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TAPiO Newsletter – January 2020 Issue
Foreign investors still have interest in Malaysia: MIDF
Although there is an increasing focus on other asset classes particularly the bond market, foreign investors still have interest in Malaysia. In November 2019, foreigners flocked into the bond market to the tune of RM8.1 billion. MIDF Amanah Investment Bank Bhd Research (MIDF Research) said international funds sold RM11.4 billion worth of Malaysian equities in 2019, although it was much less compared with the more than RM15 billion foreign net outflow seen in 2015 and Malaysia remains as the country with the largest outflow amongst ASEAN markets. According to MIDF Research, international investors accumulated US$23.65 billion worth of local equities in the seven Asian markets that it tracks (South Korea, Taiwan, India, the Philippines, Thailand, Indonesia, Malaysia), the second-highest in the past five years (from 2015 to 2019). MIDF Research stated that the FTSE Bursa Malaysia KLCI (FBM KLCI) might see its valuation tapering towards the lower end of its historical range under the circumstances that a baseline scenario in which the US-China trade dispute fails to achieve full closure and the East Asian region continues to be beset by the relative lack of liquidity-induced macro reflationary prospects.
iRobot begins manufacturing operations in Malaysia
iRobot, a maker of consumer robots which is one of the popular robotic vacuum cleaner, has officially started production in Malaysia ahead of schedule. A manufacturing solutions working with Jabil Inc. iRobot has expanded its manufacturing capabilities into Malaysia as part of its strategic supply chain diversification initiative. Colin Angle, chairman and CEO at iRobot stated that establishing manufacturing operations in Malaysiais a fundamental component in our initiative to diversify iRobot’s manufacturing and supply chain capabilities, while also mitigating their exposure to current and prospective tariffs on products that are imported from China. He also believe that their investment to establish manufacturing operations in Malaysia will serve well as the global demand for home cleaning robots across multiple categories continues to grow. iRobot is now producing limited quantities of one Roomba 600 Series model in Malaysia but plans to accelerate volume production for this model beginning in the first quarter of 2020.
12th Malaysia Plan to crystallise SPV2030 implementation
The 12th Malaysia Plan (12MP) will further develop the implementation of the Shared Prosperity Vision 2030 (SPV2030) which a new initiative is providing a 10-year development roadmap and framework for the country’s economic restructuring to benefit all Malaysians. Measures and courses of action to achieve the SPV2030 goals would be incorporated in the 12MP, which is expected to be tabled to the parliament in the third quarter of this year. Adviser to the Economic Affairs Minister, emphasised that the SPV2030 is a needs-based one aimed at narrowing the economic gap in the context of income irrespective of race. He added that SPV2030 is a rehash of the NEP, with a similar focus on race-based Bumiputera policies, is a misunderstanding. The Minister of Economic Affairs stated that the ministry had conducted 390 engagement sessions with various parties for the plan. He highlighted that 2019 was a productive year for the MEA towards building a strong foundation for implementing the national development agenda to formulate a policy that gives the optimum effect.
TNB’s second large scale solar project ready next year
Tenaga Nasional Bhd’s (TNB) second Large Scale Solar (LSS) project, located in Bukit Selambau, Kedah, is on track for completion before the end of 2020, as over 84 percent of the project has been completed to-date. The RM180 million project involves the installation of 134,880 solar photovoltaic (PV) panels, capable of generating up to 30 megawatts (MW). The project is developed by TNB Bukit Selambau Solar Sdn Bhd and was launched in March 2019. During its construction, the project’s spillover effect on the surrounding areas includes the creation of about 250 jobs in various capacities. TNB is also installing solar panels on the rooftops of the educational institution and government buildings, as well as residential, industrial and commercial properties and has managed to secure approximately 26-megawatt peak (MWp) generation capacity through more than 100 projects. With the LSS, solar PV installations on rooftops and other renewable energy (RE) projects, TNB aims to generate up to 1,700MW from RE by 2025. These RE initiatives are in line with the government’s target of having 20 per cent of the country’s electricity generated from renewable sources by 2025.
Menteri Besar Kedah Datuk Seri Mukhriz Tun Dr Mahathir stated that Kedah recorded revenue of RM726.89 million in 2019, surpassing the target of RM710 million set by the State Government in 2019. He added the biggest contributor to the State’s revenue last year was land-related revenue while one part of the special aid given by the Federal Government was included in the total revenue. The Federal Government had given a special aid of RM200 million, out of which RM150 million was included as State revenue, while the remaining RM50 million was put into the State Government’s trust account. The revenue collection surpassed that achieved in 2018 which amounted to RM559.12 million. He mentioned the other contributors to the State revenue were from the districts, timber revenue and various other activities including the Federal Government special aid. Mukhriz also said the State Government spent some RM214.3 million out of the allocation under the Malaysian Road Records Information System (Marris) for road maintenance throughout the State.
International company has chosen to draw up a master plan for Kulim International Airport-MB Kedah
Menteri Besar Datuk Seri Mukhriz Mahathir mentioned that the Kedah state government has awarded an international company, the contract to draw up a development master plan for the Kulim International Airport (KXP). The contract awarding process had gone through a complete evaluation and had taken a rather long timeto ensure transparency and the government will make an official announcement on the awarding of the contract for the master plan for KXP. Mukhriz said initial works on the land to build the KXP had not started as currently, the state government was still at the land acquisition stage. Mukhriz before had mentioned the state government hoped that KXP could operate by 2024 to meet the cargo and logistic needs, particularly in Kulim and Penang.
China, Malaysia to develop 1st next-generation vehicle hub in Southeast Asia
Malaysian government agency stated that the country is collaborating with China companies and organizations to develop the first next-generation vehicle (NxGV) hub in the Southeast Asian region. The Malaysia Automotive, Robotics and IoT Institute (MARii), an agency under Malaysian International Trade and Industry stated that the institute had signed memoranda of understanding (MoUs) with China Automotive Technology and Research Center (CATARC), Malaysian conglomerate DRB-HICOM and the country’s national car maker Proton, on a cooperation that adds new value dimensions to the development of NxGV hub within Malaysia and the region. The MoUs focus on the development of NxGV testing facilities in Malaysia. The MoU between MARii and CATARC was inked to enhance domestic capabilities in the development and testing of NxGVs within the Association of Southeast Asian Nations (ASEAN) region. As for the MoU between Proton and CATARC, it will potentially enable the Malaysian car company to collaborate with and leverage on the latter’s research and development facilities, especially in the areas of testing related activities.