Malaysia looks to raise profile as a centre for investment

The government should continue to drive through initiatives to promote Malaysia as an investment centre, according to one of the country’s leading financial institutions.

Malayan Banking (Maybank) group president and chief executive officer Khairussaleh Ramli said the measures put together by the government would help to reduce friction in the market.

“We believe this is just a precursor to more developments to come and it is certainly something exciting for us to look forward to,” he said, speaking at the Maybank Invest Asean 2023 conference which was held in Singapore recently.

Prime Minister and Finance Minister Anwar Ibrahim has already announced measures such as reducing stamp duty rate for shares traded on Bursa Malaysia Securities, promoting corporate ventures beefing up the capital market.

In line with the government’s efforts, Khairussaleh said the group would continue to develop new opportunities for the investing community.

He said: “Perhaps we can encourage investors to not just look at the macro level from top down, but also looking at the potentials of individual companies.” He added that the banking group’s goal is to mobilise RM80 billion ($17 billion) in sustainable finance by 2025.

“As of March 2023, I am pleased to say we had mobilised a total of RM38.8 billion ($8.4 billion) to support low-carbon transition initiatives and sustainable development outcomes,” he said.

Meanwhile, Maybank group CEO, Global Banking, Datuk Muzaffar Hisham said the bank wanted to work closely with policymakers on decarbonisation, particularly in carbon trading across the Asean region, not just in Malaysia.

“We basically want to take the leadership and on the research side, our research team has come up with proprietary environmental, social and governance (ESG) scoring for up to 300 companies, and ESG analyses in Asean.

“We (have) even built our own model to calculate the sustainability of companies which are all published in our research reports,” said Muzaffar.

On a similar note, Maybank Investment Banking Group CEO Michael Oh-Lau expects investments into renewables and other green technologies to continue accelerating this year and in the coming years in Asean, supported by sustainable debt financing.

He said, with the Asean Capital Market Forum’s Sustainability-Linked Bond Standards in place, industries have greater flexibility in participating in the sustainable finance market.

“We can anticipate higher issuances of sustainability-linked and transition instruments in addition to the conventional green, social or sustainability instruments. We are at a pivotal point in the transition journey of Asean,” he said.

 

GDP growth set to slow for rest of 2023

OCBC Treasury Research has said Malaysia’s gross domestic product growth is likely to slow to 4.1% year-on-year from the second quarter to the fourth quarter this year. This is a fall from 5.6% growth in the first quarter of this year.

Meanwhile, AmBank said the overall trend shows that trade numbers continue to be much slower compared with last year’s performance. “We are expecting slower trading activity for the remainder of the year, given the pessimistic economic outlook globally,” it said.

AmBank said the effect of the higher interest rates and slower demand is already noticeable in trade with major trading partners, including the US, China and Singapore, which currently contributes around 40.8% of Malaysia’s overall exports.

“We are expecting slower trading activity for the remainder of the year, given the pessimistic economic outlook globally. Furthermore, the global manufacturing Purchasing Managers’ Index (PMI) and the PMI of the mentioned countries also remained under the contractionary level,” it said.

On the domestic front, AmBank said the latest manufacturing PMI (as of May 2023) shows the sector is contracting, as it has been since September 2022.

“The PMI survey points to weakness in output and new orders across both the local and external front. We expect the GDP for Malaysia to be at 4.5% for 2023, mainly supported by domestic factors including the labour market, continuous investments realisation and the improvement in the tourism sector,” it added.