Malaysia to gain from China’s corporate plan


“Malaysia has an established infrastructure and a competitive edge in advanced semiconductor packaging and testing," Eastsprings Investments's Tsai said.

PETALING JAYA: Malaysia, together with its Asean neighbours, is set to continue benefiting from the “China Plus 1” corporate strategy of supply chain diversification going into 2024, underpinned by a number of regional-specific structural themes.

That is the view of John Tsai, head of growth equities at Eastsprings Investments (EI), who said Asean would be seeing increasing foreign direct investments as the region poses less geopolitical risks.

He added that the region is a strong source of low-cost labour driven by a young and growing population, as well as having a strong manufacturing base.

“Malaysia has an established infrastructure and a competitive edge in advanced semiconductor packaging and testing. Together with Indonesia, it is also blessed with key supply of commodities,” he said at the EI market outlook webinar yesterday.

On top of FDIs, he opined that domestic consumption would also be the primary tailwind of economic growth for Asean, driven by its fast growing population of middle income consumers.

However, Tsai noted that as Malaysia, Singapore and Thailand have the most export exposure in the region by virtue of their respective high trade to gross domestic product ratios, they may continue to feel the pinch of prolonged dampened demand from China.

Looking ahead globally, EI multi-asset portfolio solutions manager Nupur Gupta said the United States could enter into a mild recession over the next six to 12 months, as its services sector – which has been holding up the economy – begins to see a slowdown.

“We are not expecting a deep recession as the balance sheets of corporate America or its household sector look fairly stable and steady, and as such, the US economy should be able to absorb any slowdown,” she said.

The consensus view is that the Federal Reserve (Fed) is likely to cut its fund rates next year. However, she said it would be cautious in doing so by weighing the inflation and growth factors.

Wage growth would be a key point in the Fed consideration as a deceleration in the US wage increase would probably spur its decision to reduce interest rates, she added.

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Business News

Oil rises as investors weigh Red Sea attacks, US rate cut outlook
Manufacturing industry at 79.8% operating capacity in 4Q23 - DoSM
China boosts Asian shares as investors brace for Nvidia earnings
Singapore Airlines outlook warning casts a shadow over air show
Rise of fast-fashion Shein, Temu roils global air cargo industry
HSBC's US$3bil China writedown mars record annual profit
Sime Darby's 2Q net profit rises to RM2.29bil, declares 3c div/share
Profit-taking on Bursa on softer appetite for global equities
HSBC full-year profit jumps 78%, trailing estimate
More job opportunities in store for SunCon in FY24

Others Also Read