Country still an attractive investment destination
Hong Leong Investment Bank Research (HLIB Research) is optimistic Malaysia can negotiate a lower tariff level than the 25% announced by the White House effective before the Aug 1 deadline date.
However, it said even if the tariff rate was to remain at the current level, the country will remain an attractive investment destination among foreign investors despite Vietnam (20% tariffs) and Indonesia (19% tariffs) having successfully negotiated a lower tariff rate.
'The gaps are modest and we believe they unlikely to deter foreign investments meaningfully. Even if tariffs remain elevated, policy tools like tax incentives can cushion the impact, in our view,' the research house stated in a strategy report.
It added that Malaysia's corporate tax rate of 24%, versus 22% in Indonesia and 20% in Vietnam, has not historically hindered investments here due to the country's strong manufacturing base and supply chain links.
'We see these structural strengths will continue to make Malaysia an attractive destination under the global supply chain diversification or '+N' strategy,' HLIB Research stated.
The research house has a 2025 target of 1,640 points for the benchmark FBM KLCI, with the valuation based on a 14.5 times price-earnings multiple, adding there is ample liquidity on the sidelines which is deployed increasingly by buying on dips.
It however warned global markets are vulnerable to profit-taking and top-slicing activities, following the sharp rally after the announcement of US tariffs in April.
'Global equity prices have stayed relatively resilient, and overall market composure seems intact, which is arguably too calm.
'This prevailing stability may reflect a degree of complacency that suggest markets could be underpricing the risk of Trump following through with his latest tariff threats in August,' HLIB Research stated.
It added the muted reaction on global markets may inadvertently embolden US President Donald Trump to follow through with his high reciprocal tariffs as his confidence has been reinforced by several recent successes such as the over US$100bil in customs duties collected without significantly derailing the economy, and continued strength in US equity markets which are trading at record highs.
The research house however anticipates the equity market in the third quarter of this year (3Q25) to remain volatile due to macro and policy factors with 4Q25 likely becoming more calmer with any sharp drop in the market viewed as an opportunity to buy high beta stocks in particular.
HLIB Research forecast the 13MP, which will be tabled in Parliament by the end of this month, to propose RM440bil of development expenditure and to have a globalist stance underpinned by the Madani ethos with projects reinforcing national flagship policies like the National Energy Transition Roadmap, New Industrial Masterplan 2030 and the National Semiconductor Strategy.
This should provide leads for investors to pick stocks that can benefit from the 13MP plans.
HLIB Research top picks at present are stocks of companies like CIMB Group Holdings Bhd , Sunway Bhd , Gamuda Bhd , 99 Speed Mart Retail Holdings Bhd , AMMB Holdings Bhd , IOI Properties Group Bhd , Dialog Group Bhd and SMRT Holdings Bhd .
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malaysiakini
40 minutes ago
- Malaysiakini
Fadhli questions use of funds from govt-linked entities in 13MP
PARLIAMENT | PAS information chief Ahmad Fadhli Shaari questioned the inclusion of billions in funds from government-linked entities in the 13th Malaysia Plan (13MP), saying it paints a false picture of the government's fiscal abilities. The Pasir Mas MP said the sum - RM120 billion from government-linked companies (GLCs) and government-linked investment companies (GLICs) and another RM60 billion through public-private partnerships (PPPs) - was never included in previous national plans.
Focus Malaysia
an hour ago
- Focus Malaysia
What is so special about tourism investment zones?
LAST Thursday, Prime Minister Datuk Seri Anwar Ibrahim tabled in Parliament the 13th Malaysia Plan (13MP), with RM611 bil earmarked to be spent from 2026 to 2030. What caught my eye was the heading of a Bernama report 'Malaysia tourism growth under 13MP with new investment zones'. Those who have attended the Travel and Tours Enhancement Course (TTEC), rolled out after I have conducted the Training-Of-Trainers in February 2022, may be able to recall that one of the six transformation strategies in the National Tourism Policy of 2020-2030 is to create 'Special Tourism Investment Zones'. Undoubtedly, the many grand master plans unveiled by the federal government over the years have always been world-class, but not so when it comes to implementation and execution. By the end of this year, six years would have elapsed in the 11-year National Tourism Policy. And now, the narrative on STIZs seems to have shifted with the latest announcement that they will be established from next year, and four states have been identified viz. Negri Sembilan, Melaka, Johor and Sarawak for preserving heritage sites and enhancing rural homestays. According to Anwar, these zones will be the catalyst for new tourism products based on artistic, cultural, and heritage assets, as well as environmental areas like the Sungai Batu archeological site, the Lenggong Valley, and the Niah Caves which are recognised by UNESCO. He added that homestays will be upgraded to spur rural economies, aligning with Visit Malaysia 2026 preparations. Additionally, the Kuala Lumpur Heritage Initiative will restore landmarks such as the Sultan Abdul Samad Building and Merdeka Square, blending modernity with cultural preservation. When conducting TTEC from 2022 to 2024, I informed participants that special tourism investment zones have yet to be established. But their potential will be immense if modelled after free trade zones (FTZs), such as those in Sungai Way and Ulu Klang in Selangor. FTZs were created after a huge piece of land was allocated and many factories built. Before commencement of manufacturing, the entire area is fenced up and the customs will ensure that materials are brought in from entry points and goods sent out to exit points directly without duty. Hence, I imagined that new zones will be created for STIZs with incentives to attract substantial investments on new tourism goods and services. But from the recent announcement, STIZs will now be used as the banner to rehash, upgrade or revitalise existing tourism products. When STIZ was first proclaimed in 2019, four areas were identified for pilot projects, specifically in Langkawi, Putrajaya-Sepang, Port Dickson and Tuaran-Kota Belud. Incentives such as tax reduction, grants, and infrastructure development were still in the works. That year, Prime Minister Tun Dr Mahathir Mohamad spoke at the World Tourism Conference in Kuala Lumpur that the STIZ will focus on infrastructure and technology-based investments. The aim was to stimulate and develop new and alternative tourism areas and products. Since then, the STIZ has not progressed beyond vision and mission statements to pragmatic ideas and concrete actions. But the latest announcement has won praises from various tourism industry leaders, either afraid of offending the government or being left out in future dialogues. One of the most effective new ways to develop and promote international and domestic tourism is to set up one-stop centres in cities and major towns all over the country. These tourism centres are to assemble all the best local foods, goods and services under one roof, making each one a unique experience for visitors. They can be a massive shed using the ground floor only or multi-stories like shopping centres. Success is assured if they are professionally managed like commercial malls. But they will fail if operated like government-built food courts where vendors are given priority over customers. The foods, goods and services offered should not be limited to halal only as they must also cater to non-Muslim visitors. If such one-stop tourism centres offer a great variety of local specialities, visitors would be happy to spend many hours shopping, dining and being entertained. Since 2018, I have written numerous published articles on my concept of one-stop tourism centres. Essentially, they require the help of the federal, state and local governments to provide the land and facilitate, and the private sector to build and operate, efficiently and profitably. The catchy name of Special Tourism Investment Zone (STIZ) ought to be used for developing and offering new tourism products, such as one-stop centres, which can become a must-visit in every city and major town. STIZ should not be used to rebrand or hype up long existing products. ‒ Aug 4, 2025 YS Chan is master trainer for Mesra Malaysia and Travel and Tours Enhancement Course and an Asean Tourism Master Trainer. He is also a tourism and transport business consultant. The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia. Main image: Bernama
The Star
2 hours ago
- The Star
Cambodian and Thai officials meet in Malaysia; both countries are aiming to iron out ceasefire details
KUALA LUMPUR, Malaysia (AP): Thai and Cambodian officials met in Malaysia on Monday for the first round of cross-border committee talks since a tense ceasefire was brokered last week after five days of deadly armed border clashes that killed dozens and displaced over 260,000 people. The four-day General Border Committee meetings were initially due to be hosted by Cambodia, but both sides later agreed to a neutral venue in Malaysia, the annual chair of the Association of South-East Asian Nations (Asean), which has mediated the halt in hostilities last month. The July 28 ceasefire followed economic pressure from US President Donald Trump, who had warned the two warring nations that the U.S. would not conclude trade deals with them if the fighting persisted. Washington lowered tariffs on goods from the two countries from 36% to 19% on Aug. 1 following the truce. Monday's talks focused on ironing out details to avoid further clashes. Discussions of the decades-long competing territorial claims over the pockets of land near the shared border are not on the agenda. Thailand and Cambodia have been feuding neighbours for centuries, since both were mighty empires. In modern times, a 1962 ruling by the International Court of Justice awarding Cambodia the land on which the ancient Preah Vihear temple stands marked a new low point in relations, and other border territory remained claimed by both countries. Fighting erupted in 2011 at Preah Vihaer, after which the International Court of Justice in 2013 reaffirmed its earlier ruling, rankling Thailand. Relations deteriorated again sharply in May this year, when a Cambodian soldier was shot dead in a brief fracas in one of the disputed border zones, setting off diplomatic and trade sanctions, one against the other. Soon after two incidents last month in which Thai soldiers were wounded by land mines in disputed territory, for which Thailand blamed Cambodia, the two sides downgraded diplomatic relations and fighting broke out, each side blaming the other for starting the armed clashes. The talks this week will include finalizing details and scope of reference for an Asean monitoring team, Malaysian Chief of Defense Forces Gen. Mohamad Nizam Jaffar said Monday. Despite some reports of attacks after the ceasefire came into effect, Nizam said such incidents were typical spillover violence and both sides showed strong commitment during Monday's talks to uphold the ceasefire. The main session of the General Border Committee on Thursday will be led by Thai Deputy Defense Minister Gen. Natthaphon Nakpanit and Cambodian Deputy Prime Minister cum Defense Minister Tea Seih and include observers from Malaysia, the United States and China, officials said. Despite the truce, tensions have persisted as both countries organised tours of the former battle areas for foreign diplomats and other observers to highlight damage allegedly caused by the other side. The two countries also continue to accuse each other of having violated international humanitarian laws with attacks on civilians and the use of illegal weapons. - AP
