KUALA LUMPUR: The Johor-Singapore Special Economic Zone (JS-SEZ) can potentially propel Johor to become the southern growth engine for the economy, said RHB Investment Bank Bhd (RHB IB).
In a note today, the investment bank said new foreign direct investment (FDI) flows from across the region would fuel Johor-centric opportunities.
"We remain positive on the broader market with external volatility offset by domestic stability and bolstered by ample liquidity, steady corporate earnings and attractive valuations.
"We believe the JS-SEZ is a compelling proposition on its own - with Johor offering a lower operating cost environment, access to land, ample supply of skilled labour and adequate infrastructure to connectivity coupled with Singapore’s access to capital and technology,” it said.
RHB IB said the signing of the JS-SEZ agreement will uplift market confidence as the bilateral commitments represent an unprecedented level of progress and collaboration, and real estate in Iskandar Malaysia is expected to undergo a multi-year growth phase.
"The influx of FDIs, the opening of new offices by local and foreign financial institutions in Forest City, as well as the higher number of travellers from Singapore, should have a strong positive spillover effect on the real estate sector,” it noted.
Similarly, Maybank Investment Bank Bhd (Maybank IB) also anticipates the property sector will benefit positively as the signing of the JS-SEZ validates the sustained implementation of government initiatives.
"This is the next largest milestone after the launch of the National Energy Transition Roadmap (NETR) in 2023, which is progressing well, in our view,” it said.
Maybank IB also stated that the JS-SEZ agreement marks a new era of investment opportunities and the leadership and commitment of the two countries, which form the foundation pillars of the special economic zone.
Meanwhile, Kenanga Investment Bank Bhd
(Kenanga IB), in a note, said the first wave of investments could be from Singapore given its proximity to the JS-SEZ.
It said the JS-SEZ targets to welcome 100 projects in 10 years and has trained its sights on 50 projects in five years.
"At the Malaysian country level, manufacturing investments from Singapore, on average, have seen around 100 investments approved annually over the past six years.
"On average, each investment computed is about RM150 million, though this should not be reflective of the ones targeted within the JS-SEZ, which is of high value,” it added. - Bernama
