INVE$T | Market Sentiments
According to CEO Muhammad Azmi Zulkifli, InvestKL has attracted RM1.92 billion in new investments with 1,207 jobs for the first half of this year, reinforcing Greater Kuala Lumpur’s appeal as a top location for multinational corporations (MNCs) to set up a regional base.
In 1H21, it has secured investments from seven MNCs, contributing to its year-end target as well as the larger 10-year strategic plan to attract 100 of the world’s MNCs and fast-growing companies to set up regional services and technology hubs in Malaysia through 2030. Over the last decade the agency, under the International Trade and Industry Ministry, has succeeded in securing investments from 103 MNCs. The achievement is a testament to the country’s continued appeal to foreign investors as a preferred investment destination despite the Covid-19 pandemic disruption, reflecting Malaysia’s fundamentals and investor-friendly policies. The MNCs coming in this year are involved in various sectors, from financial services, food technology, infrastructure, to data and software solutions provider. They represent a balanced mix of countries and regions including the US, Europe, China, and Japan. These companies will offer regional job opportunities to Malaysians while helping to upskill them. The Greater Kuala Lumpur Live Lab and Fit4Work initiatives have contributed to its progress this year. The two initiatives are designed to help revitalise the nation’s innovation capacity and build a pool of globally competitive Malaysian talent to complement the kind of high-value, high-technology and high-growth companies it is aiming to attract. This is aligned with the National Investment Aspiration, which is aimed at achieving a balance between economic development and environmental sustainability.
Since the agency’s inception in 2011 to end-June 2021, it has realised RM11.56 billion or 65% of the RM17.73 billion investment commitments, translating into 10,850 or 71% of the 15,318 high-skilled regional jobs on the payroll with an average salary of RM10,384. Moving forward, the challenges ahead are inevitable given the shift in business landscape due to a prolonged pandemic environment as companies reassess strategies and deferring investment plants. By showcasing Malaysia’s growth and resilience in the next remaining months, he is positive on a return of investor confidence. InvestKL has embraced a new era in investment promotion where we continue to engage and connect with potential investors through new ways and actively promote Greater Kuala Lumpur as the ideal location for regional operations and future growth.
Property market confidence returning by 2022 – Knight Frank Malaysia
According to Knight Frank Malaysia managing director Sarkunan Subramaniam and deputy managing director Keith Ooi, residential properties are expected to remain subdued this year until the health crisis is brought under control. The residential market would continue to self-correct amid challenges brought on by the Covid-19 pandemic. There were fewer completions and launches in the first half of this year as the strict containment measures delayed construction works, project delivery, and completion of real estate transactions.
In the secondary market, no property viewings and on-site surveys have been allowed since June. There appears to be pent-up demand in the housing market which is evident by the short burst of recovery in market activity when movement restrictions were temporarily lifted. The high-end condominium market in Kuala Lumpur would continue to undergo price correction due to weaker demand amid rising inventory for both existing and newly built. Similarly, in the tenant-led market, rentals remain under pressure due to weaker leasing demand. The economy is still in its recessive phase and market confidence is expected to return gradually by early 2022 as buyers and financiers are all on cautiously optimistic mode. The property market is widely expected to start recovering on the back of a more positive outlook, following recent acceleration in vaccine drive, and strong interest from domestic investors shifting from the stock market to safer and less volatile alternative investment products.
On a positive note, the Home Ownership Campaign has been successful in reducing the property overhang with an estimated 34,354 residential units worth RM25.65bil sold from June 1, 2020, to Feb 28, 2021. The Covid-19 pandemic has fuelled the demand for residential properties, especially new landed housing outside the city – in established and upcoming suburbs with good connectivity where prices are more affordable and competitive. With the potential shift to hybrid work arrangements post-pandemic, buyers are seeking ideal living spaces with a higher emphasis on functionality and comfort. The general buyer focus has now shifted from investment towards creating a haven to live, relax and work in comfort due to the ‘stay at home’ orders amid the various phases of the movement control order. Potential buyers and investors who have the financial capability may be enticed to enter the housing market – to buy a home for their own stay, upgrade or investment – taking advantage of the price discount, attractive deals, stamp duty exemption as well as the current low-interest-rate regime.
Eye On The Markets
This week, on Thursday (22July), the Ringgit was 4.2235 against the USD from 4.2125 on Monday (19July). Meanwhile, the Ringgit was 3.1104 to the Sing Dollar on Thursday (22July). On Monday (19July), the FBM KLCI opened at 1522.67. As at Friday (23July) 10:00am, the FBM KLCI is up 4.45 points for the week at 1527.12. Over in US, the overnight Dow Jones Industrial Average closed up 25.35 points (+0.07%) to 34,823.35 whilst the NASDAQ added 52.60 points (+0.36%) to 14,684.60.