Week 6 - 2023

ECONOMY TO GROW AT MODERATE PACE OF 4% THIS YEAR

The Star, 04/02/2023

Malaysia’s economy is projected to grow at a more moderate pace of 4% this year, with domestic private sector spending is expected to be the main driver of growth amid an expected slowdown in external demand.  According to the World Bank, private consumption is forecast to expand at a slower but still relatively robust rate of 6.7% in 2023, sustained by the ongoing improvement in labour market conditions as well as ongoing household income support from the government. Gross fixed capital formation is projected to increase by 4.2% in 2023 (2022 estimate: 5.3%), reflecting the continued flows of capital investments in the private and public sectors.

Capital expenditure in the private sector is expected to continue to be driven by ongoing and new multi-year investments in the technology-intensive manufacturing and services sectors. Capital spending by the government is expected to be mainly directed towards the upgrading of public infrastructure and amenities including the East Coast Rail Link, Light Rail Transit 3, Mass Rapid Transit 3, the Johor Baru-Singapore Rapid Transit System, Sarawak-Sabah Link Road Phase 2, and Trans Borneo Highway.

Trade growth is expected to moderate in 2023, with Malaysia’s export growth projected to slow to 2.2%, in line with softening global growth prospects and weakening international trade momentum. Similarly, the import growth is projected to moderate to 2.1% in 2023 (compared to 15.3% for the 2022 estimate) reflecting the slower import growth across consumption, intermediate, and capital goods.

The global growth is forecast to decelerate sharply to 1.7% this year, from 2.9% estimated for 2022, reflecting the synchronous policy tightening, worsening financial conditions and continued disruptions from the Russia-Ukraine conflict. For advanced economies, growth is projected to slow markedly to 0.5% (2022: 2.5%) as central banks continue to tighten monetary policy to contain inflationary pressures. In the East Asia and Pacific region, growth is projected to firm to 4.3% in 2023 (2022: 3.2%) as the easing of pandemic-related restrictions allows activity in China to pick up. Excluding China, growth is projected to moderate to 4.7% in 2023-2024 as continued recovery in domestic demand and belated recovery in tourism and travel offset weaker growth of goods exports.

DOSM: DECEMBER MANUFACTURING SALES UP 8.6% TO RM156.3 BILLION

The Edge Market, 07/02/2023

The sales value of Malaysia’s manufacturing sector expanded by 8.6% year on year in December 2022 to RM156.3 billion, while the overall performance reached RM1.8 trillion in 2022. The expansion of sales value in December 2022 was reinforced by growth in the transport equipment and other manufacturing subsector (10.9%), particularly in the manufacturing of motor vehicles, trailers and semi-trailers industries. The sales value of export-oriented industries, which accounted for 72.5% of total sales, grew by 9.2% in December 2022 as compared to the growth of 13.6% recorded in November 2022, in line with the slower performance of exports during the month. In comparison to November 2022, the sales value of the export-oriented industries continued to decline by 2.3%, while the domestic-oriented industries returned to a negative growth of 0.3%. For 4Q22, the sales value of the manufacturing sector continued to record a double-digit growth of 11.1%, against RM474.4 billion for 4Q21. The growth was propelled by the petroleum, chemical, rubber and plastics products (16.2%), electrical and electronics products (14.8%), and food, beverages and tobacco products (6.5%) subsectors, he said. The sales value of the manufacturing sector in 2022 was RM1,800.7 billion, an increase of 15.8% from 2021.

DOSM: MALAYSIA’S SERVICES PRODUCER PRICE INDEX UP 3.3% IN 4Q22

The Edge Market, 07/02/2023

The services producer price index (SPPI) increased by 3.3% in 4Q22 compared with 110.7 in the same quarter of the preceding year. Overall for 2022, SPPI increased by 2.1% compared with 0.3% recorded in 2021 mainly due to the accommodation and food and beverage service activities (5.4%), arts, entertainment and recreation (4.3%), and transportation (3%) subsectors.

DOSM: MALAYSIA’S IPI GREW AT 6.9% IN 2022 DRIVEN BY MANUFACTURING, MINING INDICES

The Edge Market, NST, 07/02/2023 & The Star, 08/02/2023

Malaysia’s industrial production index (IPI) for 2022 narrowed to 6.9% from 7.2% recorded in 2021, driven by the manufacturing index (8.2%), electricity index (4.5%), and mining index (2.8%).

DOSM: CONSTRUCTION SECTOR POSTS 8.8% REBOUND IN 2022

The Star & Bernama, 09/02/2023

The 2022 overall construction sector posted an 8.8% rebound after a two-year declining trend, according to the Department of Statistics Malaysia (DOSM). All sub-sectors picked up during the year with double-digit growth recorded in special trade activities (19.6%); and non-residential buildings (18.7%). The civil engineering and residential building sub-sectors turned around to positive growth of 2.7% and 3.4%, respectively. The total value of work done in 2022’s construction amount to RM121.0 billion, which is lower than the pre-pandemic period in 2019 (RM146.4 billion).

On a state level basis, more than 60% of the value of the work done was concentrated in Selangor (RM7.7 billion: 24.2%); Wilayah Persekutuan (RM4.7 billion: 14.7%); Sarawak (RM3.7 billion: 11.7%); and Johor (RM3.4 billion: 10.7%).

DOSM: WHOLESALE AND RETAIL VOLUME INDEX UP 9.9% IN 4Q22

NST, The Edge Markets & Bernama, 09/02/2023

The volume index of the wholesale and retail trade Malaysia registered a 9.9% growth year-on-year (y-o-y) in 4Q22, bringing the overall performance for 2022 to 14.3%. The increment was attributed by the retail trade sub-sector, which rose from 19.3%, followed by motor vehicles and wholesale trade, which increased 7.0% and 0.9%, respectively. The wholesale trade sub-sector recorded a 0.9% growth in 4Q22 as compared to 4Q21, contributed by wholesale of agricultural raw materials and live animals of 13.7%. The volume index of wholesale and retail increased 14.3%. supported by motor vehicles, retail trade and wholesale trade, which grew 39.2%, 19.2% and 3.6%, respectively.

NAPIC: MALAYSIA’S RESIDENTIAL OVERHANG IMPROVES IN 3Q22

EdgeProp & The Edge Markets, 09/02/2023

Malaysia’s overall residential overhang situation has improved in 3Q22 to 29,534 units, from 34,092 units in 2Q22. The 29,534 units are valued at RM19.95 billion, with condominiums and serviced apartments being the biggest contributor to the overhang. The majority of the total residential overhang units are those priced between RM500,000 and RM1 million at 31.6%. However, while properties priced above RM1 million only constitute 15.1% of the total overhang, the segment contributes to the highest value at RM8.65 billion or about 43%. Johor has the highest overhang number (5,348 units), followed by Penang (5,222 units) and Selangor (4,386 units).

The residential transactions for 9M2022 were still dominated by properties priced RM300,000, which is similar to the residential transaction trend in 2012.  Such a scenario poses questions on the country’s effort to transform into a high-income state.

MIDA ON TRACK TO SECURE RM70 BILLION TARGET FOR DIGITAL INVESTMENTS

The Star, The Sun, The Edge Markets & Bernama, 10/02/2023

The Malaysian Investment Development Authority (MIDA) is on track to achieve its RM70 billion target for digital-related investments in line with the Malaysia Digital Blueprint’s (MyDIGITAL) strategies. The Digital Investment Office (DIO), a collaborative platform between MIDA and the Malaysia Digital Economy Corporation (MDEC), has successfully facilitated a total of RM66.47 billion investments as of September 2022, which is over 99% of the target under the MyDIGITAL initiative.

Among the notable data centre and data hosting projects approved, include the People’s Republic of China’s Bridge Data Centres Malaysia III Sdn Bhd and ByteDance System Sdn Bhd, as well as Malaysian public-listed company YTL Power International Bhd. This is a testament to Malaysia’s readiness to host more digital investments projects.

DOSM: DECEMBER UNEMPLOYMENT RATE AT 3.6%

The Sun, 10/02/2023

December’s unemployment dropped further to 599.6 thousand persons, recording a 3.6% unemployment rate. The statistics are based on the Labour Force Survey conducted by the Department of Statistics Malaysia (DOSM). It was said that the year-end holiday season had led businesses to pick up, especially for consumption of goods and services. The number of labour force in December increased by 0.1% to record 16.73 million persons (November 2022: 16.71 million persons), while the labour force participation rate (LFPR) was at 69.8% as compared to November 2022. The number of employed persons remained on a positive trend, with a month-on-month increase of 0.1% to record 16.13 million persons in December 2022 (November 2022: 16.11 million persons). Meanwhile, the unemployment rate remained at 3.6% as in the previous month (November 2022: 3.6%) with the number of unemployed persons continued to fall, registering a negative growth of 0.2% to 599.6 thousand persons in December 2022, which was below the level of 600 thousand persons for the first time since March 2020 (November 2022: 600.9 thousand persons).

Looking at the employed persons by economic sector, the services sector continued to record a positive growth in employment, largely in wholesales & retail trade, food & beverage services activities, and information & communication activities. Agriculture, manufacturing, construction and mining & quarrying sectors also maintained their positive trend in the number of employed persons.

SUBANG SET TO SOAR AGAIN

The Star, The Edge Markets, The Sun & NST, 07/02/2023

The cabinet has given the green light for the Subang Airport Regeneration Plan (SARP). The transformation plan will develop the airport into a preferred place for aerospace and business aviation in the Asia-Pacific Region as well as building up the General Aviation/Business Aviation (GA/BA) field and a complete Aerospace Ecosystem. There are 7 components involved, which includes the aerospace industry centre, a Maintenance, Repair and Overhaul (MRO) Centre, research and development centre, general aviation operations, business aviation operations, urban air mobility (UAM) and regional commercial flight operations.

The airport’s planned transformation would include the reintroduction of commercial passenger flights using jetliners for GA/BA, urban air mobility and regional commercial flight operations. Only narrow-body jets with popular models such as the A320 and the B707 will be allowed to fly to Subang Airport after the SARP is completed.

Malaysia Airport Holdings Berhad (MAHB) would be given two months to develop a detailed business plan, with the final cost of the rejuvenation plan to be announced only after the business plan is finalised. The end goal would be to revitalise Subang Airport as a regional aviation hub with a maximum capacity of eight million passengers a year, thus creating thousands of high-value jobs in Malaysia.

SKYPARK LINK WILL BE SUSPENDED FROM FEB 15

The Star & NST, 07/02/2023

KTM will suspend the Skypark Link service from 15 February 2023 due to low passenger volume of fewer than 100 passengers per day and would restart when the airport gains more traffic. Introduced in May 2018, the Skypark Link, a limited express service, is the rail service that connects passengers from KL Sentral all the way to the Skypark Terminal Subang Airport in 30 minutes. The five sets of three-car trains have been providing anything from around 21 to 31 trips per day, with ridership badly affected during the pandemic.

The following trainsets will be deployed for the KTM Komuter service in the northern sector, between Padang Besar and Butterworth. The existing KTM train station at Subang Skypark is included in the revamp plan of Subang Airport Regeneration Plan.

KTMB TO COLLABORATE WITH LONDON-BASED EASTERN & ORIENTAL EXPRESS TO BOOST TOURISM, RAIL INDUSTRY

The Edge Market, 08/02/2023

Keretapi Tanah Melayu Berhad (KTMB) on Tuesday signed an agreement with London-based leisure and luxury train service company Eastern & Oriental Express Limited (E&O) to strengthen the rail industry and revive tourism in the country. The agreement includes improvements to the existing agreement from a commercial aspect for E&O to use the rail route in Malaysia starting from Woodlands, Singapore to Padang Besar in Perlis before continuing to Bangkok, Thailand. In 2019, a total of 2,500 passengers were recorded with the offer of 39 services that brought tourists from the United Kingdom, United States and around Asia. The service stop locations included Kuala Lumpur, Kuala Kangsar and Butterworth. KTMB, which had established cooperation with E&O since 1991, said it expects the train service along the route from Singapore, Malaysia and Thailand to resume operations in 4Q23 after it was temporarily stopped in 2020 due to the Covid-19 pandemic.

PUTRAJAYA MRT LINE’S DAILY RIDERSHIP TO HIT 200,000 WITHIN TWO YEARS

The Edge Market, The Sun, 07/02/2023

Daily ridership of the Putrajaya Mass Rapid Transit (MRT) Line is expected to hit about 200,000 within two years, after the launch of its full operations in March 2023. Phase 2 of the Putrajaya MRT Line is now 99.9% complete and should attract more public transport users when it begins service in the middle of next month. The Putrajaya MRT Line, which cost RM30.53 billion in terms of construction and system installation, will cover 36 stations using 49 train sets operating at a frequency of five minutes each initially. The ministry plans to expand the Titiwangsa Station into a major transport hub connecting the Monorail service, the Ampang LRT Line, the MRT2 (the Putrajaya route), and the proposed MRT3. The site identified for the project belongs to MRT Corp, which is tasked with developing the project, including procurement and tender matters. The transport hub would be built on the site of the demolished Pekeliling Flats based on the transit-oriented development concept. The opening of Phase 2 of the Putrajaya MRT Line would make it easier for the public and patients to visit Hospital Kuala Lumpur, as the station is located next to the hospital is equipped with a 400m long walkalator. About 107 feeder buses will be provided to support the MRT2 service to encourage more people to travel on MRT. On the status of the MRT3, the ministry is waiting for the project approval and tender awards from the Ministry of Finance.

CAM RESOURCES IN RM6 MILLION LAND DEAL IN PERAK

The Star, 09/02/2023

CAM Resources via its wholly owned subsidiary, Central Palm Oil Mill Sdn Bhd, has purchased a plot of land worth RM6.1 million in Bidor Perak. The company intends to use the newly acquired asset for business expansion purposes in the future.

UEM SUNRISE’S KLCC LAND BUY FALLS THROUGH

The Edge Markets & EdgeProp, 09/02/2023

UEM Sunrise Bhd’s plan to buy a freehold land situated near the Kuala Lumpur Convention Centre (KLCC) has fallen through after conditions precedent under the sale and purchase agreement (SPA) were not fulfilled within the conditional period, which expired on February 7, 2023. The parcel of land measuring 6.39 acres is situated at Lot 228, Jalan Sultan Yahya Petra (formerly known as Jalan Semarak), which is approximately 2.5 km northeast of KLCC.

When UEM Sunrise first announced the proposed acquisition on Aug 4 last year, it said the total purchase price of RM384 million will be satisfied in cash of RM235.8 million and in-kind of RM148.25 million. The settlement via in-kind consideration involved Nipponkey entering into 16 disposal and land transfer agreements (DLTAs) with UEM Sunrise’s indirect wholly owned subsidiaries Nusajaya Rise Sdn Bhd (NRSB) and Symphony Hills Sdn Bhd (SHSB), the registered owners for 107.82 acres of land located in Tanjung Kupang, Johor, simultaneously with the execution of Lot 228 SPA. Among the 16 DLTAs, two between SHSB and Nipponkey were for the disposal and transfer of two Bumi plots of lands defined as “SHSB Bumi Lands”. These DLTAs have also lapsed on expiry date.

RESIDENSI SAKURA IS PUTRAJAYA HOLDINGS’ FIRST LAUNCH FOR 2023

The Sun, EdgeProp, The Edge Markets & Bernama, 09/02/2023

Putrajaya Holdings recently launched its Residensi Sakura project, a 463-unit residential highrise project in Precinct 11, Putrajaya. The developer offers an entry price starting from RM350,000. 50% of the units were snapped up during the soft launch recently. It features six floor plans with built-up sizes of 828 sq. ft., 957 sq. ft. and 2,120 sq. ft. (dual key).

AAX TARGETS 7 WEEKLY FLIGHTS TO BUSAN

NST & Bernama, 04/02/2023

AirAsia Aviation Group’s medium-haul affiliate airline, AirAsia X Bhd (AAX), plans to have 7 flights to Busan per week by the year-end from the current 3 direct flights weekly departing from Kuala Lumpur to Busan. It is targeted to bring more than 200,000 guests to and from Busan, much better than the pre-pandemic level in 2019. The inaugural flight departed from Kuala Lumpur International Airport (KLIA2) and landed at Gimhae International airport on 3rd of February 2023. In addition, several new destinations will be introduced by AAX, particularly in the North Asian region including major cities in China, South Korea and Japan.

EQUATORIAL PLAZA THE FIRST KL HOTEL TO GET GBI CERTIFICATION

The Sun, 07/02/2023

Equatorial Plaza is the first Kuala Lumpur hotel to receive the Green Building Index (GBI) Gold certification. It features high levels of passive design features and active design measures such as a highly efficient chiller plant, efficient lighting system, waste heat recovery system, wastewater treatment system, rainwater harvesting, and sustainable construction materials. The building is 55% more energy-efficient than the benchmark, reducing carbon emissions by an estimated 6.5 million KgCO2e per year. The design of the building includes an energy-efficient chiller plant system and lighting and generative lifts.

MEASURES TAKEN TO BOOST TOURISM PRODUCTS

The Edge Market, The Sun, 07/02/2023

The Malaysia Inbound Chinese Association (MICA) is promoting eight tourism products as part of its move to identify and explore market needs. It is said to be in support of the targeting 15.6 million tourist arrivals with RM47.6 billion in tourism receipts this year. This is demonstrated by the launch of the National Ecotourism Plan 2016-2025 with the slogan ‘Tourism Protects, Preserves and Conserves Nature, Culture and Heritage. MICA has already participated in a roadshow to Hong Kong and Taiwan organised by Tourism Malaysia and is ready to welcome five million tourists this year.

LAND CLEARING FOR ECRL DOES NOT INVOLVE DE-GAZETTEMENT OF FOREST RESERVES

The Star, NST, The Sun, Bernama & The Edge Markets, 07/02/2023

Malaysia Rail Link Sdn Bhd (MRL) claimed that the clearing of land for the East Coast Rail Link (ECRL) in Selangor does not involve de-gazetting of any forest reserve, including those in the Selangor State Park. MRL has obtained a right-of-way permit from the Forestry Department for its contractors to enter the forest reserve to carry out licensed activities related to ECRL. MRL was responding to recent claims by a non-governmental organisation (NGO) that it found land-clearing in four areas in the Selangor State Park. ECRL Railway scheme for Section C2 (Gombak-Serendah-Port Klang) was granted by the Transport Ministry to MRL on January 14 in 2022, after a three-month public inspection as per the statutory requirements of the Land Public Transport Act 2010. Approval was received by MRL from the Selangor government to proceed with the construction of ECRL Section C2 alignment.

CRESCENDO BUYS LAND IN JOHOR FOR RM68 MILLION

The Star & EdgeProp, 09/02/2023

Crescendo Corp Bhd (CCB) is acquiring three plots of land in Johor totalling 109.86 acres from Johor Land Bhd for RM67.55 million. The land is within the development known as Bandar Tiram and close to the existing development of the CCB group at Bandar Cemerlang which enables the group to further expand its landbank near the existing development.

CYPARK SIGNS MOU TO OPERATE SPECIALIST HOSPITAL IN JOHOR

The Edge Markets, 10/02/2023

Cypark Resources Bhd has entered into a memorandum of understanding (MOU) to build and operate a private hospital on a five-acre land belonging to Universiti Teknologi Malaysia (UTM) in Skudai, Johor. The renewable energy company signed the MOU with UTM’s wholly owned subsidiary UTM Holdings Sdn Bhd, and Selgate Healthcare Sdn Bhd — a unit of the Selangor State Development Corporation (PKNS). Under the MOU, Cypark and UTM Holdings will establish a joint venture company with Cypark holding 90% of the shares and UTM Holdings the remaining 10%. Selgate, meanwhile, will operate the hospital for a 30-year period and is responsible to obtain and maintain all required approvals from the Ministry of Health and other authorities for the licence to operate a private specialist hospital. In addition, Selgate would pay the lease to the joint venture company over a 30-year period, based on terms and conditions agreed by the parties.

KPKT TO PROVIDE RM16 MILLION FOR PUBLIC HOUSING MAINTENANCE IN PENANG

The Sun, 07/02/2023

The Housing and Local Government Development Ministry (KPKT) will provide RM16 million to the Penang government in 2023 for its public housing maintenance fund. That amount is to improve and repair damages in public flats such as roofs, water tanks, elevators, electrical maintenance and repainting.

KERJAYA PROSPEK CLINCHES SERI TANJUNG PINANG CONSTRUCTION

The Edge Market, 07/02/2023 & NST, The Star, The Sun, 08/02/2023

Kerjaya Prospek Group Bhd has accepted another contract for Seri Tanjung Pinang (STP) development in Penang worth RM398 million, for the construction of coastal protection structure. The contract involves Phases 2B and 2C of the STP reclamation project in Tanjung Tokong, Penang.

The job was awarded by Tanjung Pinang Development Sdn Bhd (TPD) an indirect subsidiary of Eastern & Oriental Bhd (E&O). TPD holds the concession rights to both phases of the STP reclamation project. The contract would commence on 10 April 2023, and be completed within 36 months. Kerjaya Prospek has accepted multiple contracts in the STP project in past years. This includes a 40 month contract worth RM154.4 million to build a temporary coastal protection structure for Phases 2B and 2C of the reclamation project, which was awarded in September 2020.

PENANG TOURISM SECTOR REBOUNDING

NST, The Sun & Bernama, 09/02/2023

Penang is seeing a swift recovery in its tourism sector with a sharp rise in direct international flights and arrival of passengers last year. The number of international direct flights had increased from 10 weekly flights in November 2021 to 184 weekly flights in December last year, an increase of 1,740%. The arrival of international passengers also rose from 7,367 for the year 2021 to 629,476 last year, making it a significant increase of 8,445%. The number of passengers movement at the Penang International Airport (PIA) for both arrival and departure of domestic and international passengers had grown by 681% in 2022 (4,242,997) compared to the year 2021 (543,519).

With the recent announcement of China reopening its international borders, it is certain that Penang would once again welcome the influx of tourists returning to the state. Penang is going to welcome the first direct flight from Guangzhou, China on 1st of March 2023.

GREATER KUCHING TO DEVELOP AREAS IN KUCHING, SAMARAHAN AND SERIAN

The Edge Markets, 07/02/2023

Sarawak state government had allocated a total of RM1.5 billion to develop Kuching, Samarahan and Serian, in line with the Greater Kuching development strategy, through the establishment of the Greater Kuching Development Agency. The RM1.5 billion are to develop all 3 areas mentioned in terms of the agriculture sector like smart agriculture, modern agriculture and the tourism sector. These areas will also be improved in terms of mobility where ART (autonomous rail transit) will be operating in.

PHASE TWO OF PAN BORNEO HIGHWAY TO START SOON

The Star, 07/02/2023

Construction work for the phase two of Pan Borneo Highway Sarawak project is taking off the ground by this year, linking Limbang and Lawas via Brunei Darusalam. Phase one of the project is reaching the tail end of completion. The 88 km road project, also known as Northern Coastal Highway, has already been agreed to by the Brunei government.

Besides the phase two Pan Borneo Sarawak project, also to be accelerated in its construction is the Sarawak-Sabah Link Road (SSLR) of which the phase one is currently being implemented. SSLR phase one is a 77km stretch from Simpang Gelugus to Long Lopeng in Lawas. The RM1.13 billion project was awarded to Samling Resources Sdn Bhd in 2021. Kimlun Corporation Bhd, via subsidiary Kimlun Sdn Bhd, was appointed as the main contractor for the construction and maintenance work of the proposed road scheduled to be completed by 2026.