JS-SEZ expected to spur growth in eight sectors

JS-SEZ expected to spur growth in eight sectors

13 Feb 2025

Eight stock sectors are emerging as key beneficiaries of the Johor-Singapore Special Economic Zone (JS-SEZ), which launched in early January, aiming to strengthen economic cooperation and build synergy to attract global investments.

TA Research, which prepared a report following a visit to the state with institutional clients, said the initiatives would help lift Johor’s economy, especially in addressing the many issues that have plagued Iskandar Malaysia, including connectivity between the nine flagship zones identified under the JS-SEZ and connectivity between Johor and Singapore, among others.

The JS-SEZ largely corresponds to the area of Iskandar Malaysia, which was launched in November 2006.


The research house has identified banking, construction, consumer, oil and gas, property, power and utilities, technology and telecommunications as the key stock beneficiaries of the JS-SEZ.

“Johor will benefit from the spillover effects of Singapore’s economy and investments,” it said, noting that the bilateral trade flow between Malaysia and Singapore underscored both countries’ interdependence.

While the two countries have cooperated to develop an economic zone in Johor since the launch of Iskandar Malaysia, TA Research said the state needs aggressive incentives, promotion, a talent pool and sound infrastructure to attract investments and achieve the state government’s gross domestic product (GDP) target of RM260bil by 2030, up from RM148.2bil in 2023.

According to the Malaysian Investment Development Authority, between 2006 and December 2023, Iskandar Malaysia received a total cumulative investment of RM413.1bil, surpassing the RM383bil target set for the end of 2025.

Out of this, RM291.4bil, or 70%, has been realised. It is expected to attract RM636bil in committed investments by 2030.


“The JS-SEZ does not come with any financial targets but initiatives outlined under this economic zone are expected to complement the goals set for Iskandar Malaysia,” it said.

The JS-SEZ aims to increase economic complexity, promote digital vibrancy and technology adoption and achieve net-zero aspirations.

The value of investments stemming from these initiatives is expected to correspond with the enhanced requirements and help achieve the goals set.

Under the JS-SEZ’s identified economic sectors (manufacturing, logistics, food security, tourism, energy, digital economy, green economy, financial services, business services, education and health), aerospace, electrical and electronics, chemical, medical devices and pharmaceuticals were identified at the launch as top priority industries.

TA Research said Johor plays a crucial role in Malaysia’s economic landscape with its diverse economic base including manufacturing, agriculture, tourism and services.

“The inclusion of financial services as a key sector within the JS-SEZ is particularly important, as it will help elevate Johor’s role in Malaysia’s broader economic landscape.

“By creating a business environment conducive to the growth of finance technology, digital banking and other financial services, the zone could become a major regional financial centre, complementing Singapore’s dominance in this area,” it said.

It pointed out that the JS-SEZ may even rival the Klang Valley, given that Johor’s economic growth by GDP outpaced the national economy in 2023.

“We anticipate that this growth target will be revised upward in the 13th Malaysia Plan (due in July 2025), as Johor Mentri Besar Datuk Onn Hafiz Ghazi remains optimistic about the state’s development trajectory,” it added.

Source: The Star