ISKANDAR PUTERI: The possible move by global index provider MSCI to downgrade Indonesia’s stock market classification is not expected to have any significant impact on Johor, says state executive councillor Lee Ting Han.
The Johor investment, trade, consumer affairs and human resources committee chairman said the development mainly involved capital markets and was unlikely to directly affect investments in the state.
“For Malaysia, we do not think there will be any impact at the moment, at least as far as Johor is concerned.
“MSCI is mostly concerned with capital markets, which in Malaysia’s case involve Bursa Malaysia, as well as the capital and bond markets in Kuala Lumpur,” he told the press during the Falcon Data Centre completion ceremony and appreciation dinner on Oct 21.
He said this when asked whether Johor would be affected, either positively or negatively, if MSCI decided to downgrade Indonesia’s stock market classification.
Lee said, however, that Malaysia could potentially benefit from investors looking for alternative markets following the development.
“On a positive note, when funds withdraw from one market, they will naturally be looking at other markets.
“So, we hope that Malaysia, being a stable country, can benefit from this.
“Given what’s happening in the world now, Malaysia still offers neutrality.
“It is a place where the East and West can meet.
“We don’t take sides, neither China’s nor the United States’, and hopefully, we can position ourselves as a place for major funds to invest in,” he said.
Lee said he also hoped that investments coming into Johor would translate into tangible developments rather than merely capital inflows.
“In Johor’s case, we hope that they don’t just invest funds, but actually build something.
“We hope that they will not just pour money into the state, but use that money to successfully complete physical projects such as infrastructure or data centres,” he said.
MSCI, whose stock market indexes are widely followed by international investors, reportedly announced on Oct 15 that it was considering downgrading Indonesia from an “emerging market” to a “stand- alone market” in 2027.
It cited concerns about a lack of transparency in share ownership, suspicious trading activity and weaknesses in market oversight.
Meanwhile, on the event, Lee said the successful completion of the Falcon Data Centre marked another milestone in Johor’s digital infrastructure development.
“The project demonstrates strong execution capabilities and reinforces investors’ confidence in Johor’s investment environment and future growth potential.
“We hope the Falcon Data Centre will spur the growth of related industries, create more opportunities for local businesses to participate in the supply chain, and promote high-skilled employment, talent development and technology transfer,” he said.
