Mega Projects to Drive Malaysia’s Economy in Second Half of 2019

September 2019

Economist Lee Ju Ye from Maybank Kim Eng Group, a wholly-owned subsidiary of Maybank stated that Malaysia’s economic growth for the second half of 2019 will be positively driven by the continuation of mega projects such as the East Coast Rail Link (ECRL), the Klang Valley MRT 2 and the LRT 3 project, which may encourage long-term growth despite the current global uncertainties.

Malaysia’s current economic performance in the second quarter of 2019 has demonstrated solid growth, with its gross domestic product (GDP) rose to 4.9% that is higher than consensus estimates at 4. %. The country outperformed most of the other ASEAN countries which recorded a slowdown and the only one in the region to not have slashed the growth forecast. Lee opined that although there are downside risks due to the China-US trade tensions, Malaysia is expected to gain benefits from the investments and trade diversion with more international firms relocating operations to Malaysia.  It is also seeing an increasing foreign direct investment (FDI) approval at around 100% in 2018 and the first quarter of 2019.

Furthermore, Maybank Investment Bank Bhd’s chief executive officer Fad’l Mohamed said that mergers and acquisitions (M&A) activity will be another recurring theme for Malaysian corporates. This may include companies in the Property, Steel, Plantation and Technology sectors, as the down cycle in these sectors revealed long term investment opportunities. On the local equities, Fad’l observed that it may continue showing resilience based on the projected moderation of the global GDP growth and escalating China-US trade war.

(Sources: Malay Mail; New Straits Times; Property Guru)

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