By Ong Kian Ming

The signing of the memorandum of understanding (MoU) on the Johor-Singapore Special Economic Zone (JS-SEZ) between Malaysia and Singapore on Jan 11, 2024, was well received on both sides of the border. The intention behind the JS-SEZ is to re-catalyse economic development in Johor under the leadership of prime ministers Datuk Seri Anwar Ibrahim and Lee Hsien Loong, with a new mandate and fresh ideas. The imminent installation of the Sultan of Johor as Malaysia’s new King also provided fresh impetus for a new cooperation narrative between the two countries, one where Johor plays a key role. However, a few key elements are needed to facilitate these good ideas and effective implementation, especially given the lack of details in the MoU.

First, the role of the Johor government must be explicitly outlined. It is not surprising that the first initiative listed in the press statement by Singapore’s Ministry of Trade and Industry (MTI) was the establishment of “a one-stop business/investment service centre in Johor to facilitate the application process for various approvals and licences necessary for Singapore businesses to set up in Johor”. This is clearly a pain point for Singapore businesses wanting to invest in Johor and being able to overcome it should be a priority for the JS-SEZ. Its resolution must involve the local and state governments in Johor.

Second, the private sector must play a meaningful role in designing and implementing the MoU. Many government-linked companies (GLCs) in Malaysia and Singapore are waiting to see how they can align with the direction set by the MoU. There are opportunities for these GLCs to cooperate with one another — similar to how Malaysia’s Khazanah Nasional has collaborated with Singapore’s Temasek on joint development projects in Iskandar Malaysia and Marina Bay, Singapore — and for these GLCs to cooperate with private partners from either side of the border. A well-designed MoU framework, with investments from a few “anchor” GLCs (including entities belonging to the Johor government) will provide guidance for such collaborations. If done well, this has the potential to further unleash human and financial capital in both countries.

Third, if not already in place, there needs to be a well-thought-out framework to discuss the finer details of the JS-SEZ at the working level involving the right agencies and ministries so that creative and potentially game-changing ideas can be discussed, filtered and brought up to the ministerial level.

The hard work of executing the plan outlined in the MoU lies with both countries’ civil services. For example, to facilitate passport-free travel between Johor and Singapore, both immigration authorities, together with their ministries of home affairs, must jointly discuss the parameters of this initiative. Other agencies and ministries can be brought to the discussion table depending on the mandate discussed between the two ministers in charge — Rafizi Ramli for Malaysia and Gan Kim Yong for Singapore. Once that mandate is clear, both ministers and their ministries must coordinate and avoid working in silos within their own government and between the national governments.

Fourth, there must be measurable key performance indicators (KPIs) for the projects and parties identified. For example, passport-free travel for citizens of both countries ideally would be implemented by end-2025, in time for the rollout of the Johor Bahru-Singapore Rapid Transit System (RTS) linking JB and Woodlands in 2026. Notionally, a pilot design could be tested in late 2024 or early 2025, perhaps in conjunction with the rollout of the Malaysian Digital ID with the relevant tech agencies (Ministry of Science, Technology and Innovation in Malaysia and Government Technology Agency in Singapore) working in close collaboration. Another example: timelines for the joint development of smart and green industrial parks with state-of-the-art data centres and deployment of artificial intelligence (AI) capabilities in autonomous vehicle testing between Malaysian and Singapore GLCs can be spelled out by the relevant parties. A final example would be to allow for the easier deployment of fintech solutions safeguarded by financial sandboxes in both countries, approved by Bank Negara and the Securities Commission Malaysia, and the Monetary Authority of Singapore.

Last, the processes of discussion and implementation must be well defined. It would be a good signal to the market if regular, say quarterly, updates by both ministers on the MoU’s progress and key initiatives could be made. If anything, these updates can provide internal and external pressure for relevant stakeholders to take concrete steps.

It is interesting that Singapore MTI’s press release mentioned seven exploratory initiatives “apart from the agreement”, including a one-stop business/investment service centre in Johor, the adoption of digitised processes for cargo clearance at the land checkpoints and joint promotion events between Johor and Singapore to promote trade and investments into the JS-SEZ.

This is a clear sign that Singapore wants to push ahead with certain initiatives as part of “beefing up” the MoU so concrete collaborations can be undertaken to build up trust and momentum in bilateral cooperation. Malaysia should look at this as an opportunity to put concrete proposals on the table even as the finer details of the MoU are being ironed out.

The initial excitement over this phase of bilateral cooperation, illustrated by the popular “wefie” of smiling prime ministers Anwar and Lee wearing hard hats on the day the MoU was announced, is palpable. The weight of expectations shows that ministers Rafizi and Gan have their work cut out for them.

Ong Kian Ming was an associate senior fellow at ISEAS-Yusof Ishak Institute and director of the Philosophy, Politics and Economic (PPE) programme at Taylor’s University, Malaysia. He is a former deputy minister of international trade and industry. This commentary first appeared on ISEAS-Yusof Ishak Institute’s blog, Fulcrum.

Source: The Edge Markets

Making the Johor-Singapore Special Economic Zone work

Malaysia’s growth of 3.8% in 2023 is beatable this year, on the back of a better global environment, says HSBC.HSBC’s South-East Asia and India, global private banking and wealth chief investment officer James Cheo said he is positive that the 4.5% economic growth is achievable with stabilisation of inflation and a stronger anticipated consumer consumption.

“Consumption has always been a pillar of growth for Malaysia and with inflation becoming more stable, it will put more money in our hands to spend, which will drive the economy,” he said during a media briefing at HSBC’s Wealth and Investment Outlook for the first half of 2024, yesterday.

According to Cheo, tourism will also see a push, particularly from arrivals from China, although it will not be the same as pre-pandemic levels.

Compared to the rest of the Asean region, he said Malaysia is garnering the lion’s share of tourist arrivals and this will continue to boost the economy.

He added that the green shoots of recovery from the electronic cycle is another positive factor for the economy.

“Malaysia’s strong semiconductor production and commodities market will give investors a good reason to invest into the country. From a foreign direct investment perspective, the chain orientation works well for the country because the Asean economy is linked together and offers plenty of opportunities,” he said.

However, Cheo said in terms of Malaysia’s risk assets, there are some headwinds on the horizon due to the interest rate differential.

“The US federal fund rate is at 5.25% while Malaysia’s overnight policy rate is at 3%, so there will definitely be a dollar strength that we’re up against. This is why I’m a little selective because naturally we find that capital will gravitate towards the United States because of this,” he said.

On investment themes, the bank identified four key drivers that will highlight the growth and income opportunities in the region for 2024. Cheo said the first was Asia’s supply chain being reshaped, as North Asian industry leaders have cleverly diversified their supply chains to go beyond China.

He said the second theme will be how India is a burgeoning economy and one to watch closely because of its demographic and potential.

“India delivered stronger-than-expected growth in manufacturing and services last year, with strong foreign direct investment inflows and booming exports. About 40% of the world’s global capability centres are in India, offering a boost to its economy and job market,” he said.

He said Indonesia has also offered solid growth and is one of the more favourable investment stories in Asia, supported by its large, young and growing population.

The third theme is on the rising wealth and middle-class consumers in Asia; while the fourth theme is on capturing peaking Asian yields.

Source: The Star

HSBC: 2024 to be a year of recovery for Malaysia

Melaka attracted RM4.77 billion in approved investments in the third quarter of 2023, said Chief Minister Datuk Seri Ab Rauf Yusoh.

Citing the figure by the Malaysian Investment Development Authority (MIDA), the chief minister said he believes Melaka could reach the RM5 billion investment target set for every year.

“We have worked hard to make Melaka an investment-friendly state. We hope more investors will invest here this year,” he said in his speech during the opening ceremony for Audemars Microtec (Malaysia) Sdn Bhd’s production facility in Angkasa Nuri Industrial Park in Durian Tunggal here today.

Also present were Audemars Microtec (Malaysia) Sdn Bhd chief executive officer Mirko Audemars, Science, Technology, Innovation and Communication State Exco Datuk Fairul Nizam Roslan and MIDA Deputy Chief Executive Officer S. Sivasuriyamoorthy.

The chief minister noted that there are 60 semiconductor factories in Melaka, reflecting Melaka’s image as a popular choice for electrical and electronics investments in the region.

“The industrial and manufacturing sectors are the backbone of Melaka’s economic development. In 2022 they contributed 37.2 per cent to the state’s gross domestic product (GDP). Currently, there are more than 185 thousand workers in Melaka’s industrial sector,” he said.

Commenting on Audemars Microtec’s presence in Melaka, Ab Rauf said the Swiss company invested RM50 million to set up its operations in the state, specifically in supplying precision micro-components to many of the world’s leading medical device manufacturers.

“The micro-components production in Melaka is inclusive of those critical key components that enable the functionality of the smallest and most sophisticated implantable, interventional and wearable medical devices.

“Audemars’ production site in Melaka covers a total area of 0.33 hectares and will focus on the manufacture of micro-coils and micro-magnets.

“I am very glad to hear that Audemars Malaysia will, at its full capacity, provide 200 jobs for the people of Melaka,” he added.

Source: Bernama

Melaka draws RM4.77 bln in approved investments in third quarter of 2023

Malaysia aims to become a key destination for high-end manufacturing and services, with electrical and electronics, aerospace, medical devices and pharmaceutical, and chemicals among the key focus for sector development, said Deputy Investment and International Trade Minister Liew Chin Tong.

He said that Malaysia’s initial economic take-off before 1997 positioned the country as a high-end manufacturing nation in Asia, and there is a renewed focus on regaining that status, possibly this year or in the coming years.

“Our factories are not only for producing ordinary products but also for high-end manufacturing, including semiconductors and other fields. And our economy is not only for regular services but for high-end services such as regional headquarters, legal services, environmental services, or engineering services,” he told reporters at the 7th China International Import Expo Malaysia (CIIE) promotion event yesterday.

He said it is Malaysia’s aspiration that the country is recognised and considered by companies worldwide, including companies from China, that the nation is unique and can produce services and manufacturing activities that are considered high-end.

“While China was the world’s factory, Malaysia was overlooked. But now, due to the somewhat uncomfortable relationship between China and the United States, Chinese and Western companies are seeking or forming second supply chain alternatives apart from China. Malaysia can take advantage of this opportunity and become a destination for Foreign Direct Investment and Domestic Direct Investment,” he said.

In his speech, Liew said that in the context of high-end manufacturing and services, there is a call for greater integration between government and private entities.

“Our responsibility is to improve Malaysia’s regulations and propose initiatives that create a positive impact on Malaysia-China businesses, focusing on high-end manufacturing and services within the policy and legal frameworks.

“Economic alignment and collaboration between businesses are very much emphasised, and events like CIIE provide a platform for Malaysian entrepreneurs to engage with Chinese businesses, facilitating trade relations and benefiting both nations,” he said.

He added the key point is to encourage substantive cooperation, assist mutual understanding through exhibitions and expos, and foster an understanding of each other’s regulations and economic controls.

Liew said that this year, amid global political and economic uncertainties, there is a strong emphasis on kickstarting economic development.

“Prime Minister Datuk Seri Anwar Ibrahim consistently underscores the importance of economic progress and comprehensive development,” he added.

Source: The Sun

Liew: Malaysia wants to be key destination for high-end manufacturing, services

The government aims to make Malaysia a destination for high-end manufacturing and services to attract more foreign direct investments and domestic investments.

Deputy Investment, Trade and Industry Minister, Liew Chin Tong said it is important for investors to be aware that Malaysian factories can produce high-end products, including semiconductors.

It should also be highlighted that the country provides top-tier, high-end services such as legal, environmental and engineering, as well as services for regional headquarters, he said.

Speaking to reporters after an event to promote the 7th China International Import Expo (CIIE), he said Malaysian companies should participate in more international exhibitions as part of efforts to highlight Malaysian capabilities.

“Events like CIIE provide a platform for Malaysian entrepreneurs to engage with Chinese businesses, facilitating trade relations to the benefit of both nations,” said Liew.

He added that the key point is to encourage substantive cooperation, assist mutual understanding through exhibitions and expos, and foster an understanding of each other’s regulations and economic controls.

In his speech earlier, Liew also emphasised the need for greater integration between government and private entities in the context of high-end manufacturing and services.

“Our responsibility is to improve Malaysia’s regulations and propose initiatives that create a positive impact on Malaysia-China businesses, focusing on high-end manufacturing and services within the policy and legal frameworks,” he added.

The 7th CIIE will be held in Shanghai, China in November this year.

Source: Bernama

Government aims to make Malaysia high-end manufacturing, services destination

HSBC Malaysia anticipates the local electrical and electronics (E&E), domestic consumption and tourism sectors to drive the local economy’s gross domestic product (GDP) to grow to 4.5%, higher compared with 2023.

Global private banking and wealth (Southeast Asia and India) chief investment officer James Cheo (pic) reckoned that Malaysia’s GDP grew to around 3.8% last year and expects the growth momentum to continue this year.

He said the local economy is expected to remain healthy in 2024, underpinned by resilient consumer and investment spending. At the same time, he also said that the positive fillip for the economy will come from the nascent recovery of the global electronic cycle and the resumption of global tourism travel.

“The external environment looks a little bit better, there’s improvement in the global electronics cycle … the pick up in electronic cycles is still in early days. Nevertheless, I think that will play out in 2024, it will benefit Malaysia, (driving its) electronic exports.

“Domestic consumption is always quite strong in Malaysia, that’s always a pillar of growth, it will continue to be robust. With inflation starting to stabilise, hopefully it will put more money in the hands of consumers to spend more,” Cheo said during HSBC’s wealth and investment outlook briefing for the first half of 2004 yesterday.

He added that the Malaysian tourism sector would likely expand this year. In Asean, he reckoned that compared with other countries within the region, Malaysia is “capturing the lion’s share, in terms of tourists, especially from China, which is actually very positive”.

“While we might not see that recovery of Chinese tourists pre-pandemic, but it will still be an improvement compared to last year. Putting all these together, we expect Malaysia to grow by about 4.5% which is respectable and quite solid …. from that perspective, its going to be positive,” said Cheo.

Furthermore, HSBC expects Bank Negara Malaysia to keep its policy rate at 3% for the rest of the year.

“We forecast the ringgit to stay stable at RM4.55 against the US dollar by the end of 2024,” he said.

On supply chain reconfiguration, Cheo said geopolitical tensions, trade fragmentation and technology restrictions are accelerating global supply chain diversification across the region.

In order to mitigate geopolitical risks and alleviate the impact of trade tariffs, western multinational corporates have implemented the “China+1 strategy” by building new production facilities in India and Asean to supplement their supply chain in China, he said.

“The whole trend of supply chain reorientation works very well for Malaysia as global investors or global multinationals start to think about the entire Asean as a whole consumer market. Ultimately, the Asean economies are linked together to the Regional Comprehensive Economic Partnership.

“Malaysia has (various) strengths, such as its semiconductor production and commodities markets. So there is a fairly strong proposition, as investors consider investing in Malaysia. Overall, it should be a good year for the Malaysian economy,” Cheo said.

He said HSBC it sees promising secular growth opportunities in India and Asean, driven by structural tailwinds from strong foreign and domestic private investments, young demographics, technology boom and green transformation.

“India has consistently delivered stronger-than-expected growth in manufacturing and service activities throughout 2023, with strong foreign direct investment inflows and booming services exports powering employment, private consumption and productivity gains.

“Forty per cent of the world’s global capability centres are in India, offering a strong boost to the country’s service exports and the job market,” he added.

Cheo said Indonesia offers solid growth and is one of the more favourable investment stories in Asia, supported by its large, young and growing population with rapid urbanisation as well as robust private consumption as its key growth engine.

”Indonesia further benefits from upgrading of its manufacturing value chain. The country’s abundant reserves of green minerals and metals are vital inputs for the electrical vehicle and battery industries,” he added.

Source: The Sun

E&E, local consumption, tourism to lift M’sian GDP growth in 2024 to 4.5%: HSBC

Japanese foreign direct investment (FDI) has played a pivotal role in Malaysia’s economic success with 2,778 manufacturing projects worth a total of RM91.89 billion implemented as of June 2023.

Grant Thornton Malaysia PLT Specialist Japanese coordinating director Toshihiko Takagi said the positive impact for Malaysia includes job creation, technology transfer and infrastructure development.

“Japan needs to grow together with other countries as it is currently experiencing a low birthrate and an ageing population. Malaysia has a high GDP (gross domestic product) growth rate of 8.7% in 2022, making it a leading investment destination,” he told SunBiz in an exclusive interview.

Currently, he said, there are 1,602 Japanese companies in Malaysia, comprising 764 manufacturing firms, primarily specialising in electrical and electronic product manufacturing.

“Toyota cars established UMW Toyota Motor with UMW Holdings and others in 1982. In addition, Daihatsu Motor, a subsidiary of Toyota, operates Perodua. Perodua employs about 11,500 employees and 70,000 people in total at suppliers and authorised dealers.

“As a retail company, Malaysian people are also familiar with Aeon. It has over 17,000 employees and the Aeon group consists of many stores including 34 merchandise stores, and 28 Aeon Malls,” he said.

Takagi said the bilateral relationships forged have played an important role in supporting Malaysia, particularly in areas such as employment and the development of living infrastructure.

He said Malaysia is an attractive destination for Japanese investment due to among others its political stability, robust legal and regulatory frameworks, access to skilled labour, and market potential.

“As mentioned, Malaysia has a high GDP growth rate of 8.7% in 2022. The market is expected to grow as the middle-income group is increasing,” he added.

Additionally, Takagi said the level of education in Malaysia is high, and the quality of human resources is considered to be excellent, making it easier to attract talented people in technical fields.

“Malaysia has an advanced logistics environment. In particular, Kuala Lumpur, with its concentration of airports, ports and railways, is strongly positioned as a logistics hub in the Asia-Pacific region, making it a very attractive environment for manufacturing and logistics companies,” he added.

Notably, the Johor Singapore Special Economic Zone (JS-SEZ) announced recently will be attractive for foreign companies, Takagi said.

“Detailed information on this is not available, but it is hoped that the system will be attractive to foreign companies, including Japanese companies,” he added.

He mentioned specific industries that are particularly attractive to Japanese investors and how they align with the country’s development goals and comparative advantages.

“In Japan, AI and IoT are considered major investment opportunities. In Malaysia, industry4WRD has been announced and the environment is conducive to cooperation and growth with Japan.

“One example is Hitachi’s acquisition of a Malaysian company for AI and SaaS to expand our IoT business in 2020. Further companies are expected in the form of collaboration, JV and M&A,” said Takagi.

He said Malaysia offers incentives such as pioneer status, investment tax allowance and the upcoming Global Services Hub Tax perk (which offers companies that establish global service centres in Malaysia a reduced income tax rate for up to 10 years).

The Principal Hub (Global Services Hub tax incentive after 2024), he remarked, is likely to become even more attractive in the future as Asean is expected to grow.

Malaysian Investment Development Authority’s presence in Tokyo and Osaka also provides support for Japanese businesses, said Takagi.

Furthermore, he added, Malaysia addresses sustainable and responsible investment, including environmental considerations, social impact, and corporate governance practices which aligns with Japan.

“Disclosure of sustainability information became mandatory in Japan on 31 January 2023. Listed companies are required to disclose proactively, and sustainability has become an extremely important issue in terms of dealing with business partners and securing human resources,” Takagi said.

Source: The Sun

Japan FDI plays pivotal role in Malaysia’s economic success: Grant Thornton

Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg has called upon Sarawakians to actively enhance their skills so as to work together with the investors, both local and international.

According to him, Sarawak presents a plethora of opportunities for supply chain collaboration and the state’s diverse resources provide a fertile ground for mutually beneficial partnerships.

Therefore, he highlights the importance of technology transfer, aimed at ensuring that the local expertise would be bolstered through shared knowledge.

“As we extend a warm welcome to OCIM and other investors in Sarawak, it’s imperative for Sarawakians to exert diligent efforts.

“As the host country, we must enhance our skills, facilitating collaborative efforts with overseas guests investing in Sarawak, and perhaps, even delve into learning and appreciating their cultures.

“Tonight, we have the opportunity to observe the convergence of cultures between Koreans and Sarawakians. A meaningful cultural exchange is essential for broadening our understanding beyond borders and fostering teamwork as a unified team,” he said in his keynote address for the Malaysia Korea Charity Gala Night at Damai Lagoon Resort near here last Saturday.

Commending the joint organisers, Sarawak Economic Development Corporation (SEDC) through the Sarawak Cultural Village (SCV) and OCIM Sdn Bhd, Abang Johari acknowledged their efforts being meant for a noble cause.

“I understand all the proceeds will go to charity organisations, and I appreciate the collaboration to help the less-fortunate groups.

“That should be our approach — investment with a focus on good ROI (return of investment), but simultaneously playing a part to help the less-fortunate groups.

“Thank you, and I hope you’d make more money,” he added.

The event’s objective was to raise funds for Yayasan Ilmu Sarawak, a foundation dedicated to knowledge advancements, and the ‘Green Generation’ initiative for a sustainable future.

Additionally, it also meant to support Perkata Sarawak, an organisation focusing on enhancing the care and wellbeing of mentally and physically challenged children and their families.

Among the distinguished guests were Minister of Tourism, Creative Industry and Performing Arts Dato Sri Abdul Karim Rahman Hamzah and his deputy Datuk Sebastian Ting; Minister for Women, Childhood and Community Wellbeing Development Dato Sri Fatimah Abdullah; former deputy chief minister Tan Sri Datuk Patinggi Dr George Chan; SEDC chairman Tan Sri Datuk Amar Abdul Aziz Husain; OCIM Sdn Bhd chairman Lee Woohyun; and event coorganisers Puan Sri Datin Amar Nur Ashima Aziz and Dr Kim Sooyeon.

Source: Borneo Post

Enhance skills, capitalise on investments, Sarawakians urged

Malaysia’s southernmost state of Johor, particularly its capital city of Johor Bahru, has emerged as a burgeoning hub of economic activity and investment potential. As part of the Iskandar Malaysia economic corridor, Johor Bahru is strategically positioned to capitalise on its proximity to Singapore, Southeast Asia’s financial and trade powerhouse. This strategic location, coupled with Malaysia’s favourable business environment, has attracted a surge of investments in recent years, transforming Johor Bahru into a dynamic and promising investment destination.

UNVEILING THE POTENTIAL: A Glimpse into the Future

Johor Bahru’s investment potential is underpinned by its diverse and thriving economic sectors. The city is home to a burgeoning manufacturing industry, with multinational corporations such as LEGO, Dyson, and Hershey establishing significant operations. The logistics and warehousing sector is also experiencing rapid growth, driven by the increasing demand for supply chain optimisation and regional trade.

Johor Bahru’s development and growth trajectory is further fuelled by several ongoing and planned infrastructure projects. Such as the Johor-Singapore Rapid Transit System (RTS Link) whose completion in 2026 will significantly enhance connectivity between Johor Bahru and Singapore, facilitating cross-border trade, tourism, and investment.

THE SINGAPORE FACTOR: A Flourishing Tourism Sector and Spillover Effects

Singapore’s tourism industry is also a significant factor in Johor Bahru’s growth. As the city state becomes increasingly crowded and expensive, many tourists are opting to stay in Johor Bahru and visit Singapore for day trips. This trend is expected to continue, further boosting the tourism sector in Johor Bahru which in 2019, Johor Bahru recorded over 30 million tourist arrivals, generating over RM15 billion in revenue. Thus making tourism a key driver of growth.

Moreover, Johor Bahru’s strategic location, just across the causeway from Singapore, presents a significant advantage for investors. The city serves as a gateway to Singapore’s bustling economy, providing access to a vast pool of talent, a strong financial infrastructure, and a well-established business ecosystem. This proximity to Singapore, coupled with Malaysia’s lower costs of living and doing business, creates an attractive proposition for companies seeking to expand their operations in the region.

INVEST IN APARTHOTEL PROPERTIES: A Lucrative Opportunity

Aparthotel properties offer a compelling investment opportunity in Johor Bahru. These properties combine the amenities and services of a hotel with the longer-term stay convenience of an apartment, catering to a diverse range of guests, including business travellers, families, and long-term visitors.

Quayside JBCC, operated by Ascott Group’s Oakwood brand, is a prime example of an Aparthotel property in Johor Bahru. Located in the heart of the city’s historic quarter that is nestled in the vibrant waterfront district, Quayside JBCC offers luxurious accommodations, state-of-the-art amenities, and a range of personalised services. All housed within a mixed development that includes retail spaces, a four star international hotel and the Oakwood Aparthotel.

Investing in Aparthotel properties like Quayside JBCC offers investors several advantages:

Strong Demand

Aparthotels are well-positioned to cater to the growing demand for short-term and long-term accommodation in Johor Bahru, driven by the city’s expanding tourism and business sectors.

Diversified Income Stream

Aparthotels generate income from both short-term rentals and longer-term leases, providing investors with a diversified income stream.

Resilient Asset Class

Aparthotels offer a degree of resilience in fluctuating market conditions, as they cater to a wider range of guests covmpared to traditional hotels.

Professional Management

Reputable Aparthotel operators like Ascott Group provide professional management services, ensuring that properties are maintained to the highest standards and that guests receive exceptional service. Thus ensuring a steady and regular income stream.

Aparthotel properties like Quayside JBCC offers investors a lucrative opportunity to participate early in the city’s growth and reap the benefits of its capital growth arising not just from tourism and digital nomads but also from the state’s dynamic and growing manufacturing sector that is bringing an influx of state senior executives and expatriates to Johor.

Source: The Edge Malaysia

A Gateway to Investment Opportunities in Malaysia’s New Southern Nucleus

Malaysia is well-positioned to reap significant benefits from the opportunities arising from the global economic shift, said HSBC Bank Malaysia Bhd (HSBC Malaysia) at the recent HSBC Asian Business Forum.

In a statement on Friday, HSBC Malaysia said organisations must prepare for growth and expansion and step up future-proofing measures to boost competitiveness in 2024.

Its chief executive officer, Datuk Omar Siddiq, said the Asia continues to offer prospects for long-term growth driven by sustained foreign direct investment, a rapidly growing consumer base, and opportunities in the complex manufacturing and services industries.

He added that a good portion of the growth was powered by Asean, which is becoming increasingly significant in the face of several trends, such as the reorientation of supply chains, the rapid acceleration of digitisation, and the fight against the threat of climate change.

“And positioned in the epicentre of several of these trends is Malaysia, which continues to be a top 25 trading nation with substantial investment potential and has long established itself as a prime destination for companies seeking to grow regionally,”  he said.

Deputy Minister of Investment, Trade and Industry Liew Chin Tong officiated the bank’s annual flagship event.

Liew said three factors were critical to Malaysia’s economic growth, namely the nation’s strategic location, pushing its labour out of the middle-income trap and across the high-income threshold and thirdly, focusing on higher growth areas.

HSBC Global Research has recently raised its growth forecast for Malaysia to 4.1% from its previous estimate of 3.8% for 2023. However, it retained its 2024 forecast at 4.5%, accounting for the better outturn in the third quarter and a gradual uplift in the trade cycle.

The bank said that reviving private investment is essential to Malaysia’s continued growth.

“Foreign and domestic direct investment was required to boost exports, generate jobs and promote economic growth,” it said.

HSBC Malaysia said that achieving this would require businesses in the country to make significant investments for expansion, enhance connectivity to fortify ties with other trading partners and pursue more opportunities.

“Companies should consider investing in high-value-added technology, which may include artificial intelligence, big data analytics, and robotics. At the same time, it would also be crucial for companies to reinvent their workforce,” it added.

Source: Bernama

Malaysia well-positioned to reap significant benefits from global economic shift — HSBC Malaysia

Malaysia is a shining star with a strong economic performance and a unique set of challenges, according to the Japan External Trade Organisation (Jetro).

In Jetro’s survey, called the “Business Conditions of Japanese Companies Operating Overseas in Asia and Oceania” for the financial year 2023 (FY2023), Malaysia stood out among major ASEAN countries as the only nation experiencing a consistent increase in operating surplus.

“The forecast for FY2023 reveals an impressive 67.9 per cent operating surplus, marking a steady climb from 59.7 per cent in FY2021 and 63.0 per cent in FY2022.

“The improved percentage for FY2023 is 34.2 per cent, with expectations of further enhancement in 2024,” the survey said.

It also found that over half of Malaysian companies (50.2 per cent) are considering business expansion, surpassing the 50 per cent mark for the first time in five years.

Jetro said the respondents expressed interest not only in expanding sales but also in the production of high-value-added products and investing in research and development.

“Malaysia’s investment environment is lauded for its ease of communication, with 80 per cent of companies highlighting the absence of language barriers,” it said.

However, risks are centred around human resources, including escalating labour costs, high turnover rates, labour shortages, and recruitment challenges.

“More than 60 per cent of ASEAN countries, with Malaysia leading at 63.5 per cent, face a severe shortage of human resources, particularly professionals and factory workers.

“Malaysian companies are actively automating production lines, showcasing the nation’s top rank in automation efforts and interest in automation within ASEAN,” Jetro reported.

Meanwhile, Malaysia exhibited a growing commitment to environmental, social, and governance (ESG) practices, with 45.4 per cent of companies undertaking decarbonisation initiatives.

“Human rights issues are recognised as a management challenge by a staggering 85.7 per cent of companies, ranking Malaysia first among major ASEAN countries for the third consecutive year,” it stated.

Market development strategies are evolving, with a shift towards local companies for business-to-business (B2B) targets and the upper class for Business-toconsumer (B2C).

The challenges include the small market size, difficulties in government and industry connections, and designing effective marketing campaigns due to ethnic diversity.

The survey noted that Malaysia’s economic landscape showcases remarkable growth in operating profits and a positive inclination towards business expansion and ESG practices.

However, the nation grapples with intricate challenges in human resources and market development unique to its diverse environment.

Source: Bernama

Malaysia shines with strong economic performance, unique set of challenges – Jetro

Selangor’s strategic emphasis on artificial intelligence (AI), particularly through the implementation of its AI Nusantara programme, positions the state, and Malaysia as a whole, as an appealing destination for foreign investors. 

State executive councillor for investment, trade and mobility Ng Sze Han said the programme, which prepares students for the digital future through AI and machine learning education, is crucial in producing a skilled workforce capable of meeting current market demand. 

In return, he said this will attract more foreign direct investments (FDI) into the country. 

Ng said this is also why it is vital for the state to invest in AI technology, which stands as a cornerstone to economic development. 

“AI Nusantara serves to bolster the workforce and enhance expertise, focusing on key areas crucial for FDI,” he said in his speech at the Selangor Digital School’s (SDS) AI Nusantara graduation ceremony at DoubleTree by Hilton Shah Alam i-City, here, today. 

“Notably, it places a strong emphasis on cultivating skills relevant to smart cities and smart mobility, particularly in industries such as electric vehicles and batteries.  

“This strategic emphasis positions Malaysia as an enticing destination for foreign investors seeking to capitalise on advancements in these sectors. Undoubtedly, the existence of a skilled workforce emerges as a pivotal factor in the allure of FDI.” 

AI Nusantara is a comprehensive one-month training and placement initiative by SDS, combining theoretical knowledge with practical application, providing students with the tools to create and develop using AI technology.

It is designed to address the shortage of workforce in the field of AI, particularly in digital marketing and prompt engineering.

Ng said to date, SDS has established collaborations with 55 companies associated with the Internet Alliance — a not for profit association representing Malaysia’s major pool of internet service and ‘middleware’ infrastructure providers — and 50 companies within the Selangor Information Technology and Digital Economy Corporation cooperation network. 

“A total of 105 industry partners have expressed interest in welcoming students who have undergone training in AI,” he said, adding that these companies include Yinson Holdings Bhd, Lazada, Fusionex Group, EasyStore, Razer Merchant Services, and ClickAsia. 

“As we embrace this technological evolution, we concurrently unlock doors to fresh prospects for our local entrepreneurs, create a magnet for investment opportunities, and foster the influx of skilled talent in the realm of AI technology to the heart of Selangor.”

Source: Selangor Journal

Selangor’s focus on AI a draw for foreign investors, says exco

The Johor-Singapore Special Economic Zone (JSSEZ) will be the game changer for Malaysia in the long run, creating opportunities for increased cross-border labour activities and investment flows between the two economies.

Singapore, facing a shortage of labour, heavily relies on foreign workers and with ample savings and capital, Singapore is expected to channel investments into Johor, benefitting both nations in the long term.

Asean+3 Macroeconomic Research Office (AMRO) chief economist Hoe Ee Khor said Singapore is a labour-constrained economy and depends very much on foreign workers.

“While Singapore has a lot of savings and capital, Malaysia will benefit from investment flowing from Singapore into Johor. These will be a long-term boost for both economies,” he told a virtual media briefing during AMRO’s January quarterly update of the Asean+3 Regional Economic Outlook.

Malaysia and Singapore signed a Memorandum of Understanding on January 11, 2024 to work on a JSSEZ to strengthen economic connectivity between Johor and Singapore.

Maybank Investment Bank in its research note said that the JSSEZ will target sectors related to electronics, financial services, business-related services and healthcare.

Both countries will work towards a full-fledged agreement and provide an update at the 11th Malaysia-Singapore Leaders’ Retreat, probably in the second half of 2024, it added.

Elsewhere, Malaysia and Singapore will also work on several initiatives that build towards the JSSEZ.

Although the area which will be designated under JSSEZ remains unknown, Maybank IB suggests that it could be located at Sedenak and/or Iskandar Puteri areas.

There is even a possibility that the JSSEZ could involve the whole Iskandar Malaysia region that spans 4,749km2 covering Johor Bahru, Kulai, Iskandar Puteri, Pasir Gudang and part of Pontian.

This development is seen as a move towards leveling the playing field for all landowners in these regions.

Source: NST

AMRO: Johor-Singapore Economic Zone to be game changer for Malaysia in the long run