Malaysia secures RM71.4b in investments in Q1 2023

[KUALA LUMPUR] Malaysia attracted RM71.4 billion (S$20.7 billion) of approved investments in the first three months of 2023, 60 per cent more than the same quarter last year, said Prime Minister Anwar Ibrahim on Monday (Jun 19).

These investments are for more than 1,200 projects that are expected to generate some 24,000 job opportunities for the country, he said in a speech at an event organised by Securities Commission Malaysia (SC).

Of the total investments in the first quarter of this year, foreign direct investment (FDI) accounted for slightly more than half, or about RM37.5 billion. This was due to strong interest from the likes of Tesla, Amazon Web Services and China’s Zhejiang Geely Holding and Rongsheng Petrochemicals.

For the whole of 2022, Malaysia secured net FDI of RM74.6 billion, which was 48 per cent higher than the previous year.

Speaking at the launch of SC’s capital market graduate programme in Kuala Lumpur, Anwar said the sustained rise in both foreign and domestic direct investments is a sign of the “restored confidence” of investors towards Malaysia’s growth outlook.

“The future of investments in Malaysia appears exceedingly promising,” said Anwar, who is also finance minister. “We are actively working towards improving the ease of conducting business, attracting high-value investments and cultivating a competitive workforce.”

Anwar said that the details of these plans will be revealed when the government announces the New Industrial Master Plan 2030 in August this year.

In his speech, Anwar also said that the Ministry of Finance will work closely with SC and Bursa Malaysia to reform and implement policies to attract more foreign and local investments.

A top priority will be stimulating Malaysia’s capital market. Among the measures he announced was the reduction of stamp duty charges for shares traded on the national stock exchange to 0.1 per cent (from 0.15 per cent) of contract value from July. This is subject to a cap of RM1,000 per contract.

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“This change will directly reduce the cost of securities transactions and make the Malaysian stock market more competitive,” he said.

Foreign investors have been sellers for 18 out of 24 weeks this year, with a total net foreign outflow of RM3.66 billion, indicated a new report released by MIDF Research on Monday. Local institutional investors have mostly been net buyers, with a total net inflow of RM3.2 billion.

Bursa Malaysia’s trading velocity decreased to 31 per cent in the first quarter this year, from 35 per cent in the same period in 2022.

Anwar also said that SC and Bursa Malaysia will expedite the process for initial public offerings and reduce the time-to-market for interested companies.

Meanwhile, the Ministry of Finance and SC will explore policies that can facilitate the setting up of more family offices to Malaysia, which can attract a larger pool of investors to support financing for small and medium-sized enterprises.

The government will continue to drive domestic direct investment through more tax measures and incentives, as well as widen the definition of sophisticated investors including angel investors, said the prime minister.

Malaysia’s economy grew by a better-than-expected 5.6 per cent in the first quarter of 2023. The unemployment rate continued its downward trend to hit 3.5 per cent, down from 4.1 per cent in the first quarter of last year.

“(We) will do all that is needed to drive inclusive and sustainable growth”, said Anwar. “Any reform requires discipline and patience. It also requires confidence and courage to do new things and make difficult decisions for the benefit of the people and the nation.”