UOB Malaysia: Approved investments to rise to RM185b this year

Managing director and country head of wholesale banking, UOB Malaysia Ng Wei Wei said, “Amid the impact of the pandemic on business and supply chains worldwide, it is encouraging to see that Malaysia is still attracting companies from around the world as they expand into Southeast Asia."

KUALA LUMPUR: UOB Malaysia projects approved investments in Malaysia to increase by 13% to RM185bil in 2021, of which close to 40% will be from foreign direct investment (FDI).

In a statement on Wednesday, it said China, Europe and the US are expected to remain among the top sources of FDI, while capital is likely to be channelled mainly into the high-value-added sectors, including electrical and electronics (E&E), chemical, manufacturing and industrial.

“Despite the challenging economic environment in 2020 due to the Covid-19 pandemic, Malaysia recorded RM164bil in total approved investments, of which RM64.2bil were from FDI sources.

UOB Malaysia said China was Malaysia’s main source of FDI at RM18.10bil or 28.2%. Singapore accounted for RM10bil in FDI, the Netherlands RM7bil and the US RM4.3bil.

In 2020, UOB Malaysia facilitated an increase of close to 20% in FDI inflows from China, compared with the year before.

The bank also supported a steady flow of new investments from European companies, particularly from France, Germany and the UK which grew close to 10% annually.

Managing director and country head of wholesale banking, UOB Malaysia Ng Wei Wei said, “Amid the impact of the pandemic on business and supply chains worldwide, it is encouraging to see that Malaysia is still attracting companies from around the world as they expand into Southeast Asia.

“We believe that 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.”

UOB Malaysia is working with the Malaysian Investment Development Authority (MIDA) to facilitate inbound investments from both China and Europe’s major companies of high-value added sectors in the E&E, chemical, manufacturing and industrial sectors.

UOB Malaysia said following the signing of a MoU with MIDA on Jan 10 last year, the bank has been working closely with MIDA to help companies from Greater China, Europe and within Southeast Asia expand and invest in Malaysia and across the region.

As part of the collaboration, virtual roundtables were organised with business delegations from Germany and China on April 15 and 28 this year respectively.

At these sessions, participants gained insights into Malaysia’s latest economic developments, policies and potential investment opportunities post-pandemic.

“We believe that 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 roll out-that will boost the E&E, electronics manufacturing sectors and enhance the country’s digital infrastructure. In addition, with the Malaysian government’s push to drive the country’s environmental, social and governance agenda, we see a rise in interest for renewable energy-related projects, such as those in solar power.

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

Since 2013, UOB’s FDI advisory unit has supported more than 500 foreign companies establishing or growing their operations in Malaysia, as well as local companies venturing across Asean.

The support enabled these companies to develop their market entry strategies and to navigate the complexities of doing business in a new country, as well as provided them with access to UOB’s financial products and services.