Week 2 - 2024
NOVEMBER WHOLESALE, RETAIL TRADE SALES UP 6.2% TO RM142.6 BILLION – DOSM
The Edge, 11/01/2024
In November 2023, Malaysia’s wholesale and retail trade sectors showed a 6.2% year-on-year increase, reaching a sales value of RM142.6 billion. The marginal 0.2% monthly growth was primarily contributed by a 1.2% increase in retail trade, while the motor vehicles sub-sector experienced a negative growth of 1.6%, followed by the wholesale trade sub-sector with a decrease of 0.2%. Notable contributions to the 6.2% year-on-year growth in wholesale trade came from various sub-sectors, including other specialized wholesale (9.3%), wholesale of household goods (5.2%), and wholesale of agricultural raw materials and live animals (9.5%). Conversely, for monthly comparison, wholesale trade decreased by 0.2%, driven by declines in other specialized wholesale, wholesale of household goods, and wholesale of agricultural raw materials and live animals. In the retail trade sub-sector, the 4.4% year-on-year increase was supported by retail sales in non-specialized stores, growing by 6.5% to RM23.4 billion. The index of retail sales over the internet decreased by 1% year-on-year in November, and for seasonally adjusted value, the index contracted by 4.4% from the previous month.
NOVEMBER MANUFACTURING SALES VALUE DOWN 2.6% – DOSM
The Edge, 11/01/2024
In November 2023, Malaysia’s manufacturing sector witnessed a 2.6% year-on-year decline in sales value, amounting to RM155 billion, primarily attributed to significant drops in the petroleum, chemical, rubber, and plastic products sub-sector (10.8%) and the electrical and electronics products sub-sector (5.3%). Compared to the preceding month, the sales value fell by 1.1%. Export-oriented industries, constituting over two-thirds of total sales, experienced a wider decline of 6.9% in November, with notable decreases in the manufacture of coke and refined petroleum products, manufacture of computer, electronics, and optical products, and manufacture of vegetable and animal oils and fats. However, domestic-oriented industries sustained positive momentum with an 8.8% growth. The manufacturing sector engaged 2.38 million persons in November 2023, showing a 2.1% increase year-on-year. Salaries and wages paid in the sector rose by 3.3% year-on-year to RM8.1 billion. For the cumulative 11 months of 2023, the manufacturing sector’s sales value reached RM1.65 trillion, growing marginally by 0.6% year-on-year, with an increase in the number of employees and salaries and wages.
NOVEMBER INDUSTRIAL PRODUCTION INDEX UP 0.6% – DOSM
The Edge, 11/01/2024 & The Star, 12/01/2024
In November 2023, Malaysia’s Industrial Production Index (IPI), measuring real output in manufacturing, mining, and electric industries, showed a marginal year-on-year increase of 0.6%. The mining segment experienced a modest expansion of 1.9%, and the electricity sector grew by 4.2%, contributing to the overall uptrend. However, the manufacturing sector output turned negative at -0.1% after two consecutive months of positive growth. The export-oriented industries slipped by 2.2%, aligning with the country’s overall export performance, which recorded a negative 5.9% in November. On the other hand, domestic-oriented industries remained resilient, registering a 5.8% increase in November, boosted by the manufacture of food processing products, fabricated metal products (except machinery and equipment), and other non-metallic mineral products. For the cumulative 11-month period, the IPI rose at a slower rate of 1.0% compared to 7.1% in the same period in 2022, with support from the electricity index, manufacturing, and mining.
UNEMPLOYMENT RATE BACK TO PRE-PANDEMIC LEVEL OF 3.3% IN NOVEMBER – DOSM
The Edge, 10/01/2024
The unemployment rate in Malaysia has returned to pre-pandemic levels, standing at 3.3% with 569,000 unemployed individuals, a slight decrease from October’s 3.4%, according to the Department of Statistics Malaysia, citing an increase in employed persons (16.43 million) and a decline in unemployment. The services sector, including information and communications, food and beverage services, and transportation, reported growth in employment. Other sectors like manufacturing, construction, and mining also saw increased employment, while agriculture recorded a decline. Actively unemployed individuals seeking jobs comprised 79.9% of total unemployed persons, with 61.8% unemployed for less than three months. Despite global challenges and local floods in 2023, Malaysia’s diversified economic structure and strong fundamentals contribute to stable economic growth, with expectations of a boost during the holiday season, especially in tourism activities. The labor market is predicted to remain robust in the coming months.
SILVER VALLEY TECHNOLOGY PARK TO BRING IN RM14 BILLION IN INVESTMENTS
The Edge, 08/01/2024
The Silver Valley Technology Park (SVTP) high-impact project is expected to bring an estimated RM14 billion in domestic direct and foreign direct investments. Spanning 816 acres and strategically located between the Kanthan Industrial Park and Bandar Meru Raya in Ipoh, the project will offer up to 13,000 job opportunities once completed within the next five to 10 years. Estimated to have a gross development value of RM1.03 billion, the project involves the collaboration between the Perak State Development Corporation (PKNPk) and its subsidiary, Perak Corp Bhd, with strategic partner Advancecon Holdings Bhd.
NESTCON CLINCHES RM108 MILLION CONSTRUCTION JOB FROM EXSIM AVENUE
The Edge, 10/01/2024
Nestcon Bhd has secured a construction contract worth RM108 million from Exsim Avenue Sdn Bhd for a mixed commercial development project. The contract, awarded to Nestcon’s wholly-owned unit, Nestcon Builders Sdn Bhd, involves main building works for a 37-storey mixed commercial development, including retail shops, 220 strata office units, 126 service apartments, car parks, and other facilities. The project is set to be completed within 39 months, starting on 15 January, with an expected completion date of 14 April 2027. This marks Nestcon’s second contract in 2024, following a RM251.5 million contract for a mixed development project in Mukim Petaling in the Klang Valley.
THE SILVER VALLEY TECHNOLOGY PARK (SVTP) HIGH-IMPACT PROJECT IS EXPECTED TO BRING AN ESTIMATED RM14 BILLION IN DOMESTIC
The Sun, 11/01/2024
The Malaysian government aims to enhance flight connectivity with China, focusing on direct and transit flights as well as chartered flights to promote interactions within Muslim communities. Negotiations with airlines are underway for a round-trip flight from Xi’an to Kuala Lumpur in March and a chartered flight from Urumqi to Kuala Lumpur in May or by July. China is a significant tourist source for Malaysia, and efforts are being made to tap into the untapped Muslim market in China. Malaysia, known as a Muslim-friendly destination, recently announced visa liberalization plans for international tourists, including those from China. The government is committed to establishing a regional Umrah hub in Malaysia, allowing Muslim travelers to explore the country’s attractions before or after performing Umrah.
KING OPENS MENARA MERDEKA 118
The Star, 12/01/2024
Menara Merdeka 118, the world’s second tallest tower, was officially opened by Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah. Menara Merdeka 118 is owned by PNB through its wholly-owned subsidiary, PNB Merdeka Ventures Sdn Bhd. The sophisticated tower, standing at 678.9m with 118 floors, is the second tallest in the world after the Burj Khalifa in Dubai, which is 828m. Designed by Melbourne-based Fender Katsalidis, the tower has a 40-storey spire (160.4m).
HOTELS IN MALAYSIA AMONG MOST AFFORDBALE GLOBALLY
The Sun, 08/01/2024
Hotels in Malaysia are noted for offering affordable rates compared to global counterparts, despite challenges post-Covid-19. The lower value of the ringgit contributes to this affordability. The industry experienced a 30%-45% reduction in room rates due to the pandemic, exacerbated by a weakened foreign exchange. Financial constraints persist as foreign tourist numbers remain lower than pre-pandemic levels. Cost-saving measures are being implemented, and there is consideration for maintaining a 6% Sales and Service Tax (SST) to avoid discouraging domestic tourism. Some hotels are contemplating raising rates for foreign tourists. Collaboration with the Tourism Ministry aims to enhance occupancy rates. Despite challenges, the industry remains optimistic about improvement, especially with a projected 24 million tourists in 2024.
15,000 AFFORDABLE HOUSES TO BE READY THIS YEAR
The Sun, 10/01/2024
Approximately 15,000 units of Rumah Mesra Rakyat single-storey houses are set to be completed nationwide in 2024, a year earlier than planned, according to the announcement by the Local Government Development Minister. As of December 2023, 13,845 units have been completed, exceeding the initial target of 9,000 units for the previous year. The government aims to achieve the completion of 500,000 affordable houses by 2025 under the 12th Malaysia Plan. Kelantan leads in the number of houses built, followed by Sabah, Selangor, Sarawak, and Penang. The Rumah Mesra Rakyat unit, priced at RM75,000, supports individuals with a household income of less than RM5,000, with a government subsidy of RM20,000. Financing options, such as the Malaysian Housing Financing Initiative i-Biaya, are available. The government allocated RM5 billion in Budget 2023, with an additional pledged RM10 billion in Budget 2024 to assist potential homeowners. The National Affordable Housing Council monitors progress to achieve the 500,000-unit target by 2025. Government policies have spurred a rebound in the property market and increased development after the Covid-19 pandemic. The ministry successfully revived 351 sick and abandoned housing projects, with an additional 800 housing units expected under the Madani Inclusive Housing Project initiative.
DEVELOPMENT AUTHORITY SETS NEW ISKANDAR MALAYSIA CUMULATIVE INVESTMENT TARGET OF RM636 BILLION BY 2030
The Star & The Sun, 09/01/2024
The Iskandar Development Regional Authority (IRDA) has set a new cumulative investment target for Iskandar Malaysia of RM636 billion by 2030, after the initial target set during the inception of the economic region was surpassed successfully. The region had recorded total cumulative investments of RM409.5 billion since the establishment of Iskandar Malaysia in 2006 till September 2023, exceeding the initial target of RM383 billion that the IRDA had aimed for based on the Comprehensive Development Plan (CDP) 2006 to 2025. The RM383 billion target, which was recorded in February 2023, was achieved almost three years ahead of the 19-year-long target, showing that Iskandar Malaysia and Malaysia’s offering of various competitive advantages continue to attract investors’ interest and trust in the country. Iskandar Malaysia recorded committed investments of RM33.6 billion from January to September 2023, with RM11 billion having been realised. The main contributors are from the business services sector, which includes investments in regional data centres amounting to RM22.4 billion; and the manufacturing sector, with RM7.7 billion. Apart from this, IRDA has also projected around 400,000 new jobs to be created in Iskandar Malaysia between 2020 and 2030, resulting in total employment of nearly 1.4 million by 2030.
MALAYSIA SIGNS MOU WITH SINGAPORE TO FORMALISE COOPERATION ON JOHOR-SINGAPORE SPECIAL ECONOMIC ZONE
The Edge, 11/01/2024 and The Star, 12/01/2024
The Economy Minister has signed a memorandum of understanding with Singapore’s Minister of Trade and Industry to formalize cooperation on the Johor-Singapore Special Economic Zone (JS-SEZ). The agreement aims to enhance cross-border flows of goods and people, strengthen the business ecosystem, and support investments within JS-SEZ. The specific scope and area of JS-SEZ are yet to be clarified. Initiatives include a one-stop business/investment service center in Johor, a passport-free QR code clearance system, and digitized processes for cargo clearance. Both nations plan to update progress at the 11th Malaysia-Singapore Leaders’ Retreat in 2024. The JS-SEZ, proposed by the Economy Minister, follows a feasibility study and cooperation under the Joint Ministerial Committee for Iskandar Malaysia. Malaysia and Singapore are significant trading partners, with the JS-SEZ expected to bring substantial opportunities and advantages to Iskandar Malaysia. The RTS Link viaduct connecting Johor Bahru and Woodlands North is also progressing, with full operational status expected by 1 January 2027.
S P SETIA SET TO GAIN BETTER VALUE FOR ITS LAND IN JOHOR
The Star, 09/01/2024
Last Friday, the property group announced that the disposal of 960 acres of freehold agricultural land in Mukim Tebrau to Scientex’s 70%-subsidiary Scientex Lestari was terminated due to non-fulfilment of a condition relating to approval from the Economic Planning Unit (EPU). S P Setia had proposed to sell the land to Scientex Lestari for RM548 million or RM13 per sq. ft. in early July 2023. Notably, this is the second time the property group’s attempt to sell the prime land in Johor to Scientex encountered a setback. The first time was in 2021 at a price of RM518mil or RM12.39 psf. However, the deal collapsed in March 2023 due to Scientex’s inability to secure a waiver for the bumiputra equity condition mandated by the EPU. Together with land sales in Semenyih and Setia Alam, the land disposal to Scientex was supposed to lower S P Setia’s net gearing to 0.48 times (as per its guidance) from 0.53 times as of end-Sept 2023.
ROHAS TECNIC CONSORTIUM BAGS RM199.84M JB-SINGAPORE RTS BUKIT CHAGAR FACADE CONTRACT
NST, 10/01/2024
Rohas Tecnic Bhd (RTB) has bagged a construction contract worth RM199.84 million from Malaysia Rapid Transit System Sdn Bhd (MRTS) for the construction and completion of Bukit Chagar’s facade for the Rapid Transit System Link Johor Bahru – Singapore Project (RTS Link Project – Package 8). The Rohas-Euco Industries Bhd-Sediabena Builders Sdn Bhd Consortium (consortium) signed the letter of acceptance issued by MRTS on 8 January 2024. The consortium comprises of Rohas-Euco Industries Bhd (REI), a wholly-owned subsidiary of the Rohas Tecnic, and Sediabena Builders Sdn Bhd (SBSB). REI and SBSB, which are both involved in the design and fabrication of steel structures, will be entering into a joint venture agreement. The RTS Link Project – Package 8 is expected to be completed by 31 May 2025 and contribute positively to its earnings for the financial years ending 31 December 2024 and 31 December 2025.
GOVERNMENT CONFIDENT RTS LINK READY FOR OPERATION ON 1 JANUARY 2027
The Edge, 11/01/2024
The government expresses satisfaction with the progress of the Rapid Transit System (RTS) Link project connecting Johor Bahru and Singapore. The transport minister is confident that the transport system will be operational by 1 January 2027. Both countries are committed to the project’s success, with regular discussions. The construction of the marine viaduct is 68% complete, while the terrestrial viaduct is at 31%. The station is 41% complete, and the CIQ Complex stands at 3%. The assurance is given that the RTS Link fare will be competitive, offering a seamless journey with immigration clearing at one station. The commitment to the project is symbolically affirmed by the leaders of both nations, which includes a commuter rail network with two stations and a capacity of 10,000 passengers per hour in each direction.
IVORY PROPERTIES PROCEEDS WITH RM40 MILLION PENANG LAND DEAL WITH CHIN HIN
The Edge & NST, 11/01/2024
Ivory Properties Group Bhd has finalized the agreement to sell a 1.22-acre freehold land in Penang to Chin Hin Group Property Bhd for RM40 million. The land, part of the Penang Times Square development, will be utilized for a multi-storey residential project. The deal, part of Ivory’s regularisation plan, includes a member of Ivory being appointed as the turnkey builder for the development, expected to generate approximately RM150 million in construction revenue. Chin Hin views the acquisition as aligning with its strategy to expand its property development segment and expects positive contributions to future earnings due to the land’s strategic location. The acquisition is set to be completed in 1Q25.
HUME CEMENT SELLS PRAI INDUSTRIAL PLOT FOR RM39.80 MILLION
The Edge, 11/01/2024 & The Star, 12/01/2024
Hume Cement Industries Bhd (HCIB), a member of the Hong Leong Group, has accepted a cash offer of RM39.80 million for the sale of its leasehold industrial land in the Prai Industrial Estate in Penang. The offer, made by Skygate Technology (KL) Sdn Bhd, includes the land and the buildings on it. While the exact size of the plot was not disclosed, it is estimated to be around 653,400 sq. ft. based on the annual report. The net book value of the land as of 30 June 2023, was RM1.32 million. The proposed disposal is expected to bring an estimated net gain of RM32 million for HCIB.
PE LAND TO BUILD GRADE A OFFICE TOWER IN BATU KAWAN, PENANG
The Star, 09/01/2024
Property developer PE Land Sdn Bhd has broken ground for Capstone Corporate Suites at Bandar Cassia, Batu Kawan, Penang and is set to develop the first Grade A, Green Office Tower in the area and retail units to local and multinational companies in the northern region. The development is aligned with Penang’s aspiration for growth in every sector and its commitment to the environment. The development is located adjacent to the outlet mall Design Village, condominium Anggun Residences and a linear park which were all developed by PE Land. Capstone Corporate Suites will occupy a 2.4-acre plot of land and its gross development value is estimated to be at RM500 million. The tower will comprise 17 retail lots ranging from 2,110 sq. ft. to 7,623 sq. ft. and 395 office spaces ranging from 1,179 sq. ft. to 3,859 sq. ft. There will be 1,740 covered parking lots with an additional 1,600 carpark lots available next door at Design Village. The Design Village has transformed the township of Bandar Cassia in Batu Kawan into a vibrant place, while, Anggun Residences has achieved a 95% take-up rate. Construction of the 36-storey tower will begin soon after the groundbreaking ceremony project and is expected to be completed in 2027.