Malaysia eyes RM200bil in investments this year

Malaysia’s investment performance is expected to remain stable this year, with little growth, based on the Government’s projection of attracting RM200bil in investments for 2018.

This compared with the total approved investments of RM197.1bil registered in 2017.

According to the Malaysian Investment Development Authority (Mida), domestic direct investments (DDI) are expected to once again lead investment growth in 2018, with the segment accounting for at least 60% of the total approved investments, while foreign direct investments (FDI) will account for the remainder.

“It is our goal to have a good balance of DDI and FDI,” Mida CEO Datuk Azman Mahmud said.

Speaking at a press conference here yesterday, Azman said already in the pipeline for approval were investments worth about RM80bil for 2018.

Meanwhile, International Trade and Industry Minister Datuk Seri Mustapa Mohamed announced the Government’s aim to secure over 12 companies to establish their principal hub in Malaysia this year. This compared with nine principal hub projects secured in 2017.

According to Mustapa, Malaysia remained a favourable investment destination, thanks to the country’s economic strengths.

“We are confident that Malaysia will continue to attract both domestic and foreign direct investments because our economic fundamentals are strong; we have a stable and supportive business environment, with a talented workforce; our location is strategic and we have an effective Government that has embraced creativity and innovation,” Mustapa said during his presentation of Malaysia’s 2017 investment performance.

Mustapa pointed out that the investment outlook for the country this year would also be backed by the expected rebound in global FDI flow, which would likely reach US$1.8 trillion in 2018.

“Stronger economic growth in major economies, the gradual recovery in commodity prices and improved profits, as well as improving prospects in various sectors could boost business confidence and thus multinational companies’ appetite to invest,” he explained.

In 2017, Malaysia saw a drop of 7.4% in approved investments on lower inflow into the services sector.

Data from Mida showed approved investments in the manufacturing, services and primary sectors totalled RM197.1bil in 2017, compared with RM212.9bil in 2016.

Last year, the value of FDI approved stood at RM54.7bil, down 7.5% from RM59.1bil in 2016, while approved DDI fell 7.4% to RM142.4bil in 2017 from RM153.8bil previously.

Mustapa noted that FDI inflows for Malaysia in 2017 fell 17% to RM39.2bil from RM47.2bil in 2016.

He said the decline in FDI inflows to Malaysia reflected the trend of global FDI flows, which fell 16% last year, reaching an estimated US$1.52 trillion on weaker economic growth and major global policy risks.

Overall, the moderation in Malaysia’s investment performance last year was due to lower approved investments recorded in the services sector, which saw a decline of 17.2% to RM121.1bil in 2017 from RM146.2bil in 2016.

The decline was affected by the real estate subsector, which saw a 28.7% drop in value to RM45.7bil, despite a 43.1% increase in the number of projects approved, reflecting a change in investment strategies towards smaller-sized projects.

Nonetheless, the overall investment performance in 2017 was bolstered by the manufacturing and primary sectors, which recorded increases of 8.9% to RM63.7bil and 51.2% to RM12.4bil, respectively.

Approved investments in the manufacturing sector in 2017 came mainly from petroleum products, electrical and electronics products and natural gas, while approved investments in the primary sector last year were supported by higher natural gas production, particularly in Sabah and Sarawak.

MIDA revealed that as at Jan 31, 2018, it had 379 manufacturing & manufacturing-related services projects with investments totalling RM69.5bil in the pipeline. These were mainly in machinery & metal products, chemical products, global establishments and support services.

Overall, the number of investment projects approved last year stood at 5,466 that could generate an additional 139,520 jobs, compared with the approved 5,166 projects that could generate 154,491 new jobs in 2016.

Source: The Star