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Malaysia’s approved investments to hit RM185b this year

Malaysia’s approved investments to hit RM185b this year

20 May 2021

Malaysia’s approved investments could increase by 13% year-on-year to RM185 billion in 2021, driven by foreign direct investment (FDI), according to United Overseas Bank (M) Bhd (UOB Malaysia).

UOB Malaysia expects FDI to contribute almost 40% of the total projected approved investments this year, mainly from China, Europe and the US.

UOB Malaysia MD and wholesale banking country head Ng Wei Wei said it is encouraging that Malaysia continues to attract companies globally despite the impact of the Covid-19 pandemic on businesses and supply chains worldwide.

“We believe Malaysia’s diversified economic potential, strong fundamentals, accommodative policies and favourable demographics will continue to appeal to foreign companies looking to expand into the region,” she said in a statement yesterday.

The bank said China, Europe and the US are expected to remain among the top FDI sources. At the same time, capital is likely to be channelled mainly into the high-value-added sectors such as electrical and electronics (E&E), chemical, manufacturing and industrial.

In 2020, Malaysia recorded RM164 billion in total approved investments, including RM64.2 billion in FDIs.

China is the main source of FDI at RM18.1 billion or 28.2% of the total FDIs, followed by Singapore (RM10 billion), the Netherlands (RM7 billion) and the US (RM4.3 billion).

Ng said the bank successfully facilitated an increase of close to 20% in FDI inflows from China compared to a year ago and supported a steady flow of new investments from European companies, particularly from France, Germany and the UK, which grew close to 10% annually.

With the encouraging FDI trend, UOB Malaysia will collaborate with the Malaysian Investment Development Authority (Mida) to facilitate inbound investments from both China and Europe’s major companies of high-value-added sectors, including E&E, chemical, manufacturing and industrial.

Ng noted that a memorandum of understanding was signed between both parties on Jan 10 last year — and since then has been working closely with Mida to help companies from Greater China, Europe and within South-East Asia — to expand and invest in Malaysia and across the region.

“We believe the reconfiguration of supply chains into Asean due to geopolitical uncertainties, including US-China trade tensions, continue to be a catalyst for growth in key sectors such as industrial, consumer goods and telecommunications, media and technology.

“The growth expectation is also supported by the global 5G network rollout that will boost the E&E and manufacturing sectors and enhance the country’s digital infrastructure,” she said.

Additionally, Ng said there is a rising interest in renewable energy (RE)-related projects, such as solar power.

As the country makes the transition to RE and enhances its infrastructure with cleaner sources of energy, it stands to attract more investments from multinationals looking to expand their operations in a sustainable manner, Ng stated.

UOB’s FDI Advisory Unit has supported more than 500 foreign companies establishing or growing operations in the country since 2013.

Ng said the support enabled these companies to develop their market entry strategies and to navigate the complexities of doing business in a new country and providing them with access to UOB’s financial products and services.

Source: The Malaysian Reserve

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