Singapore businesses unfazed; await new KL government's plans

Singapore

SINGAPORE'S business community is surprised but unworried by Pakatan Harapan's (PH) shock victory in Malaysia's general election, with industry associations waiting to see what the new government's plans are.

The Singapore Business Federation is following developments and "is confident that the new government will remain committed to advancing bilateral ties with Singapore", said chief executive officer Ho Meng Kit.

"Our business relationships with Malaysia are strong and they form a good foundation for further growth. We are confident that both countries will ensure continuity and stability for mutual benefits," he added.

"Apart from the immediate volatility in the financial markets, we expect it would be business as usual, notwithstanding that companies are likely to wait for a clearer picture to emerge."

Singapore International Chamber of Commerce chief executive Victor Mills similarly expects "business as usual", while waiting to see what the new government's policy stance is.

He noted that "most commentators do not see the election result as impacting the economy adversely".

UOB economists Julia Goh and Alvin Liew, for instance, believe "Malaysia's fundamentals remain strong", with risks to be reassessed when there is greater clarity over the coming months.

Association of Small and Medium Enterprises president Kurt Wee thinks the new government should be given nine to 10 months to entrench itself first. He does not foresee any long-term impact on businesses.

"As long as Malaysia heads towards greater transparency instead of being inward-looking, it will be good," he added. "Markets will also value greater transparency and accountability."

Firms large and small appear sanguine. Wilmar International's chief financial officer Ho Kiam Kong told an after-market earnings briefing that the agribusiness group sees "little impact from the results of the general election in Malaysia".

He added: "We do not foresee any large impact on palm oil prices or the way we would operate."

Singapore's construction industry has close ties with Malaysia in areas such as materials, precast and prefabrication, but firms here are not shaken by the political surprise, said Singapore Contractors Association Limited president Kenneth Loo.

Though it is still too early to tell what the new government's plans are, he does not expect policy moves that will affect construction players here.

John Kong, managing director of building supplies firm M Metal, expects infrastructure spending to continue, saying: "We are not worried."

But he hopes the new government will announce policy moves in advance and not make changes overnight, so firms can factor these into their business models.

Citing PH's proposal to scrap the goods and services tax in favour of a sales tax, he said: "The earlier they decide, the more stability it will bring."

Wong Loke Hsien, business manager of drink manufacturer Asia Farm F&B, which has operations in Malaysia, said a sales tax will be more tedious for firms but "other than that, everything should be as usual".

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