PETALING JAYA: Johor will become the primary engine of growth in the country, with the newly announced competitive package for the Forest City Special Financial Zone.
This was one of the key takeaways from Invest Malaysia Iskandar 2024 held on Sept 26, according to Maybank Investment Bank (Maybank IB) Research.
In a note, the research house also highlighted that the setting up of the Invest Malaysia Facilitation Centre Johor will ease the process of moving businesses into the Johor-Singapore Special Economic Zone (JS-SEZ).
“The attempt at setting up the JS-SEZ is unique due to the healthy bilateral relationship between Malaysia and Singapore who are both keen to make this collaboration work, as businesses around the world make plans for trade diversions and supply chain relocations due to the ongoing United States-China tensions.
“National policies are key to better catering for business needs, while local enterprises stand to benefit from the capital influx into the JS-SEZ.”
Invest Malaysia Iskandar 2024 saw participation from over 500 delegates, including foreign institutional investors.
Prime Minister Datuk Seri Anwar Ibrahim delivered the keynote address, while Johor Mentri Besar Datuk Onn Hafiz delivered a special address.
Leaders of four government-linked investment companies (GLICs) also shared their views and investment focus under the GEAR-uP initiative.
GEAR-uP aims to synergise efforts across GLICs to catalyse growth in key economic sectors and further drive their participation in nation-building.
The six GLICs are Khazanah Nasional Bhd, the Employees Provident Fund (EPF), Retirement Fund Inc (KWAP), Permodalan Nasional Bhd, Lembaga Tabung Haji and the Armed Forces Fund Board (LTAT).
The GLIC panelists at Invest Malaysia Iskandar 2024 were unanimously positive on Malaysia’s prospects, stated Maybank IB Research.
This was underpinned by the fact that the country has the right ingredients with regards to governance, infrastructure and policy blueprints to drive holistic national development.
The EPF said it will focus on healthcare under GEAR-uP given the ageing demographics of Malaysia.
It sees the healthcare segment as profitable with a high return on equity, and hence, attractive from an investment standpoint.
Khazanah plans to fund startups, mid-tier companies and those in the semiconductor industry.
It has already been into early stage investments for a while now.
Under GEAR-uP, KWAP has committed RM40bil into domestic investments over the next five years.
It has identified eight verticals and will focus on the verticals nurturing entrepreneurs and food security.
It intends to drive the investments alongside general partners, and KWAP has identified 12 big global partners. In general, it targets 7% long-term returns.
Meanwhile, LTAT seeks to focus on the pharmaceutical industry, specifically on the supply of vaccines and insulin.
It targets to ramp up the production of insulin to 30 million doses annually to meet the national insulin requirement.
“The EPF has been very positive since 2023 due to good policy rollouts; fiscal rationalisation being addressed (with the Public Finance and Fiscal Responsibility Act passed, and subsidy rationalisation underway); and technocrats incorporating market-based principles into policy implementation.
“Khazanah believes that the existing policy framework will ensure that investments are effectively targeted for sustainable growth, while KWAP believes that Malaysia does have the necessary talent (although there is a need to address the issue of talent moving overseas).
“LTAT thinks that the country has put in the right structural framework to move forward,” said Maybank IB Research.
