected to strengthen business collaboration between Singapore, the Iskandar Malaysia economic corridor and the Pengerang petrochemical hub.

The key attractions of the special zone will include a passport-free immigration system and improved passenger rail lines between Johor and the city-state.

Target sectors of the JS-SEZ include manufacturing, logistics, digital, industry, healthcare and education.

Anwar said Malaysia is looking forward to enhancing bilateral relations, particularly with the JS-SEZ, which to him was a spectacular move within the region as well as internationally.

Wong said there were many advantages for foreign investors to invest at the JS-SEZ.

“They should look at the entire ecosystem, not Johor by itself or Singapore by itself, but as an ecosystem that complements one another.

“There are also many strengths that we can harness from both sides that will allow both to be more competitive, enhance our value proposition and jointly attract more investments to our shores,” he said.

“We already have existing incentives for businesses who want to expand overseas, and those businesses from Singapore can tap into those incentives,” said Wong.

“The greater potential from the project is not just Singapore business going to Johor, but it is about both sides working together to attract new investment projects globally.

“If we can come together, which we intend to market the JS-SEZ together, and promote it as a combined destination, it will attract global investments to our respective countries,” he said.

Wong and his delegation arrived in Malaysia on Monday for the 11th Malaysia-singapore Leaders’ Retreat.

The annual retreat was established in 2007, serving as a cornerstone of Malaysia-singapore relations and the highest-level bilateral platform.

Source: The Star

JS-SEZ a rare feat, says Anwar

The Johor-Singapore Special Economic Zone (JS-SEZ) aims to create 20,000 highly skilled jobs in the next 10 years, says Rafizi Ramli.

This is achieved by getting firms to implement 100 projects within that time in the 3,505sq km zone, said the Economy Minister.

The zone covers six cities and townships in Southern Johor – Johor Baru, Iskandar Puteri, Pasir Gudang, Kulai, Pontian and Pengerang.

“Through this agreement, Malaysia and Singapore will pool together each of their strengths to develop a special economic zone.” Rafizi said after the signing of the JS-SEZ agreement by Malaysia and Singapore yesterday in Kuala Lumpur.

“Malaysia’s abundant land and an established industrial base will complement the technological expertise and financial networks of Singapore to turn the JS-SEZ into one of the most attractive investment destinations in the world,” he added in a Facebook post after the signing ceremony.

The JS-SEZ is inspired by zones such as Shenzen and Suzhou in China, where global firms are encouraged to expand their operations by leveraging the advantages of both Johor and Singapore.

Among the competitive advantages of setting up shop in the JS-SEZ are affordable land and labour prices and a favourable tax regime, according to documents shown by the ministry.

The JS-SEZ will focus on 11 industry sectors, including manufacturing, logistics, energy, and the digital and green economies, that are spread across nine flagship zones.

They are Johor Baru city centre, Iskandar Puteri, Tanjung Pelepastanjung Bin, Pasir Gudang, Senaiskudai, Sedenak, Forest City, the Pengerang Integrated Petroleum Complex and Desaru.

In a special briefing last week ahead of the signing ceremony, Rafizi announced five new priority fields for the JS-SEZ: aerospace, medical devices, electrical and electronics, chemicals and pharmaceuticals.

He also said that if the zone can get 50 projects up and running in the next five years, it would create a critical mass that will enable the area to reach 100 projects in 10 years.

He added that firms looking to expand their operations in the JS-SEZ can apply for support to get new roads, water and electricity lines via a special infrastructure fund.

The fund will allow investors to apply for infrastructure tailormade to their projects without having to go through the conventional but much lengthier government budget process.

“For the JS-SEZ, we have set aside a fund that can be used straight away on a project-by-project basis that is driven by the type of investment.

“They can ask what infrastructure they need for their projects, and we will work with all the agencies necessary to get what they need,” Rafizi said during the briefing.

Other financial carrots, such as special tax rates, will be announced by the International Trade and Industry Ministry, he added.

Source: The Star

Rafizi: Area will create 20,000 skilled jobs in 10 years

The Johor-Singapore Special Economic Zone (JS-SEZ) will bring a positive transformation to the state, says Mentri Besar Datuk Onn Hafiz Ghazi.

“Not only will the zone bring more economic opportunities, it will also leave a positive impact on Johor’s development.

“I believe the zone will open more doors for businesses and improve economic ties between Malaysia and Singapore.

“It will create more high-paying job opportunities, increase investments and strengthen major sectors in the state,” he said in a Facebook post following the exchange of the joint agreement between Malaysia and Singapore to develop the JS-SEZ yesterday.

Onn Hafiz said the agreement was a culmination of in-depth discussions and preparations made by both countries to ensure the initiative reaches the intended goals.

He hopes that all the plans will be implemented well to benefit the people in Johor and the rest of the country.

State investment, trade, consumer affairs and human resources committee chairman Lee Ting Han views the JS-SEZ agreement as a new chapter in the region’s economic development.

“This is in line with the international trend, integrating economy, sustainable development and high technology.

“Johor’s strategy for the JS-SEZ is to leverage on our position as the gateway to Asean, an economic bloc with a population of more than 680 million and GDP of US$3.9 trillion in 2023,” he said.

Lee said the state government had drawn up a plan for the zone to achieve the targeted sustainable and comprehensive development goals.

“We are expecting to see gradual economic growth in the JS-SEZ in the next five to 10 years, depending on the implementation phases and our attractiveness to international investors.

“In the starting phase, our focus will be on infrastructure development such as the Johor-singapore Rapid Transit System Link and other supporting facilities.

“We are also looking at attracting investors in petro-chemical, chemicals, data centres and medical equipment, which Johor already has the existing ecosystem for,” said Lee, who accompanied Onn Hafiz for an official visit to Qatar to secure investments.

Yesterday, Prime Minister Datuk Seri Anwar Ibrahim and his Singapore counterpart Lawrence Wong witnessed the exchange of the joint agreement, which took place during the 11th Malaysia-singapore Leaders’ Retreat in Putrajaya.

The highly-anticipated exchange comes close to a year after a memorandum of understanding was signed by the two countries on Jan 11, 2024 in a historic move to jointly develop the JS-SEZ.

Source: The Star

Special economic zone set to elevate Johor

The Johor-Singapore Special Economic Zone (JS-SEZ) exemplifies Malaysia’s commitment to regional integration, particularly as the country assumes the ASEAN Chairmanship this year, said Transport Minister Anthony Loke.

With Malaysia’s ASEAN Chairmanship 2025 theme of “Inclusivity and Sustainability”, he emphasised that Malaysia is dedicated to strengthening regional ties.

“ASEAN’s collective gross domestic product is projected to surpass US$6 trillion (US$1=RM4.48) by 2030, and Malaysia is determined to play a leading role in this growth story.

“Projects like the JS-SEZ exemplify our commitment to regional integration. By fostering innovation and attracting investment, the JS-SEZ is set to become a beacon of economic collaboration,” he said in his keynote address at the CGS International Securities Malaysia Sdn Bhd’s 17th Annual Malaysia Corporate Day here, today.

Similarly, he noted that the ASEAN Highway Network and Trans-ASEAN Gas Pipeline initiatives underscore the country’s commitment to enhancing connectivity and energy security across the region.

“I think one advantage we have in this region is that we have good neighbours around us,” he said.

“This is our natural advantage. There are not many parts of the world where people can live harmoniously and peacefully. Even though we may be competing with ourselves, we are always looking for ways to collaborate and work together,” he added.

Loke quoted Malaysia’s Prime Minister Datuk Seri Anwar Ibrahim and Singapore’s Prime Minister Lawrence Wong from their joint press conference earlier this morning, where they emphasised that the race is no longer between ASEAN countries but between the rest of the world.

“We must strengthen ourselves regionally and bolster our position within ASEAN while increasing business within ASEAN. This is a major growth region, and Malaysia is best positioned to lead this effort, especially as we have just assumed the ASEAN chairmanship this year,” he said.

“I’m confident that our Prime Minister and the rest of the government will do their best to elevate Malaysia’s profile and play a leadership role in enhancing regional cooperation and collaboration,” he said.

During the same event, at a fireside chat session, Loke highlighted that the logistics sector is one of the key pillars of the JS-SEZ, aimed at attracting more investment and encouraging the relocation of logistics operations from Singapore to Johor, noting that it makes more sense to have bigger warehouses in Johor.

“Singapore still holds certain advantages with its airports, ports, and trading infrastructure.

“However, I believe many back-end operations can be relocated to Johor. We hope to work with operators, port authorities, and others to provide more space and land for this purpose,” he added.

Source: Bernama

Malaysia ASEAN: JS-SEZ exemplifies Malaysia’s commitment to regional integration – Loke

The Johor-Singapore Special Economic Zone (JS-SEZ) is set to strengthen economic ties between Malaysia and Singapore while attracting diverse investment opportunities, according to industry experts.

They believe the economic zone is well-positioned to meet the government’s target of securing 100 projects within its first decade, with Singapore playing a key role.

Dr. Azmi Hassan, senior fellow at the Nusantara Academy for Strategic Research, highlighted the significance of the three newly designated flagship zones in boosting the SEZ’s potential, particularly in the specialised sectors assigned to each zone.

“These three areas have specialities that can facilitate the SEZ. The government’s aim to achieve 100 projects also will not be an issue because Johor is not working alone. Singapore has proven they can provide for the sectors needed to be expanded within the SEZ,” he told Business Times. 

Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said Malaysia needs a spark that would attract foreign and domestic investors amid uncertainties in the global economy and market.

He said the JS-SEZ would clearly pave the way for more infrastructure investment such as logistics, utilities, and talent pool. 

It will have spillover effects, as the potential business centres and manufacturing hub will lead to township development, attracting a talent pool that would need to reside in close proximity to or within these areas.

“Furthermore, geographically, historically, and culturally, I think it is high time Malaysia and Singapore should forge closer ties when it comes to investment and trade. 

“The next hurdle would be how both countries can speed up the implementation knowing that there would be challenges from the regulatory and bureaucracy front,” he added.

Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Datuk Ng Yih Pyng said effective planning, monitoring, coordination, and enhanced communication of both countries are critical as it affects the performance and deliverables of the zone as well as the trust of both countries. 

He stated that the identified projects must be implementable and doable within a clear timeline and the resources needed. 

“The effective implementation of the SEZ will deepen the economic partnership between Malaysia and Singapore, spurring cooperation and significant investment opportunities in diverse sectors and enhancing regional connectivity,” he said.

Ng also urged domestic SMEs to explore the numerous opportunities, finding suitable partners to invest in the zone. 

“More importantly, the government must ensure that domestic industries will benefit from foreign direct investment in the SEZ through technology transfer, sharing of expertise, and creation of job opportunities for local people,” he added.

OCBC Bank (Malaysia) Bhd chief executive officer Tan Chor Sen said the JS-SEZ has the potential to be a magnet for international capital through the various initiatives that have been announced.

These include the passport-free QR code clearance at Singapore’s land checkpoints with Malaysia, the Invest Malaysia Facilitation Centre–Johor (IMFC-J), technical and vocational education and training (TVET)-related initiatives, and streamlined customs procedures for land intermodal transhipments. 

“We are particularly excited about the move to explore enhancing market access of financial institutions in both countries and the tax incentive packages,” Tan said.

Malaysia and Singapore today kicked off the much-awaited JS-SEZ with the ambitious target of attracting 100 projects in 10 years.

The JS-SEZ now covers the Iskandar development region, Forest City, Pengerang Integrated Petroleum Complex, and Desaru, a land area of 357,128 hectares.

The Iskandar development region also covers Johor Bahru City Centre, Iskandar Puteri, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai, and Sedenak. 

It also covers new priority sectors such as aerospace, electrical and electronics, chemical, medical devices, and pharmaceuticals. These are in addition to other sectors such as business services, the digital economy, healthcare, manufacturing, tourism, education, logistics, energy, and food security. 

“Both countries are committed to promoting the expansion of 50 projects for the first five years and accumulating 100 projects in the first 10 years. What we want to do is really populate the SEZ with the right portfolio and investors,” Economy Minister Rafizi Ramli told media and analysts in a briefing last week.

“I feel that the first wave of takers in the next five years are those global companies looking to manage their geopolitical risks. We have an advantage because of ASEAN’s viability as a major economy in the next 15 years”.

Rafizi also said that energy transition companies will be the main targets for the economic zone because of the growth in data centres.

Source: NST

JS-SEZ will strengthen economic ties between Malaysia and Singapore: experts

Singapore and Malaysia are looking to expand cooperation into areas such as electricity trading and renewable energy cooperation.

This is on top of existing infrastructure projects such as the Johor-Singapore Special Economic Zone (JS-SEZ) for business and investment, and the Johor Baru-Singapore Rapid Transit System (RTS) Link, which is slated to start operations by end-2026.

Speaking to Singapore media on Tuesday (Jan 7) at the end of the 11th Malaysia-Singapore Leaders’ Retreat in Putrajaya, Malaysia, Prime Minister Lawrence Wong said one major project in the works is the import of electricity from Sarawak via undersea cables.

This would build on positive momentum from the increase in capacity of the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project.

The inaugural flow from Malaysia to Singapore began in September 2024, with almost 8,000 megawatt-hour (MWh) of electricity being traded to date under phase two of the project.

Besides the JS-SEZ agreement, six memorandums of understanding and a letter of intent which were exchanged on Jan 7 at the Leaders’ Retreat, where Wong was hosted by Malaysian Prime Minister Anwar Ibrahim.

Areas covered included carbon storage and capture and carbon credits cooperation.

The annual retreat is a platform for leaders of both countries to set the overall direction for bilateral cooperation.

The RTS Link is also making good progress and is on track for completion, PM Wong said.

When ready, it can carry up to 10,000 people an hour in each direction between Bukit Chagar and Woodlands North, easing congestion on the Causeway.

PM Wong was asked about the RTS Link’s potential impact on Singapore businesses.

He said he has heard concerns, especially from businesses in the Woodlands area, that more Singaporeans will shop in Johor when the RTS is operational.

But disruption to retail businesses is already happening, with competition either physically or online, he said.

“It’s too early to tell how it will impact business because perhaps it will mean more Singaporeans going over to Johor for shopping, but it can also mean… more Malaysians coming to Singapore,” he said, noting that a lot of the businesses in the north already cater to that Malaysian traffic, particularly day-trippers coming into Singapore to work.

“So what’s clear is, whether we have the RTS or not, the nature of business is constantly changing,” he said.

The Government will continue to support heartland businesses and encourage them to think of new business models and offerings to enlarge their market, he said, adding that they can also expand online and attract new customers.

“There will always be new models, new competition, new disruptions, and businesses have to adapt to all of that… You have to adapt, you have to adjust, you have to update your offerings in order to appeal to new customers.”

Source: The Straits Times/ANN/The Star

Electricity trading, renewable energy among new areas of Singapore-Malaysia cooperation

Penang has achieved several significant milestones in 2024, showcasing strong economic growth and social development, including attracting investments totalling RM31.38 billion.

Chief Minister Chow Kon Yeow said these investments are expected to create over 6,600 job opportunities, particularly in the high-value manufacturing sector, advanced services, and modern agriculture.

“Additionally, Penang recorded the third-highest compliance rate for Employees Provident Fund contributions nationwide at 99.15 per cent, and solidified its position as a leading medical tourism hub in Southeast Asia,“ Chow said during his address at the Public Service Members Assembly at Dewan Seri Pinang today.

As of Dec 2, 2024, he shared that 306 projects under the 12th Malaysia Plan (12MP) have been approved for Penang, including 246 new initiatives under the 4th Rolling Plan (RP4) and 60 continuation projects, with a total cost of RM28.4 billion.

Chow noted that RM1.35 billion was allocated for 2024, of which RM1.11 billion, or 81.76 per cent, has been utilised.

Under the 5th Rolling Plan (RP5) of the 12MP, 10 priority projects have been listed in the Penang State Wishlist Module within the MyProjek System; of these, he said eight projects have been accepted for consideration by the Ministry of Economy.

“I hope that our Federal ‘extended family’ will prioritise Penang’s proposed projects, as they are significant, including road construction, coastal erosion prevention structures, health clinic development, and other essential initiatives,“ he said.

On the ASEAN-Malaysia Chairmanship 2025, Chow highlighted Penang’s pivotal role in hosting regional programmes, aligning with Malaysia’s aspirations and ASEAN’s collective goals.

“Penang, also known as the Pearl of the Orient, will host several key ASEAN meetings, cultural events, and high-impact economic and tourism initiatives,” he said.

Malaysia officially assumes the ASEAN Chairmanship on Jan 1, 2025, with the theme “Inclusivity and Sustainability,“ symbolising the nation’s vision for a united and prosperous ASEAN region.

Source: Bernama

Penang secures RM31.38 billion in investments for 2024 – Chow

Malaysia and Singapore kicked off the much-awaited Johor-Singapore Special Economic Zone (JS-SEZ) today. Here’s what you need to know:

Malaysia and Singapore signed a memorandum of understanding on January 11, 2024 to work on the plans for the JS-SEZ.

Almost a year later, Malaysia’s Minister of Economy, Rafizi Ramli and Singapore’s Deputy Prime Minister and Minister for Trade and Industry, Gan Kim Yong signed a agreement on the economic zone on Jan 6, 2025.

The agreement is not final yet and is expected to be made official by the third quarter of 2025.

The Malaysian and Singapore governments have committed to attracting 100 projects in 10 years to the economic zone, with the intent of creating 20,000 skilled job opportunities in the JS-SEZ.

Malaysia and Singapore will promote and facilitate investments in 11 economic sectors from third countries and Singapore companies expanding into the JS-SEZ.

Facilitate development of renewable energy (RE) projects to accelerate RE trading between Malaysia and Singapore.

The two countries will also cooperate on movement of people and goods; talent development and ease of doing business.

The economic zone which spans 357,128 hectares, covers the Iskandar development region and three additional areas.

JS-SEZ will be made up of Johor Bahru City Centre, Iskandar Puteri, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai and Sedenak, Forest City, Pengerang Integrated Petroleum Complex and Desaru.

Known as flagship zones, each areas will champion projects from different vital sectors of the economy.

JB City Centre will be pushed as a zone for business services, digital economy and health.

Iskandar Puteri will focus on manufacturing, business services, digital economy, education, health and tourism.

Tg Pelepas-Tg Bin  and Pasir Gudang and PIPC will be the zones for manufacturing, energy and logistics.

Senai-Skudai for manufacturing, digital economy, education, logistics and tourism.

Forest City will focus on financial services as it serves as a special financial zone.

Sedenak will house projects for the most sectors – manufacturing, business services, digital economy, education, energy, food security, health, logistics and tourism.

While Desaru will run education, food security, health and tourism.

Besides the sectors mentioned, the JS-SEZ also covers new priority sectors such as aerospace, electrical and electronics, chemical, medical devices and pharmaceuticals.

Economy Minister Rafizi Ramli said both countries’ approach with regards to the incentive structure will be driven by “sheer potential” of the JS-SEZ in terms of geographical location.

Singapore and Malaysia will design the fiscal incentives separately.

Among the incentives on offer by Malaysia include special corporate tax and personal income tax rate for companies that undertake new investments in high growth, and high value-added activities within the JS-SEZ.

The Malaysian government will establish a fund for purposes of infrastructure support for the economic zone.

The Singapore government will design funding support to facilitate the expansion of Singaporean companies in the economic zone.

Malaysia will establish the Invest Malaysia Facilitation Centre – Johor (IMFC-J) to act as a one-stop centre in facilitating investments and businesses in the JS-SEZ.

Source: NST

Everything you need to know about the Johor-Singapore Special Economic Zone

Malaysia and Singapore today kicked off the much-awaited Johor-Singapore Special Economic Zone (JS-SEZ) with the ambitious target of attracting 100 projects in 10 years.

The JS-SEZ now covers the Iskandar development region, Forest City, Pengerang Integrated Petroleum Complex and Desaru, a land area of 357,128 hectares.

The Iskandar development region also covers Johor Bahru City Centre, Iskandar Puteri, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai and Sedenak. 

It also covers new priority sectors such as aerospace, electrical and electronics, chemical, medical devices and pharmaceuticals. These are in addition to other sectors such as business services, digital economy, healthcare, manufacturing, tourism, education, logistics, energy and food security. 

“Both countries are committed to promoting the expansion of 50 projects for the first five years and accumulating 100 projects in the first 10 years. What we want to do is really populate the SEZ with the right portfolio and investors,” Economy Minister Rafizi Ramli told media and analysts in a briefing last week.

“I feel that the first wave of takers in the next five years are those global companies looking to manage their geopolitical risks. We have an advantage because of Asean’s viability as a major economy in the next 15 years,”.

Rafizi also said that energy transition companies will be the main targets for the economic zone, because of the growth in data centres.

The Malaysian government will establish a fund for purposes of infrastructure support while the Singapore government will design funding support to facilitate the expansion of Singaporean companies in the economic zone.

It will also look into the potential of twinning operations of multinational companies in Singapore and JS-SEZ.

“The government expects more people to move to Johor. It has yet to make any decisions but discussions on commitments to upgrade Johor’s public transport have taken place,” said Rafizi.

Pro business policies and incentives

Rafizi said that Malaysia’s pro business policies and incentives will drive business growth in the economic zone. There will be special corporate tax and personal income tax rate for companies that undertake new investments in high growth and high value-added activities within the JS-SEZ.

The special personal income tax rate will be announced by the Finance Ministry at a later date.

Other incentives include for relocating to Malaysia and green technology, Global Services Hub incentive and Pioneer Status and Investment Tax Allowance. On the quantum of investment expected, the minister said the government will only be able to identify that after the agreement was signed.

“After the agreement is signed, we will be able to identify more notes and clusters that will allow the government to work closely with investors to prepare those areas to make it palatable for them to move in. Most probably this will function more on a project to project basis,” he added.

Source: NST

100 projects in 10 years: Johor-Singapore Special Economic Zone kicks off

While the Johor-Singapore Special Economic Zone (JS-SEZ) deal, scheduled to be signed today, promises job creation and economic benefits, experts say its success will depend on regulatory alignment, strong leadership and seamless cross-border collaboration.

Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said leadership and commitment are the foundational pillars of the SEZ.

“Hopefully, we secure a win-win outcome. Top leadership must be committed and that commitment must cascade down to those driving the SEZ,” he told StarBiz.

Similarly, public policy analyst Adib Zalkapli stressed the importance of regulatory alignment.

“I think one of the most important measures to make JS-SEZ a success is to harmonise existing regulations of the two countries to create a seamless business environment,” he noted.

He also pointed out that strong bilateral relations and political stability in Malaysia would be essential for the SEZ’s long-term success.

Lee highlighted the need to reduce bureaucracy and improve processes for investors and cross-border movement.

“What investors want is reduced bureaucracy, easy entry. For the causeway, you need to make people-to-people movement simple and easy,” he added.

He also stressed the need for seamless collaboration among federal, state, and local authorities for the SEZ to be successful.

“Customs and immigration are federal matters, so federal, state and local councils must work together to coordinate and quickly address areas that need improvement,” Lee explained.

While he acknowledged that the full benefits of the SEZ may not be immediate, Lee is optimistic about its long-term impact.

“In the shorter term, we may not see its full potential. But when investments kick off and create jobs, there will be a lot of spillover effects on the local economy, helping to boost not just Johor’s economy but the nation’s as well,” he said.

Johor’s contribution to Malaysia’s gross domestic product (GDP) has remained steady at around 9.5% in recent years, registering 9.5% in 2023.

This is despite the state accounting for 12.3% of the country’s population, or 4.1 million people and 12.7% of the national labour force, which totals 16.4 million people.In comparison, Selangor leads with a 26% share of GDP, followed by the Federal Territory of Kuala Lumpur, including Putrajaya, at around 16%.

Johor’s GDP per capita has grown from RM30,469 in 2015 to RM41,902 in 2023, according to data from the Statistics Department.

However, this remains below the 2023 national average of RM54,612 and significantly behind Kuala Lumpur at RM131,038 and Penang at RM72,586.

For context, Singapore’s GDP per capita in 2023 stood at S$113,779.

The JS-SEZ spans over 3,500 sq km – four times the size of Singapore.

It stretches across six districts in Johor, including Johor Baru, Iskandar Puteri, Pasir Gudang, Pontian, Kulai, and Kota Tinggi, covering areas from Kulai and parts of Pontian to Pengerang.

According to Johor officials, the JS-SEZ has the potential to generate 100,000 new jobs and contribute US$26bil annually to Malaysia’s economy over the next six years.

Johor’s GDP contribution in 2023 stood at US$37.6bil.

Economy Minister Rafizi Ramli once described the partnership as a “perfect match,” highlighting the synergy between Singapore’s sophistication and Malaysia’s cost and resource advantages.

Source: The Star

Unleashing the potential of JS-SEZ

THE year 2024 has been a blockbuster one for Malaysia in terms of investment announcements, as global big names Microsoft Corp, Google LLC and more recently Oracle Corp disclosed multiyear billion ringgit investments into the country. The momentum has continued to build up from the news flow in 2023, with YTL Power International Bhd’s planned artificial intelligence (AI) cloud and supercomputer facility powered by Nvidia Corp; Amazon Web Services’ cloud computing infrastructure; and Vantage Data Centre’s data centre campus.

The investments announced in 2024, which are yet to be registered as approved investments by the Malaysian Investment Development Authority (Mida) at this point, are indications of what is to come in the years ahead for the approved foreign investment (FI) numbers.

Notably, Google and Microsoft’s applications are in the evaluation stage and are expected to receive approval by the first quarter of 2025, according to the Ministry of Investment, Trade and Industry (Miti).

For now, Malaysia’s cumulative nine-month approved FI for 2024 (9M2024) looks decent, although some would say it could be difficult for the full-year number to surpass the amount recorded in 2023.

With another quarter left to be accounted for and no guarantee that the numbers for approved FI will look better than the previous year’s, Minister of Investment, Trade and Industry Tengku Zafrul Tengku Abdul Aziz reminds observers to look at the bigger picture.

“What is most important is that the overall investments have increased by 10.7%. These numbers are encouraging as a total of 4,753 new projects have been approved during this period, set to create 159,347 new jobs for Malaysians. This strong performance underscores Malaysia’s enduring appeal to investors, particularly domestic investment (DI), which accounted for a significant 58.1% of the total approved investments, valued at RM148 billion.

“It is good to see increased domestic businesses’ show of confidence in the government’s clear policies, and these businesses’ commendable resilience even in challenging times,” he says, adding that the higher total investment figure is a reflection of overall investor confidence in the government’s economic and reform initiatives, as well as renewed interest in this region’s investment potential.

According to Mida, the 9M2024 approved FI amounted to RM106.7 billion, representing 41.9% of the total approved investments of RM254 billion. The higher proportion of 58.1% is attributed to DI. Note that the 9M2024 approved FI is lower than the RM125.7 billion approved FI recorded for 9M2023, when the total approved investments amounted to RM230.20 billion. Nevertheless, announcements on investments from global players coming into Malaysia created a buzz and gained coverage in the foreign media while contributing to lifting the local bourse.

Where did investment growth come from?

There are two main sectors of approved investment recorded by Mida, being services and manufacturing. The primary sector constitutes a small portion of overall investment.

The services sector makes up the bigger portion of approved investments and is typically driven by DI. On the other hand, the manufacturing sector has made up 30% to 45% of total approved investments each year in the last decade, with the exception of 2021, and is typically driven by FI and investments in the electrical and electronics (E&E) industry.

For 9M2024, services made up 63.1% of the total approved investments, where RM121.5 billion came from DI and RM39.2 billion was derived from FI. The top three service subsectors were information and communications (RM71.1 billion), real estate (RM48.8 billion) and support services (RM10.3 billion).

(Refer to the chart “Manufacturing sector sees more FDI investments than services” on facing page.)

Meanwhile, the manufacturing sector constituted 34.9% of total approved investments for 9M2024, where RM66.9 billion stemmed from FI and RM21.9 billion from DI. The top three subsectors were E&E (RM47 billion), chemicals and chemical products (RM7 billion) and transport equipment (RM7 billion).

The top foreign investors for 9M2024 were Germany, with approved investment of RM30.9 billion, followed by China with RM10.8 billion and the US at RM8.4 billion.

Not at the top, nor at the bottom

It is well documented that the Asean region has been a prime beneficiary of the China-US trade war that started under President Donald Trump in 2018. Businesses — both global and Chinese — quickly moved to diversify geographically, adopting a “China + 1” strategy to mitigate the potential impact from the trade war.

On account of this, foreign direct investment  (FDI) inflows into the region have also increased since the start of the trade war. Malaysia ranks fourth in Asean, behind Singapore, Indonesia and Vietnam, according to 2023 data by United Nations Trade and Development (Unctad).

Unctad defines FDI inflows as cross-border investments in the form of financial instruments (equity and debt).

In 2023, Asean FDI inflows increased marginally by US$1 billion to a record US$230 billion against a backdrop of declining global FDI inflows.

Singapore has been a clear leader as a recipient of FDI inflows in Asean. In 2023, the city state’s FDI increased 13% to US$160 billion, accounting for 69% of the FDI inflow. One of the main reasons for the growth in FDI in Singapore is the growth in investments in the finance sector and a significant rise in investments in professional and administrative support services, including family offices, research and development and regional headquarters, according to the Asean Investment Report 2024.

A large part of the rise in the FDI for Singapore stemmed from US firms, which UOB Global Economics and Markets Research opines in a Sept 2 note, it is highly probable some of the flows coming through Singapore to Malaysia originated from American or European companies.

In 2023, Malaysia’s FDI inflows declined to US$8.7 billion from US$16.9 billion in 2022. But on a cumulative basis, FDI inflows for Malaysia jumped 10.6% per annum between 2020 and 2023, compared to a compound annual growth rate of 7.7% between 2014 and 2019, noted UOB.

While not at the top of the league, economists believe that Malaysia continues to be in a sweet spot for attracting and increasing FDI inflows, on account of better economic growth prospects, enhanced investment climate and supportive business ecosystem.

The Associated Chinese Chambers of Commerce and Industry of Malaysia’s Socio-economic Research Centre executive director Lee Heng Guie adds that the various economic transformation plans under the Madani Economy framework, such as the New Industrial Master Plan (NIMP) 2030, National Energy Transition Roadmap (NETR) and New Semiconductor Strategy (NSS) and Mid-Term Review of the 12th Malaysia Plan, are set to enhance investment opportunities for investments in high-growth high-value sectors.

“Malaysia still needs to constantly enhance her investment climate, maintaining policy consistency and clarity, as well as ensuring good execution of policies to sustain the continued inflows of quality FDI in an era of economic complexities and also contending with stiff competition from regional players such as Indonesia, Vietnam and Singapore,” he says.

While the government has embarked on a series of reforms to address competitiveness issues, Lee also opines that the government needs to redouble efforts to reduce business pain points, address structural impediments and situational challenges.

It is more pressing now than ever to double down on such efforts, given how the Trump administration next year is causing much uncertainty surrounding steep tariffs that it has threatened to slap on China. On the other hand, if blanket tariffs were to be implemented, it could disrupt exports, heighten costs and potentially lead to a new round of currency weakness, notes UOB.

There are also questions surrounding trade surpluses, where countries with big trade surpluses with the US, apart from China, could also be a “target” for import tariffs.

Malaysia’s trade surplus with the US has widened from RM23.4 billion in 2017 to RM72.3 billion in 2023, notes Lee.

Future proofing against external threats

Tengku Zafrul says it is inevitable that Malaysia is impacted by potential tariff hikes on China, given the economic interdependence between Malaysia and China.

Nevertheless, Miti seems prepared to mitigate the effects as much as possible by diversifying the country’s market base. One is by focusing its efforts on attracting investments from other countries apart from the US and China.

He also highlights how Malaysia has been actively expanding its market base, forging deeper ties with countries like the Krgyz Republic, Kazakhstan and Uzbekistan while the 16 signed and implemented Free Trade Agreements and bilateral and regional FTAs would help to diversify the export profile and market and bolster supply chain resilience.

“This multifaceted approach helps create a more stable economic environment less susceptible to external shocks,” he adds.

The minister also says that major manufacturing supply chains take years to be reconfigurated, indicating that there are still opportunities for trade diversification by global companies, as investors favour regions that are seen as neutral — an advantageous position for Malaysia and Asean.

“All these bode well for further reshoring, near-shoring and friend-shoring of supply chains to Southeast Asia, and Malaysia. To retain and enhance these investments, Malaysia’s biggest leverage lies within Asean’s principle of neutrality and centrality.

“The Asean chairmanship will enable Malaysia to further leverage this stance; Asean’s collective advantages and market size; as well as Asia’s current status as the world’s growth engine, accounting for 60% of global growth this year,” he explains.

Malaysia will take on the role of Asean chair for one year from Jan 1.

There is also the country’s participation in major trade blocs such as the Regional Comprehensive Economic Partnership and Comprehensive and Progressive Agreement for Trans-Pacific Partnership that can help to cushion against the unilateral imposition of tariffs and open access to alternative markets.

“Moving up the value chain and promoting industries like AI, electric vehicles, and green energy would make Malaysia less vulnerable to global trade disruptions,” Tengku Zafrul says.

What would 2025 look like for investment?

As uncertain as the outlooks for 2025 may be, many are optimistic, albeit cautiously, of the prospects for foreign investment in 2025.

A strengthening economy, financial resilience, stable political conditions, reforms and strategic positioning have been among the reasons touted by Malaysia for foreign investors this year. Investors have bought the idea, evident by the return of foreign inflows into Malaysia, and will continue to make Malaysia an attractive destination for investors in the year ahead.

“Based on approved investment data up to 9M2024 thus far, the outlook for both private FI and DI looks promising. In recent months, many companies have decided to establish Malaysia as their services hub, in line with its rising attraction as a data centre hub for the region.

“Those MNCs (multinational corporations) include Ant International (digital business hub which will tap local tech talent to drive its global operations); Zimmer Biomet (a world leader in medical technology) and the London Stock Exchange Group,” shares Tengku Zafrul.

He adds that these investors have said that Malaysia is not only a strategic location but also has excellent digital infrastructure — a result of the digital investments approved over the years.

“Based on the 9M2024 approved investment figures, coupled with various public announcements by MNCs on establishing Malaysia as their regional or global hub, we can expect a similar level of investor confidence as we head into 2025. 

“Miti strongly believes that investor confidence is also anchored on our strong implementation rate of over 82% for approved investments, as well as strong execution of policies such as NIMP 2030, NSS, GIS or NETR,” he says.

However, Mida admits that attracting investment is becoming increasingly challenging in today’s landscape as investors become more discerning and demanding. 

“Malaysia’s tax system is undergoing reform to attract quality investments and adapt to globalisation. The Global Minimum Tax framework necessitated re-evaluation of corporate tax structures, and Mida has worked with policymakers to ensure competitiveness while complying with international standards,” says Mida, adding that the country has pivoted to incentives beyond taxes, such as grants, infrastructure support and streamlined regulatory processes to attract investment. 

Source: The Star Malaysia

Stories Of The Year: A blockbuster year for foreign investment

 For business groups here, today’s signing of the highly anticipated Johor-Singapore Special Economic Zone (JS-SEZ) agreement heralds better economic opportunities.

“The signing of the SEZ is definitely a positive development. With this, we hope that Johor and Singapore can complement each other further such as in areas of human resources and land,” said South Johor Small and Medium Association president James Tan Tien Chong.

He added that the signing is a major development for Johor and could help strengthen ties with neighbouring Singapore.

“Such cooperation will be beneficial for both sides and will allow us to share a larger market, with the combined population of Johor and Singapore,” he said.The SEZ could also encourage Johoreans working in Singapore to return to the state as there would be more opportunities for them, Tan said in an interview.

The SEZ will encompass an area of 3,505sq km that includes Johor Baru, Iskandar Puteri, Pasir Gudang, Kulai, Pontian and Pengerang.

Among its targets is to get global firms as well as companies based in Singapore and Johor to expand their operations into the area.Prime Minister Datuk Seri Anwar Ibrahim and his Singaporean counterpart Lawrence Wong will sign the agreement today in Putrajaya.

Wisma Putra said in a statement yesterday that Wong would be accorded a welcoming ceremony at the Perdana Putra Complex in Putrajaya.

Besides the joint agreement on the JS-SEZ, there would also be six memoranda of understanding, and one letter of intent on education, women and social welfare, climate change, carbon capture and storage, urban development and fighting transnational crimes, said the statement.

Johor Baru Petty Traders and Small Business Owners Association secretary Mohammad Salezan Mohd Salleh expressed hope that the SEZ would create more jobs for the people.

“We welcome the SEZ as we know it could spur the local economy and provide better opportunities for the public,” he said.

However, he said there were concerns that the economic development would cause a surge in the price of goods in the state, especially in Johor Baru.

“I hope the state and federal governments will keep a close eye on this to ensure that locals benefit from the economic spillover of the SEZ,” Mohammad Salezan added.

Johor Indian Chamber of Commerce and Industry secretary-general Datuk K. Krishnan echoed similar sentiments, noting that inflation is already a major issue.

“The rental rate for shops in Johor Baru has increased fourfold compared to just a few years ago. This is on top of the rising prices of goods and the increase in minimum wage.

“We are concerned about this, though we view the SEZ as a positive step forward for Malaysia and Johor.

“Eventually, the people and businesses would have to adapt but there should be some form of support, at least during the initial implementation period of the SEZ,” Krishnan said.

Source: The Star

Business groups welcome SEZ

Malaysia recorded a trade value of RM2.62 trillion from January to November 2024, an 8.7 per cent year-on-year (y-o-y) increase, said Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz.

In a Facebook post on Malaysia’s achievements for 2024, Tengku Zafrul highlighted that 50 per cent of the initiatives under the New Industrial Master Plan 2030 (NIMP 2030) have been or are in the process of being implemented since its launch in 2023.

“This includes the National Semiconductor Strategy (NSS) and Green Investment Strategy (GIS),“ he said.

He also noted that approved investments reached RM254.7 billion in the first nine months of 2024, marking a 10.7 per cent y-o-y growth.

“Nearly 160,000 new jobs will be created from almost 4,800 approved projects, representing a y-o-y increase of 76 per cent in job creation and 21 per cent in project approvals,“ he added.

As Malaysia takes on the ASEAN Chairmanship this year, Tengku Zafrul emphasised the Ministry of Investment, Trade and Industry’s (MITI) critical role in driving economic leadership for the region, fully realising the regional bloc’s economic potential.

This aligns with the chosen theme of Inclusivity and Sustainability.

“If we stay truly focused, I am confident the positive impact on the region will extend beyond Malaysia’s ASEAN Chairmanship,“ he said.

Source: Bernama

Malaysia records RM2.62 trillion in trade value for Jan-Nov 2024 – Tengku Zafrul

As 2024 draws to a close, the trade and investment landscape stands as a testament to Malaysia’s resilience and strategic vision amid global economic uncertainties.

The country’s trade performance in 2024 showcases steady growth, underpinned by its strong export-oriented economy.

International Trade and Industry Ministry and the Malaysia External Trade Development Corporation have played pivotal roles in shaping a year marked by significant achievements and forward-looking initiatives.

Robust and Resilience

According to Matrade, Malaysia’s trade demonstrated robust growth and resilience, marking a significant rebound after a challenging period.

In January, trade surged 13.3 per cent year-on-year (YoY) to RM234.73 billion, driven by a rise in exports and imports.

February maintained positive momentum with trade growing 3.3 per cent YoY to RM211.79 billion, despite a slight dip in exports.

By March, Malaysia achieved its highest historical first-quarter trade value of RM690.59 billion, reflecting a 7.1 per cent YoY increase and a trade surplus of RM34.22 billion.

The upward trajectory persisted into April, with trade expanding 12.1 per cent YoY to RM221.74 billion.

May saw the highest trade value since October 2022, with a 10.3 per cent YoY growth to RM246.31 billion, supported by strong exports of electrical and electronic (E&E) products and palm oil-based agriculture products.

June followed suit, achieving an 8.7 per cent YoY increase to RM237.81 billion, contributing to a first-half trade value of RM1.396 trillion, an 8.4 per cent rise over the corresponding period in 2023.

In the second half of the year, trade continued its growth streak.

July marked the fastest YoY growth rate in 21 months at 18.3 per cent, while August recorded a similar strong performance, with trade increasing 18.6 per cent YoY to RM252.65 billion.

By September, Malaysia’s cumulative trade value for the first nine months reached RM2.13 trillion, reflecting a 10.2 per cent YoY increase, with exports and imports rising by 5.2 per cent and 16.1 per cent, respectively.

The agriculture sector played a significant role in September’s growth, contributing to a 4.7 per cent YoY trade increase.

October reinforced Malaysia’s trade resilience, posting the highest periodic value ever at RM2.38 trillion for the first 10 months, with exports rising by 4.8 per cent YoY and imports by 14.6 per cent.

November continued this robust trend, achieving a record RM2.62 trillion in trade for the first 11 months, an 8.7 per cent increase compared to the same period in 2023.

The month also saw the 11th successive YoY trade growth, with exports rising 4.1 per cent and imports by 1.6 per cent, culminating in a trade surplus of RM15.29 billion, the highest in 14 months.

Investment Trend

Malaysia secured notable investments in the technology and digital sectors in 2024.

On May 30, Google announced plans to invest RM9.4 billion (US$2 billion), including the establishment of its first data center and Google Cloud region in the country.

The initiative aims to address the growing demand for cloud services globally and support artificial intelligence (AI) literacy programs for students and educators.

In September, Google Cloud signed a multi-year partnership with Dagang NeXchange Bhd (DNeX) to deliver sovereign cloud services in Malaysia, complementing its broader investment in the data center and cloud infrastructure.

In October, Oracle revealed plans to invest over US$6.5 billion to launch its first public cloud region in Malaysia, further strengthening the country’s position as a hub for digital innovation.

According to the Malaysian Investment Development Authority (MIDA), Malaysia approved RM254.7 billion of investments for the first nine months of 2024 (9M24), marking a steady 10.7 per cent increase from the previous year.

“The strong performance reflects Malaysia’s sustained economic momentum, propelled by the services, manufacturing, and primary sectors,” the authority said.

A total of 4,753 new projects were approved in 9M24, projected to generate 159,347 new jobs for Malaysians.

Domestic investments dominated during this period, accounting for 58.1 per cent of the total approved investments, valued at RM148 billion.

Meanwhile, foreign investments contributed RM106.7 billion, representing 41.9 per cent of the total.

Selangor led the way with RM66.8 billion in approved investments, followed by Kuala Lumpur (RM63.9 billion), Kedah (RM34 billion), Pulau Pinang (RM22.6 billion), and Johor (RM18.1 billion).

The top five foreign investment sources were Germany (RM30.9 billion), China (RM10.8 billion), the United States (RM8.4 billion), the Netherlands (RM4.9 billion), and Singapore (RM4.4 billion).

Trade and Investment Outlook

MIDF Research expects external trade to continue growing next year, with exports and imports to grow at 4.9 per cent and 4.5 per cent, respectively.

“We still expect the recovery in the E&E trade and increased demand for non-E&E commodities to support export growth in the coming months. Meanwhile, imports will continue to increase in line with growing domestic demand and business activities,” the firm said.

MIDF Research remains cautious that Malaysia’s external trade outlook may be adversely impacted by the escalation in geopolitical conflicts, weaker final demand from major markets and slowdown in global production and trade activities.

“The intensification of trade tensions between US and China (and other regions) and introduction of protectionist policy could also constrain global trade activity next year,” it added.

Universiti Kuala Lumpur Business School economic analyst Associate Professor Aimi Zulhazmi Abdul Rashid said the Malaysian economy has had a good momentum in 2024 and this needs to be maintained for 2025.

He said from a domestic perspective, the economy is both growing and stable, supported by the government’s fiscal policies that promote development and the central bank’s monetary measures, including maintaining the overnight policy rate (OPR).

Aimi said the efforts ensure financial market stability and adequate cash flow within the banking system.

“The approved investment approved for 2024 of RM254.7 billion must be executed quickly in 2025 so that it becomes an impetus for the national economy in the government’s efforts to make Malaysia a high-income country as targeted by the Malaysia Madani plan.

“This includes developing the aspect of micro, small and medium enterprises (MSMEs) which contribute 40 per cent of the country’s gross domestic product (GDP) and are employers of 60 per cent of the Malaysian workforce.

“Malaysian MSMEs need to be improved through adopting as many digital aspects as possible in their businesses, using Intelligent Intelligence (AI) and  the Industrial Revolution 4.0 (IR4.0),” he told Business Times.

Aimi added that the government must continue investing on a larger scale in producing skilled and semi-skilled workers through Technical and Vocational Education and Training (TVET).

This is crucial not only for attracting foreign investments and supporting diverse forms of investments but also for raising Malaysian workers’ income levels, paving the way for the nation to achieve high-income status.

“It will also create more scientists and engineers who will be the catalyst for a culture of creativity, especially in the field of research and development (R&D),” he added.

Additionally, he said the value of the ringgit needs to be strengthened especially from being influenced by external macroeconomic factors.

“It needs to be strong, competitive and stable by lifting the country’s economy to a higher level. A stronger ringgit means the ability to absorb higher hikes in imports of food, which Malaysia currently exceeds RM70 billion annually,” Aimi said.

This would help mitigate the impact of rising inflation, particularly in mid-2025, when the government plans to implement targeted subsidies for RON95 petrol prices.

“Such a move will have a broader impact on the purchasing power of the people,” he said.

Source: NST

Robust performance amid global uncertainties

After underperforming against others, the technology sector is expected to attract investor interest in 2025 on improved outlook and more compelling valuations.

Vincent Lau, head of equity sales at Rakuten Trade said the sector is ripe for a recovery underpinned by a softer ringgit, the expansion of artificial intelligence (AI) usage worldwide and the building of more data centres in the country.

“That, together with government initiatives, will have a spillover effect on the tech sector for services and equipment which will aid a recovery in the stocks,” Lau said.

The stronger ringgit had hit earnings of many local tech companies in the third quarter and its softening against the US dollar would help many companies post improved export earnings.

He said he wasn’t particularly worried about a Trump presidency from Jan 20 onwards, believing the tech sector locally could be a net gainer from realignment of supply chains and the China+1 strategy.

China+1 is the strategy to avoid investing only in China and diversify business into other countries, or to channel investments into manufacturing in other promising developing economies such as India, Thailand, Turkey or Vietnam.

Phillip Capital Research said it foresees stronger earnings momentum in 2025 for the bulk of the local tech companies within the electronics manufacturing services (EMS) space, with sector earnings forecast to grow by 69.5% year-on-year as the semiconductor cycle turns.

The research house said it prefers industrial players in the EMS sector over consumer electronics, with the former better positioned to ride the AI boom and being less susceptible to any slowdown in the global economy.

“Investors are positioning for the next semiconductor cycle, with earnings delivery being the key catalyst for further share price reratings.

“The focus is expected to remain on the AI supply chain. We maintain an ‘overweight’ stance, favouring long-term secular trends in data centres, automotive and solar, with a preference for front-end exposures,” the research house said in a recent strategy report.

From a technical standpoint, a technical analyst with a local research house said the tech index appears to have found its bottom at about the 58-point level over September to late November and had started to trend up since early December.

The index hit a year high of 81 points in early June before a selloff of tech stocks globally in July spread to the local exchange, which was made worse by poor second and third quarter numbers by companies in the sector.

Stock wise, shrewd investors now appear to be betting on local companies that have an AI connection where bulk of capital expenditure by titans like Microsoft and Amazon is being spent.

Unsurprisingly, names like Frontken Corp Bhd and Nationgate Holdings Bhd have become sector favourites due to the AI and data centre-related themes, with Frontken for its services supplied to Taiwan Semiconductor Manufacturing Co Ltd, which is a leading AI chip maker, and Nationgate as a potential gainer from the new data centres for AI servers.

“The share prices of these companies are at or near historic highs again while the share price of outsourced semiconductor assembly and test service providers like Inari Amertron Bhd, Malaysian Pacific Industries Bhd, Unisem (M) Bhd, Globetronics Technology Bhd and KESM Industries Bhd have made very small gains as investors want to see an upturn in the conventional semiconductor replenishment cycle before committing to them,” said the analyst.

With some economists warning of a weaker global economy in 2025, the strength of the semiconductor upcycle is another factor to consider, he added.

Source: The Star

Tech sector to benefit from attractive valuation

Malaysia’s ambitious goal of achieving high-income status by 2028 will be contingent on the workforce migrating from its current low-skill status to skilled and high-skilled.

The World Bank defines a high-income nation as one with a gross national income (GNI) of US$14,005. Malaysia’s GNI, while competitive at US$11,997 in 2023, is not among top-tier countries.

A study conducted by Talent Corporation Malaysia Bhd (TalentCorp) highlighted that an alarming 620,000 jobs across 10 key sectors are expected to be impacted by artificial intelligence (AI), digital technology, and the green economy within the next three to five years.

To address the critical gaps in high-growth, high-value (HGHV) sectors caused by a lack of skilled talent, several initiatives have been introduced to ensure these sectors remain competitive and future-ready.

In the 2025 Budget, a record-breaking RM7.5 billion has been earmarked for Technical and Vocational Education and Training (TVET), supporting the National Industrial Master Plan (NIMP) 2030 and the New Semiconductor Strategy (NSS), which aim to drive economic growth, industrial development, and social progress.

SHIFTING GEARS 

Khazanah Research Institute senior research associate Dr Mohd Amirul Rafiq Abu Rahim said the focus on AI education, startup development, and attracting foreign investment is a comprehensive approach that not only prepares workers to confront the rapidly changing labour market, but also creates the necessary ecosystem for long-term growth, specifically in the digital economy.

“Targeting the urban poor, rural communities, and indigenous youth will equip our most vulnerable populations to thrive in an ever-evolving economy.

“Additionally, greater investments in the business ecosystem are driving innovation and resilience in key industries.

“Together, these initiatives mark a decisive step towards raising the floor for both individuals and businesses, ensuring sustainable and equitable progress for Malaysia,” he told Business Times.

However, Amirul noted that to create a more inclusive and effective skills development strategy, the budget should address key gaps such as regional disparities in access to training, the need for robust measures in identifying industry-specific upskilling, strengthening public-private partnerships, and improving soft skills development.

He said future-ready workforce can be shaped by targeting rural areas with mobile training centres, improving internet and digital connectivity, customising programmes to meet sector-specific needs, and incentivising private sector involvement through co-developed apprenticeship models.

“Additionally, fostering a forward-thinking of lifelong learning, integrating soft skills, and improving the tracking and transparency of training funds, allocated to key segment of training programmes which support the current and future industrial needs, will help ensure that workforce development is equitable, responsive to labour market demands, and inclusive of vulnerable groups like youth, women, older workers, and persons with disabilities,” he said.

Amirul said Malaysia can learn from other countries that already have their own strategies in skills development to align the workforce training with industry needs. 

For example, Germany emphasises integrated practical and theoretical training for long-term employability, while Singapore invests in lifelong learning with a focus on high-growth sectors, and Australia targets immediate workforce recovery and skills for employability in response to economic challenges. 

“These models collectively demonstrate the importance of tailored strategies, multi-stakeholder engagement, and adaptability in maximising the impact of skills development investments,” he added.

Institute for Democracy and Economic Affairs (IDEAS) Malaysia economist and assistant research manager Doris Liew said that while many initiatives for TVET are geared toward HGHV sectors, low-skilled workers remain underserved.

This is due to a lack of access to information about training opportunities or pathways to gain knowledge and acquire specialised skills, limiting their chances to join the high-value economy.

“To address this disparity, targeted programmes should be developed such as creating accessible training opportunities tailored to their educational background and job experience.

“This could provide clear pathways to bridge knowledge gaps and advance toward higher productivity roles, while establishing partnerships with employers to ensure that training aligns with real-world job requirements,” she added.

Liew said raising the minimum wage is helpful in improving income levels but it does little to address the core issue of productivity as the workforce must also be prepared for future shifts in industrial demand.

“Lifelong learning must be a central tenet to Malaysia’s workforce development strategy, with programmes that empower individuals to continuously reskill and upskill to remain competitive in a fast-changing global economy,” she said.

Universiti Malaysia (UM) Social Wellbeing Research Centre research fellow Dr Zulkiply Omar said the private sector needs to be more proactive working with TVET to support the initiatives, particularly in creating a win-win situation.

He also suggested that the private sector should be granted an incentive to train and upgrade their technologies.

“In our case, most students have to find an internship opportunity, but this should change. The private sector must be more proactive in recruiting talented students for internships and eventually absorbing them as full-time employees,” he added.

PRIVATE SECTOR’S GAMEPLAN

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the industry has undertaken some key initiatives, which include collaborating with skills development institutions like the Penang Skills Development Centre (PSDC), German-Malaysian Institute, Japan-Malaysia Technical Institute and polytechnics.

He said the partnership provides targeted training in semiconductor fields, such as advanced manufacturing and process technology; design and engineering skills; automation and Industry 4.0 integration; quality control and testing; data analytics and digital skills, among others.

He stated that the semiconductor players also actively engage in initiatives such as the National Dual Training System (NDTS), including apprenticeship and internship programmes to ensure workers gain both theoretical and on-the job skills.

Given the shift towards automation and digitalisation, along with the recognition of the need for inclusive growth to prevent displacement of low-skilled workers, Soh said companies are focusing on creating job opportunities for these workers through reskilling and cross-training initiatives to help them transition into higher-value roles.

“Additionally, on-the-job training provides them with continuous learning opportunities that help build their competencies in new fields and areas the company has started to adopt.

“Partnerships with universities and TVET institutions on micro-credentials and certification programmes are another option employers can pursue to enable their low-skilled workers progress and grow within the organization,” he added.

Soh stated that industries are increasing their efforts to collaborate with TVET and other higher institutions to be part of training process, aiming to enhance students’ employability and provide industries with skilled workers who possess relevant skills and industry exposure, allowing them to be quickly absorbed into the workforce through initiatives such as the Academy in Industry, as well as internship and apprenticeship programmes.

Source: NST

Getting the Malaysian workforce high-income ready

Prime Minister Datuk Seri Anwar Ibrahim highlighted that his official visits abroad, as well as the visits of world dignitaries to Malaysia this year, have significantly strengthened diplomatic ties, boosted investments, and enhanced the country’s global standing.

He said that Malaysia is now regarded as a respected strategic partner, gaining recognition from leaders of major powers for its active role in championing global issues, especially supporting justice for the Palestinian people and its advocacy for a more just and balanced world order.

“By 2025, Malaysia is poised to lead ASEAN into a new era that is more inclusive and sustainable,“ said Anwar.

“With the strong support of the international community, we enter the new year with full confidence to drive shared prosperity,” he said in a Facebook post today.

In the video uploaded with the post, the Prime Minister reflected on his official visits abroad in 2024, including destinations such as Singapore, Brunei, Indonesia, China, Australia, Russia, Germany, Qatar, Saudi Arabia, Uzbekistan, Japan, India, Peru and Brazil.

These visits generated a potential investment of RM115.2 billion (US$25.2 billion), with key investments from Germany (RM46 billion), South Korea (RM32.8 billion), Australia (RM24.5 billion), Japan (RM1.45 billion), and India (RM4.8 billion).

Furthermore, Malaysia welcomed 35 official visits and courtesy calls from foreign dignitaries, including representatives from Cambodia, Argentina, China, Kyrgyzstan, Egypt, and Bahrain.

Source: NST

2024: Malaysia makes strides on global stage – PM Anwar

Malaysia-china cooperation drives regional growth via Kuantan Port and ECRL

AS MALAYSIA and China celebrate 50 years of diplomatic relations this year, their partnership continues to yield tangible benefits, especially in infrastructure development.

At the heart of this cooperation is the Malaysia-china Kuantan Industrial Park (MCKIP), a strategic hub supported by the East Coast Rail Link (ECRL) and Kuantan Port.

Together, these initiatives are driving regional economic growth, fostering trade, and reinforcing Malaysia’s role in Southeast Asia’s trade network.

Towards regional prosperity

The East Coast Rail Link (ECRL), set to commence operations in 2027, will establish a vital land-sea bridge connecting Port Klang to Kuantan Port, traversing Selangor, Johor, Pahang and Kelantan.

Spanning 665km, this link is expected to reduce logistics times, lower transport costs, and boost efficiency for container and bulk cargo movements.

One of these developments is the 3,500-acre Malaysia-china Kuantan Industrial Park (MCKIP), developed in 2013 as a sister project to the China-malaysia Qinzhou Industrial Park (CMQIP) in China.

Both parks introduced a new model of international cooperation, known as the “Two Countries, Twin Parks” concept, as part of China’s Belt and Road Initiative (BRI) to promote cross-border production capacity cooperation.

This industrial partnership has facilitated trade flows between Malaysia and China, with goods moving seamlessly from MCKIP to Kuantan Port – located just 12 km away – and onward to Qinzhou Port.

The sea journey spans 1,104 nautical miles (2,045 km) and takes just four to five days.

With its proximity to the ECRL and Kuantan Port, MCKIP strengthens Malaysia’s position in global supply chains, enabling direct trade linkages with China, South-east Asia and beyond.

Port of call

Established in 1974 under the Kuantan Port Authority, Kuantan Port commenced operations in 1984 primarily serving the hinterland regions of Malaysia’s East Coast. Strategically located along the South China Sea, Kuantan Port lies along key maritime trade routes, enhancing its connectivity and accessibility within regional and global supply chains.

In 1998, the port was privatised, leading to the formation of Kuantan Port Consortium Sdn Bhd, with Road Builder Holdings Bhd, which eventually merged with IJM in 2008.

Since 2013, China’s Guangxi Beibu Gulf International Port Group has held a 40% stake, with IJM retaining the remaining 60%.

This partnership reflects the deepening economic cooperation between Malaysia and China, as well as strategic alignment with the BRI.

Expansion plans were initiated in 2013, leading to the development of two distinct areas: the original Kuantan Port 1, which has a maximum draught of 11.2 meters and accommodates vessels up to 55,000 deadweight tonnes (DWT), and the New Deep-water Terminal (NDWT).

The NDWT’S Phase 1A was completed and commenced in 2018, with a draught of 16.5m, enabling it to handle larger vessels with capacities of up to 180,000 DWT, while Phase 1B followed suit the following year.

Phase 2 is slated to complete by Dec 2039.

Today, Kuantan Port is recognised as Malaysia’s largest bulk cargo terminal operator, with bulk cargo accounting for 90% of its cargo mix.

Its proximity to oil and gas as well as petrochemical production facilities allows it to specialise in handling liquid cargo and hazardous materials, supporting Malaysia’s oil and gas sector.

Strategic location

MCKIP’S potential has attracted several international companies, which is projected to create about 20,000 long-term jobs and will increase Kuantan Port’s annual throughput capacity by over 15 million tonnes upon completion.

Alliance Steel is the park’s flagship investor, operating Malaysia’s largest steel production facility with an annual capacity of 3.5 million tonnes.

The company’s Rm5.6bil investment spans 710 acres, with plans for further expansion in MCKIP 1, where it has secured an additional 305 acres for further investment valued at Rm7bil.

Other key investors include Maxtrek Tyre Manufacturing, which has invested Rm1bil in a 174-acre facility, and Jianhui Paper, which aims to produce 2.4 million tonnes of paper pulp annually.

The industrial base also features IJM’S Industrial Concrete Products, which manufactures concrete spun piles and Camel Power Malaysia, a key producer and distributor of automotive batteries, further broadening the park’s economic footprint and capacity for industrial development.

In 2023, the Malaysia-china Kuantan International Logistics Park (MCKILP) was launched within MCKIP 3 as a 640-acre integrated logistics and mixeduse development.

Developed through a joint venture between China Harbour Engineering Company Ltd (CHEC), IJM and Guangxi Beibu Gulf International Port Group, MCKILP features light and medium industrial zones, logistics and warehousing facilities, as well as residential and commercial components, positioning it as a key industrial and logistics hub in the East Coast Economic Region (ECER).

These investments highlight MCKIP’S role as a beneficiary of the BRI’S industrial cooperation strategy, promoting sustainable development and reinforcing China’s commitment to co-developing production capacity with its trading partners.

Benefits of ECRL link

The ECRL, with two spur lines leading directly into Kuantan Port will potentially be a game changer for Malaysia’s logistics landscape.

This direct rail link will provide a fast, cost-efficient route for container cargo between the East and West coasts, strengthening Malaysia’s position as a trade and logistics hub.

By connecting Port Klang, MCKIP and Kuantan Port, the ECRL enables smoother trade flows, boosts cargo throughput, and attracts container liners, opening new trade routes to China and other key export markets.

To prepare for the ECRL’S arrival, Kuantan Port is expanding its container operations, investing in critical equipment and optimising scheduling processes to improve operational efficiency.

The port is also working with logistics partners to develop end-to-end solutions for cargo movement, including freight forwarding, warehousing and last-mile delivery.

These efforts will ensure that Malaysia’s East Coast becomes a vital link in global trade routes, particularly in China-asean trade.

This connectivity reinforces the BRI’S goal of improving regional and global logistics networks and catalysing new economic growth in the area.

Source: The Star

Boosting economics in the East Coast

With trade and economic relations between Malaysia and China set to further flourish in the coming year, the private sectors on both sides are preparing ahead of the anticipated boom.

With the number of Chinese companies eyeing Malaysia for investments on the rise, a legal framework agreement signed between two law firms from both sides will give things a boost.

The Beijing Celue law firm, reputed to be one of China’s largest legal outfits, inked the cooperation agreement with Malaysian legal firm Ang & Wong Advocates & Solicitors (AW-Legal) in Guangzhou recently.

The collaboration aims to bridge gaps in legal systems, streamline investment processes and offer end-to-end solutions for businesses navigating Malaysia’s regulatory landscape.

The signing marked the first time that Celue established a partnership with an overseas legal institution, serving as a key step in the firm’s expansion into international markets, particularly in countries and regions involved in the Belt and Road Initiative (BRI).

Present to witness the signing was the Acting Investment Consul of the Malaysian consulate-general in Guangzhou, Safwan Nizar Johari, who is also acting director of the Malaysia Investment Development Authority.

He said he expected the next two years to hit the peak in China-Malaysia trade relations, with the 50th anniversary of diplomatic relations between both countries in 2024 seeing significant achievements.

Safwan Nizar said the legal agreement would help facilitate Chinese investments into Malaysia and assist with strategic planning and policy advocacy.

Welcoming Chinese investors, he highlighted Malaysia’s position as a top choice for foreign investments.

Quoting the 2024 Milken Institute Global Opportunity Index, he said: “Malaysia ranks as the country with the best overall investment conditions among Asia’s emerging and developing nations.

“This recognition highlights our robust policies, strong fundamentals and investor-friendly environment.”

Safwan Nizar also emphasised the role of Investment Guarantee Agreements which Malaysia has signed with more than 60 countries.

“These agreements ensure that foreign investors are protected, fostering confidence and providing a secure platform for businesses to grow and thrive,” he added.

Representing the law firms concerned were Chen Zhen, director of the Celue Guangzhou Management Committee, and Alicia Wong, founding partner of AW-Legal.

Chen Zhen said the legal profession played an important role in providing legal safeguards for the BRI.

“This collaboration between the two law firms is a direct response to the initiative, aiming to provide high-quality legal services to the countries and regions involved,” he added in his remarks.

He said both law firms would continue to adhere to the “client first” service philosophy, focusing on providing tailored legal solutions.

“In the future, we look forward to deepening cooperation with AW-Legal in areas such as cross-border investment, international trade and intellectual property protection, and jointly enhance service quality to create greater value for our clients,” he added.

In her address, Wong said both firms would work closely together to help Chinese businesses wanting to expand to Malaysia, for mutual benefit and the advancement of business and legal cooperation between the two countries.

“This deal reflects our shared vision to create a seamless pathway for Chinese investors entering Malaysia.

“Malaysia offers unparalleled opportunities with its strategic location, diverse economy and investor-friendly ecosystem.

“By combining our expertise with Celue, we are not just providing legal solutions but fostering confidence, reducing complexities and creating a platform to empower businesses to thrive,” she added.

The event also received support from the China-Malaysia Friendship Association.

“This collaboration between AW-Legal and Celue represents more than a legal agreement – it signifies the deep trust and cooperation between Malaysia and China,” said a representative from the association.

Prominent business leaders and legal experts also attended the event.

Source: The Star

Malaysian and China law firms to bridge gaps in legal systems

Malaysia is doubling down on technology to drive economic growth and establish itself as a regional tech hub. Through strategic investments in digital infrastructure and forward-looking policies, the government aims to enhance digital capabilities and secure the nation’s position in the competitive global economy.

A key initiative is the RM50 million allocation in Budget 2025 to expand artificial intelligence (AI) education across research universities, underscoring the government’s commitment to fostering innovation. Industry experts highlight the importance of a coordinated, cross-sectoral approach to overcoming uncertainties and harnessing the full potential of advancements in AI, advanced computing and connected technologies.

Future readiness relies on improving current technologies while paving the way for emerging innovations such as autonomous vehicles and advanced computing, says Rosihan Zain, CEO of Futurise Sdn Bhd. This requires strategic planning to build an ecosystem equipped to harness these advancements, including developing infrastructure and implementing strong regulatory frameworks. Futurise, a subsidiary of MOF Inc-owned Cyberview Sdn Bhd, has been tasked with driving regulatory reform, deploying technological innovations, and fostering new ecosystems through the National Regulatory Sandbox.

“The country needs to elevate itself and be on par according to innovative practices that are prevalent in the world. If [the country] prepares for emerging technologies and has the right frameworks and established ecosystems to receive it, it’s akin to preparing the house before the residents move in,” says Rosihan.

Achieving this will need streamlined coordination among government agencies to ensure their efforts are distinct yet complementary, he says. There has to be a clear and ambitious vision to guide these agencies to establish a technological and innovation footprint.

More importantly, this vision must move beyond aspirations, grounded in a clear understanding of strengths and the challenges that need to be addressed, says Prashant Kumar, a leading AI, customer and brand expert, as well as an independent director on Astro’s board of directors. A well-crafted approach should focus on identifying and prioritising areas where there is a distinct competitive advantage.

“I would say a vision is easy but a smart vision is difficult. To truly [identify] the country’s strength, capabilities and unique characteristics [while] understanding the evolving global technology ecosystem and where the gaps are to be the best in class globally in certain clusters, takes a lot of strategic thinking. That is the crux of a great vision for the country,” he says.

Countries such as South Korea serve as inspiration, having successfully exported their technology, innovation, and culture, says Rosihan. Embracing a similar mindset with a focus on a long-term vision is crucial for achieving success in the journey toward becoming a technology and innovation hub. “Before leading to the grand vision for innovation, we need to understand why we’re doing it and what we are trying to achieve.”

Building on existing strengths

Malaysia’s unique advantages position it to become a key player in the global technology landscape, says Prashant. The focus should be on areas where it can lead, rather than spreading resources across multiple emerging technologies.

“I think being precision-focused on our competitive advantages is the [priority] … We are lucky because we already have a chip industry with deep strengths in consumer electronics and semiconductors. If you look at the biggest beneficiaries of the AI wave, they are the [countries that have] chip and cloud [industries]. We have a competitive advantage in both,” says Prashant.

“It is not the strongest or most intelligent of the species who survive; it’s the one that is most adaptable to change. Those who adapt will be winners; those who don’t will be losers. This applies to countries, individuals and companies.”

With strengths in oil and gas, biotechnology and semiconductors, how can Malaysia leverage these advantages?

“To be a global leader, we need to find areas where we can be a disruptor or a market leader. We have very established industries in terms of palm oil, oil and gas, semiconductors and other commodities. All these [industries] are actually ripe for advancement and innovations that can be offered, not just within our country, but throughout the region and abroad,” says Norman Matthieu Vanhaecke, group CEO of Cradle Fund Sdn Bhd.

“We have to [move] with the pack or even be ahead of the pack. [When] I hear of developments of new tech areas, I think Malaysia can be really early to the scene, or even lead these kinds of things. [For example], there has been a lot of talk about setting up a space launching platform. Imagine if [we] can start developing a space tech industry.”

Malaysia is already leveraging its abundant resources to establish itself as a major data centre hub. In fact, RM99 billion in data centre investments have been announced in the last two years, with another RM147 billion in the pipeline, according to data from Malaysia Digital Economy Corporation.

The government has also launched the National Semiconductor Strategy, which aims to position the country as a global leader in semiconductor research and development (R&D) and manufacturing. The three-phase plan targets RM500 billion in investments, the development of 10 leading local semiconductor companies and the cultivation of 60,000 skilled engineers by 2030.

As global competition in the semiconductor industry continues to intensify, the challenge is to go beyond maintaining relevance and becoming a leader in the space, says Jaffri Ibrahim, CEO of Collaborative Research in Engineering, Science and Technology (CREST). This means the country needs to develop an environment that allows it to effectively replicate global innovations while enhancing existing technologies and pioneering novel products and solutions.

“The question for Malaysia is, how do we keep ourselves relevant and at the forefront of the semiconductor space. When you master two fronts, which is semiconductors and software, the world is [our] oyster,” he adds.

Essentially, the electrical & electronics (E&E) industry needs to move up the value chain, shifting from outsourced semiconductor assembly and testing to higher-value activities like integrated circuit design.

Nevertheless, the country’s strong presence in semiconductors positions it well to ride the AI wave, notes Prashant.

Going beyond comfort zone

Malaysia, traditionally a consumer of external technologies, must pivot toward developing home-grown innovations, asserts Jaffri. Building intellectual property (IP) and investing in R&D should be central to this shift. Government support is essential to provide local companies with the tools and infrastructure needed to compete on a global scale.

“In the past, we [didn’t] own our own IPs or our own technologies; we were more subservient to other people’s IPs and technologies. We’re a consumer society. We are basically waiting for someone to create something before we make it in manufacturing and then utilise it. R&D allows us to be able to have control over creating our own products and services. In my view, that will be the name of the game for any society to progress to the next stage,” he says.

Creating original technologies and building on existing strengths in industries such as semiconductors and biotechnology will drive economic growth and create job opportunities, adds Prashant.

But our collective aversion to risk across sectors is a significant roadblock, says Rosihan. Currently, the country tends to focus on adopting and consuming foreign technologies rather than creating its own. A shift in mindset needs to happen to develop technologies that can go on to make an impact globally.

“When we think about innovation and technology, [we have to understand that it comes with] challenges and [part of the process] is planning for it but [knowing that] sometimes even the best plans fail. If there is a willingness to continue and not retreat, something will happen in a big way,” adds Rosihan.

Developing and commercialising new technologies take time, he acknowledges. While foundational technologies may not be developed immediately, an ecosystem must be in place to adapt to and capitalise on emerging innovations.

Strategic acquisitions of promising foreign technologies can bridge this gap, providing access to cutting-edge solutions and expertise for effective implementation. These proven systems offer a foundation to build on.

To stay competitive, gaps in acquired technologies must be identified and addressed. Investments in commercialisation infrastructure, access to funding and partnerships among industry, academia and the government are essential to drive long-term innovation.

“When you acquire technology that’s already out there, you’re also acquiring the skill sets, talent, company, networking and market share. You’re actually shortcutting the process. But, there must be a follow-up to quickly capitalise on that acquired knowledge before it becomes outdated,” says Rosihan.

Public-private partnerships are also key to driving innovation, says Jaffri. These partnerships can accelerate the development and commercialisation of technologies by jointly funding R&D initiatives while sharing the risks.

“When we attract new investments, not only do we want them to come in and set up in Malaysia, but we also want them to come in and open up the technologies to Malaysian companies and universities,” he adds.

For this to happen, companies should collaborate with local businesses and academic institutions to foster technology and knowledge transfer, benefiting both foreign investors and local stakeholders. These partnerships will enhance domestic capabilities, supporting industries while positioning the country as a hub for innovation and advanced technology.

Emulating India’s success with global capability centres (GCCs) could be another strategy, says Prashant. GCCs, offshore units of multinational corporations, can evolve from outsourcing hubs into innovation centres, driving original designs and breakthroughs in areas such as semiconductors and AI. Leveraging global talent and technological advancements, GCCs develop scalable solutions for global markets.

Apart from that, encouraging and incentivising local companies to participate in large-scale national projects is essential, says John Lim Ji Xiong, group chief digital officer at Gamuda Bhd. This approach enables corporations to invest in R&D and generate greater value.

National-scale projects, which are supported by local talent and companies, provide a platform to demonstrate Malaysia’s capabilities to the world. For example, the autonomous tunnel boring machine (A-TBM) is a Malaysian engineered innovation that is now exported worldwide.

In 2019, Gamuda introduced the world’s first A-TBM, powered by proprietary AI algorithms. This innovation enables precise navigation through geological formations with minimal human input, and was first deployed for the MRT Putrajaya Line.

“The government and national-­scale projects create a catalyst for local participation and skills building in partnership with global tech giants. Together with the private sector, Malaysia can ride the growth of the AI wave, underpinned by long term opportunities producing a strong local talent pool. Bold moves in building a strong digital ecosystem through adoption of secure AI and cloud [technology] will propel the nation forward in our pursuit of becoming a high income nation,” says Lim.

Meanwhile, universities require support in terms of funding for research, structured partnerships with industries and talent development programmes, says Erma Rahayu, head of the Department of AI at the University of Malaya. This is because universities are pivotal to producing industry-ready talent and conducting research.

For instance, the department is collaborating with Alto AI and Zhipu AI to develop a Malay large language model. The department also aims to advance healthcare with AI-driven solutions.

“We need to have greater collaboration between academia, industry and government, which is critical in terms of aligning our research with real-world challenges and to ensure innovation is impactful and scalable. We need the government to support us by increasing investment in AI labs, advanced computational tools and funding in multidisciplinary projects. We also need to have more structured partnerships with industries to ensure our research addresses real-world needs,” she says.

Ultimately, adoption is crucial for technology to drive innovation, says Afnizanfaizal Abdullah, head of innovation commercialisation at Malaysian Research Accelerator for Technology & Innovation (MRANTI). It creates a feedback loop where data, experience and refinement enhance tools and methods, which is particularly evident in AI and data analytics, he adds.

“While technology adoption promises immense benefits, businesses here face several key challenges, [which are] often rooted in cost, infrastructure and a shortage of digital skills. One of the most significant barriers is the financial investments required,” says Afnizanfaizal.

Organisations that adopt these technologies early and strategically integrate them find themselves with competitive advantages, as they can operate more efficiently, capture more insights and pivot faster in response to market demands, he adds. Yet, many small and medium enterprises (SMEs) lack the resources and technical knowledge to adopt technologies.

“Initiatives like the Domestic Investment Coordination Platform (DICP), which connects SMEs to essential funding and resources, and collaborations with MRANTI, which offers start-ups access to innovation sandboxes and mentorship, are central to this mission. These programmes are turning big ideas into tangible realities, positioning Malaysia as a global hub for technological excellence,” says Malaysian Investment Development Authority CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid.

There is also a need to support early-stage start-ups to ensure long-term value creation, says Victor Chua, managing partner at Vynn Capital, a Southeast Asia-focused early-stage venture capital firm. Early-stage start-ups are crucial for Malaysia’s digital future as they provide a foundation for nurturing the next generation of entrepreneurs, fostering innovation and establishing a digital ecosystem.

Start-ups that differentiate themselves by identifying and addressing real-world challenges are more likely to be successful. However, they require funding to develop their products, hire talents and scale operations. Gaining market validation is also crucial.

Toward this end, MRANTI aims to accelerate the growth of start-ups through programmes and initiatives such as the National Technology and Innovation Sandbox, Global Market Fit Programme and the AI Sandbox Pilot Programme.

Talent: The beating heart for innovation

The country must begin to adopt a culture that supports local innovations by encouraging risk-taking and embracing failure as a part of the process, says Jaffri. There needs to be a cultural shift to giving greater recognition to inventors and innovators.

To do this, talent development must be a top priority, says Matt Van Leeuwen, chief innovation officer of Sunway Group. Additionally, the workforce must be empowered with digital skills through initiatives like coding academies and industry-focused training programmes.

This is why Sunway iLabs has committed to fostering a strong foundation in digital skills and critical competencies such as data literacy. The innovation arm of Sunway Group also focuses on developing soft skills such as problem solving and leadership.

An example of Sunway iLab’s initiatives to nurture digital talent is the 42 Malaysia coding school, which was established through a collaboration between Sunway Education Group, Khazanah’s Dana Impak, MDEC and the 42 network of coding schools.

“This tuition-free, peer-to-peer coding school offers a unique learning experience, focusing on project-based learning with no traditional teachers or classes. By providing students with the flexibility to learn at their own pace, 42 Malaysia [coding school] encourages them to develop critical thinking, resilience and the ability to adapt skills that are vital for thriving in an AI-driven world. This school is part of our broader effort to close the digital skills gap in Malaysia and prepare future innovators for the demands of the Fourth Industrial Revolution,” says Van Leeuwen.

Gamuda is future-proofing the workforce through initiatives like the Gamuda AI Academy, which trains 50 students per batch in full-stack AI. Open to individuals aged 21 to 30 with Python and JavaScript proficiency, the programme focuses on back-end and front-end development. Additionally, Gamuda’s Data Hero Programme equips employees across disciplines with skills in digitalisation and data management.

“The Gamuda AI Academy was created as a way to solve problems for ourselves, but [we decided] to do it for the country as well. [This is] in partnership with Google Cloud. The Gamuda AI Academy is open to all, and Gamuda pays all the fees. [It’s a way to make sure that we] as a corporation [are doing our part in building] engineering talent for the country,” says Lim.

Moving forward, it is essential to invest in digital infrastructure to bridge the connectivity gap between urban and rural areas to ensure equitable access to technology, says Van Leeuwen. This is because a well-connected population can unlock broader participation in digital transformation efforts.

“While Malaysia has made significant strides in improving connectivity, mainly through initiatives like the National Digital Network Plan, there are still gaps in rural and underserved areas. Limited internet access restricts the adoption of digital solutions in these regions, impacting businesses’ growth potential. Furthermore, adopting advanced technologies such as AI or IoT (Internet of Things) requires robust infrastructure, which smaller enterprises may lack,” says Afnizanfaizal.

Source: The Edge Malaysia

Building tomorrow, today

The Sipitang Oil and Gas Industrial Park (SOGIP), which has secured investments totalling about RM29.87 billion, is expected to begin operations in 2026 and 2027, said Chief Minister Datuk Seri Hajiji Noor.

He said the investments include those from Esteel for a green steel plant with a phased investment value of RM20 billion, and from Petroliam Nasional Bhd (Petronas) for the development of a floating liquefied natural gas (LNG) facility with an investment value of RM8.8 billion.

Other investments include RM1 billion from E-Concern Sdn Bhd for waste management, and RM70 million from Tex Evolosi Waste Management Sdn Bhd.

“All the companies I mentioned will start operations in 2026 and 2027. These investments will create job opportunities starting from the construction phase and during operations.

“Certainly, the residents of Sipitang and the surrounding areas will benefit in various economic sectors,” he said in his speech at the official launch of the Arts, Culture, Tourism, and Traditional Food Carnival in conjunction with the Sabah Kadayan Annual Food Festival 2024 in Sipitang today.

The text of his speech was read by State Science, Technology, and Innovation Minister Datuk Arifin Mohd Arif.

Hajiji said both foreign and domestic investors remain confident in the state administration, which has a clear direction, and their confidence is evident through investments totalling RM1.7 billion this year.

Meanwhile, he said the tourism industry in Sipitang needs to be strengthened to generate economic and employment benefits, given the district’s strategic location, close to neighbouring countries like Brunei and Kalimantan, besides Sarawak and Labuan.

“The government also consistently supports traditional festivals such as the Ethnic Kadayan Food Festival and wants it to continue regularly to foster unity,” he said.

Source: Bernama

High-impact investments in SOGIP expected to begin operations in 2026-2027 – Hajiji

The Netherlands, Hong Kong and Japan are the top three foreign investors in Melaka, said Chief Minister Datuk Seri Ab Rauf Yusoh.

He said the Netherlands had invested RM8.4 billion, creating 2,505 job opportunities, while Hong Kong invested RM1.7 billion (1,230 jobs), and Japan invested RM1.296 billion (7,359 jobs).

Ab Rauf also said that the electrical and electronics sector topped the investment list with a value of RM11.975 billion (generating 8,192 jobs), followed by non-metallic mineral projects amounting to RM1.840 billion (1,276 jobs), and machinery and equipment investments totalling RM1.671 billion (1,194 jobs).

“The Melaka government is committed to increasing investments in these sectors by exploring high-tech industrial development opportunities based on the principles of ESG (environmental, social and governance).

“Key initiatives include the development of new industrial areas, such as the MCorp Hi-Tech Park and the German Technology Park, to cater to investors’ growing focus on sustainable technology and innovation,” he said during the state assembly at Seri Negeri on Friday.

He was responding to a question from Datuk Zaidi Attan (Barisan Nasional-Serkam) regarding the top countries investing in Melaka, the sectors with high investments, and the number of jobs created.

Ab Rauf further said that the state aims to attract investors seeking modern infrastructure, a skilled workforce and sustainable development strategies.

He said this aligns with the state government’s efforts to boost Melaka’s competitiveness as an investment destination, especially in manufacturing sectors such as electrical and electronics, semiconductors, machining and equipment.

In addition, he said the state government had taken proactive steps to ensure an adequate supply of skilled workers, including establishing the Melaka TVET Council on Oct 29, 2022, to strengthen collaboration between industries and technical and vocational education and training (TVET) institutions.

“This council aims to address workforce gaps, and ensure that skills taught in TVET institutions align with current and industrial needs,” he said.

Source: Bernama

Melaka getting strong investment from Netherlands, Hong Kong and Japan, says CM

Selangor remained the top destination for investments so far this year, as the state drew in RM66.8 billion in approved investments.

A total of 1,371 projects were approved comprising 253 manufacturing projects and 1,116 in the services sector, according to Invest Selangor. The projects are expected to create more than 50,000 potential job opportunities in the state, the state government promotion agency said.

The planned investments showcase Selangor’s industrial ecosystem vibrancy, cutting-edge technological capabilities, and its competitive strengths in the manufacturing and services sectors, said Ng Sze Han, the state’s executive councillor for investment, trade and mobility.

“The future looks bright for Selangor, and we hope the upwards momentum will continue and yield positive full-year results for 2024,” he added.

The total approved investments were an increase of 59% from RM42.1 billion recorded during the same January-September period in 2023, according to the Malaysian Investment Development Authority (Mida).

Most of the investments went into the services sector, followed by manufacturing and the primary sector of the economy, a segment that typically covers raw commodity production and extraction such as mining and plantation.

The services sector remained the key driver of Selangor’s investment performance, with major contributions from sub-sectors such as information and communications, real estate, support services, transport services, and distributive trade.

In the manufacturing sector, investments were driven by electrical and electronics, transport equipment, fabricated metal products, non-metallic mineral products, and machinery equipment. “This underscores the manufacturing sector’s resilience and continued growth,” Invest Selangor noted.

Domestic investments accounted for more than one-third of the total. The US was the top contributor of foreign investments in Selangor, pouring in RM4.8 billion, followed by Singapore, China, Japan and Germany.

Source: The Edge Malaysia

Selangor top destination for investments, draws in RM66.8b in January to September

The New Investment Incentive Framework, announced in Budget 2025, marks Malaysia’s bold move to position itself as a high-income nation by prioritising highvalue sectors, mainly in digitalisation and artificial intelligence (AI) within the digital economy.

INCEIF University economic analyst Prof Baharom Abdul Hamid said the new framework, slated to be implemented in the third quarter of next year (3Q 2025), is expected to create not only high-value products and services but at the same time provide high-value and high-paying employment opportunities.

“In the 1970s and 80s, we were offering cheap labour, cheap resources, tax exemption and so on, and what we got was investment in low-value industries, manufacturing and so on. So this time around, what the government aspires is foreign direct investment (FDI) in terms of technologically advanced areas, FDIs that can create high-value jobs and the platform for us to move towards a high-income country,” he told Bernama in an interview recently.

In October at the tabling of Budget 2025, Prime Minister Datuk Seri Anwar Ibrahim announced the New Investment Incentive Framework, which includes a strategic investment fund worth RM1 billion aimed at enhancing the capacity of local talent and encouraging high-value activities to be carried out in the country.

Baharom reckons the ASEAN 2025 Chairmanship and partnership with BRICS countries will accelerate the new investment incentive framework. It is also timely to capitalise on Malaysia’s dual leadership roles and open significant new avenues for digital and economic cooperation.

“Malaysia assuming the ASEAN Chairmanship places us in a stronger position, leveraging the right trading bloc to foster collaboration among ASEAN countries. This unity allows us to strengthen and uplift one another for mutual prosperity. For instance, Brazil, one of the anchor countries, brings expertise in digitalisation and artificial intelligence. Similarly, Russia is well known for its power in technology and digitalisation while China is a global leader in research and development,” he added.

Industry players leveraging AI

From an industry perspective, the new investment incentive framework would benefit companies that focus on AI and robotics, such as FSBM focuses on developing its information technology (IT) services segment, where it designs and develops customized IT solutions such as smart manufacturing, cybersecurity, intelligent application and digital solutions.

Managing director Pang Kiew Kun said the company would leverage the incentives, especially tax reduction, to focus on research and development (R&D) of its solutions.

“We are currently in R&D to develop a blockbuster product called Smart Supply Chain Management, which aims to serve all kinds of manufacturing. Since the new investment incentive framework introduced tax deduction for AI R&D and talent upskilling, we would leverage on that as it is in line with our company goal to elevate ourselves towards a more advanced technological solution provider,” he added.

Future-ready AI talent

In line with the government’s goal to accelerate AI, Universiti Teknologi Malaysia (UTM) has been given the mandate to establish the first AI learning centre, namely the AI Faculty with an initial allocation of RM20 million to strengthen exploration of the field. In October 2024, the university launched a Bachelor in Artificial Intelligence programme with 101 local students becoming the pioneering cohort.

According to its dean Prof Mohd Nazri Mahrin, collaboration between academia and industry is important to ensure graduates are equipped with the skills needed for high-value sectors under he new investment incentive framework. This enables students to tackle real-world AI challenges, ensuring they are well-equipped to meet the demands of high-value sectors upon graduation.

“We are preparing the students with a more advanced machine called the Graphical Processing Unit to expose them to the latest technology used by industry players to explore later on. The problem statement, the case study and real data from the industry will help students be exposed to the real problem and it will help to close the gap between academia and industry to get the maximum benefit from AI technology,” he said.

Mohd Nazri said it will take some time to see the outcome of preparing for future-ready AI talent in UTM, given the course just started in October and it will take three years for students to complete their study.

In the meantime, an expansion allocation of RM50 million from RM20 million under Budget 2025 for AI-related education has demonstrated a national commitment to an AI-driven future and job market.

Outlook

According to Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, the ministry plans to announce the new investment incentive framework as early as the first quarter of next year to ensure investors are informed of the new set of incentives as soon as possible.

Therefore, Baharom expects that the results and impact of the new framework will appear in the first quarter of 2026.

“The implementation is targeted towards the third quarter of next year so that we can plan everything and we can fully utilise the chairmanship of ASEAN as well as fully utilise BRICS. We have to properly align everything and there are certain things that we have to do such as some agreements with our partner trading countries to ensure that we would not be having the backlash or whatsoever from the new US government,” he said.

He added that the new incentive framework will support this shift, providing crucial incentives to attract investments while securing the prosperity of Malaysia’s economic plans.

Source: Bernama

New investment incentive framework: A leap towards high income economy