The investment environment in Malaysia this year is stable and improving:

• Malaysian M&A transaction volume increased by 87% in the past year
• Large technology companies such as Microsoft and Nvidia will invest billions of dollars to support Malaysia’s artificial intelligence industry
• FTSE Bursa Malaysia Composite Index (KLSE) has risen 12% this year
• The number of newly listed companies in Malaysia has increased by 35% year-on-year since this year

Malaysia has always been famous for its rich and diverse culture, abundant natural resources and strategic geographical location. In the past few years, Malaysia has made remarkable achievements. Despite the intricate developments and frequent fluctuations in the international situation, Malaysia's economic development and internal governance have been stable and orderly. There is no doubt that Malaysia has a good investment environment and attracts global investors.

M&A transaction volume surged in the past year

According to data from Bloomberg, Malaysia’s corporate M&A transaction volume has increased significantly by 87% in the past year, with the total transaction volume reaching US$8.3 billion. However, at the same time, overall M&A value in the Asia-Pacific region fell by 15%. Among them, the acquisition of Malaysia Airports Holdings Bhd (MAHB) by Global Infrastructure Partners (GIP) and Abu Dhabi Investment Authority (ADIA) for approximately US$2.6 billion is particularly eye-catching.

AI tech giant empowers Malaysia

Citibank said that many large clients have shown strong interest in investing in Malaysia, not only because of its abundant natural resources and labor resources, but also because of the rapid development of its technology industry. Major technology companies such as Google, Microsoft and NVIDIA have announced that they will invest billions of dollars to support research and development in artificial intelligence in Malaysia. This is due to the good investment environment that Malaysia has always created. In addition, the Malaysian government has pledged to provide at least RM25 billion to support the development of the semiconductor industry. It is worth noting that Malaysia has a developed education system, a high English penetration rate, and a good international communication environment. These together contribute to Malaysia's current good investment environment.

Excellent location is the key to Malaysia’s charm

Deutsche Bank believes that Malaysia is close to Singapore and has the resources required to operate a data center, such as water and electricity, and is expected to become a popular investment area in the next few years. At the same time, Malaysia is close to China and is favored by mainland Chinese companies. Malaysia and China have exempted each other’s citizens from travel visa requirements starting from December 1, 2023. The Malaysian government announced on November 26, 2023 that it would allow Chinese citizens to enter the country visa-free and stay for up to 30 days. Visitors to Malaysia are mainly Chinese, Singaporean and Indonesian citizens. Malaysia also provides visa-free entry to Indian nationals, who can stay for up to 30 days. In the first quarter of this year, Malaysia attracted RM83.7 billion in foreign investment, an annual growth rate of 13%. Southeast Asia's first transnational Special Economic Zone (SEZ), co-constructed with Singapore, is believed to further attract foreign investment. Companies from mainland China are actively expanding their businesses in Malaysia and looking for merger and acquisition opportunities, especially in areas such as high-end manufacturing, renewable energy and electric vehicle industries. As the world's second-largest palm oil producer, Malaysia is also home to large companies such as Petronas, Top Glove, Axiata Group Bhd. and sovereign wealth fund Khazanah Nasional Bhd. of headquarters.

The Malaysian stock market is full of vitality

Malaysia has always had a stable political situation and the stock market has performed strongly this year, which is conducive to investment. The FTSE Bursa Malaysia Composite Index (KLSE) has risen 12% this year, outpacing the MSCI Capital International Emerging Markets Index's 9.7% gain. The Malaysian government is actively promoting the improvement of advanced manufacturing and renewable energy production capacity. Although the global IPO market is not active, the number of newly listed companies in Malaysia this year increased by 35% year-on-year. In addition, CLSA said that Malaysian companies are keen to expand overseas through mergers and acquisitions in order to stand on the same starting line as international competitors and continue to look for future growth opportunities. It can be seen that Malaysia has considerable development potential and a good investment environment.

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