Malaysia: Investment Approvals surged in H12021 – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the latest figures from investment approvals in the Malaysian economy.

Key Quotes

“Malaysia attracted a total committed investment of MYR107.6bn in 1H21, 69.8% higher than the MYR63.3bn a year ago that was weighed by the first COVID-19 outbreak across the world. Manufacturing sector remained the most favourable industry with approved investments totalling MYR66.9bn (or 62.2% of total committed investments), followed by services (MYR34.1bn or 31.7%) and primary sectors (MYR6.5bn or 6.1%).”

“Foreign interest in investing in Malaysia remained high with foreign direct investment (FDI) approvals making up more than 58% of total approved investment in 1H21 (at MYR62.5bn, +214.9% y/y). This compared to nearly 42% from domestic sources (at MYR45.1bn, +3.6% y/y). A large bulk of FDI approvals was channelled into the manufacturing sector (MYR58.2bn or 93.1% of total approved FDI), particularly for new projects. Top three leading sources of FDI in the manufacturing sector were Singapore, South Korea, and the Netherlands, accounting for a combined MYR53.0bn or 91.1% of total approved FDI in the sector during 1H21.”

“We expect the investor sentiment to pick-up in 4Q21 in tandem with further reopening of the economy and progressive vaccination rates to reach 100% of adult population by year-end… We maintain our 2021 full-year investment approvals forecast of MYR185.0bn (2020: MYR167.4bn) with year-to-date total committed investments hitting 58.2% of our target.”