1. Iskandar Malaysia secures RM16.75b committed investments for 1H 2019
  2. Singapore a top spot for Hong Kong commercial property investors
  3. Hong Kong violence becoming more serious, but government in control: Carrie Lam
  4. Qatar Airways open to increasing stake in Cathay Pacific

Iskandar Malaysia secures RM16.75b committed investments for 1H 2019

Iskandar Malaysia has secured committed investments of RM16.75 billion for the first half of 2019, contributing to the RM302.09 billion total cumulative committed investments from 2006 to June 2019. Iskandar Regional Development Authority (IRDA) chief executive Datuk Ismail Ibrahim said the latest investment figure translated into an impressive compound annual growth rate (CAGR) of 9.7 per cent for the past five years. “The region recorded RM116.7 billion of foreign investment from 2006 to June 2019, of which 47 per cent come from the manufacturing sector and 53 per cent from the services and other sectors.” “China is the lead country in terms of foreign investment with RM40.65 billion worth of investment, followed by Singapore and the United States with an investment of RM20.57 billion and RM8.11 billion, respectively,” he said in a statement in Johor today.

Datuk Ismail said the manufacturing sector, comprising electrical and electronics (“E&E”), food and agro-processing, and petroleum and chemical products once again remained the leading sector and continued to be the backbone of the promoted sectors with a total cumulative committed investment of RM71.9 billion or 24 per cent of the total investment. The services sector contributed RM27.65 billion or 9.0 per cent to the total cumulative committed investment in Iskandar Malaysia with a CAGR of 13.12 per cent for five years. “Logistics is the leading sector with RM8.56 billion cumulative committed investment followed by tourism at RM7.86 billion and healthcare at RM4.41 billion,” he added. Datuk Ismail added that social development and inclusiveness have become more important to the government, especially with the “Shared Prosperity 2030” economic model, that issues such as Technical and Vocational Education and Training and financial literacy were also discussed at a recent meeting.

According to IRDA, more than 300,000 people cross the Johor-Singapore Causeway every day and by having better connectivity that reduces traffic congestion, it could help increase investments from Singapore, quality of local talents, opportunities for local SMEs, and the number of ‘higher spending’ tourists, besides enhance safety and security.

Datuk Ismail said the Iskandar Malaysia Bus Rapid Transit is another important project reflecting the region’s shared prosperity effort. “Reaching 90 per cent of the area in Iskandar Malaysia, once completed, this public transportation system will not only address the issue of connectivity but also support towards improved quality of living and managing cost of living,” he added.

Singapore a top spot for Hong Kong commercial property investors

Hong Kong investors ploughed US$1.4 billion into the Republic’s commercial property market in the first of 2019 — making it the top destination for these investors. A report by real estate services firm Cushman and Wakefield said the investments into the United States and the United Kingdom, which are traditionally favoured by Hong Kong investors, have “remained quiet” as trade friction and the uncertainty over Brexit wears on those countries. It added that the unrest in Hong Kong has also seen increased interest among commercial property investors there in putting their money in Singapore.

Christine Li, head of research in Singapore and South-east Asia at Cushman and Wakefield, noted that some of the Hong Kong investors and funds have been in Singapore for some time. “But the advent of the political situation in Hong Kong has coincided with more high-net-worth-individuals and family offices from Hong Kong enquiring on potential purchases,” she said. James Shepherd, Cushman and Wakefield’s Asia-Pacific research head, added that in the eyes of Hong Kong investors, Singapore “may increasingly be viewed as a comparatively safe haven given the challenges some other global destinations are facing”. In Singapore, the value of transactions by Hong Kong investors in the Republic’s commercial real estate grew, totalling US$3 billion this year to date, said the Cushman and Wakefield report.

Property analyst Ong Kah Seng said that these investments are unlikely to be short-term substitutes that arose from the social unrest in Hong Kong, because such an investment approach “will never work out”. “High-end and savvy property investors, especially those from Hong Kong, would have done their strategic sums and increasingly prefer Singapore properties,” said Ong. The difference now is that “this critical period stimulates their investment decision”, notwithstanding the significant levies required for foreigners buying Singapore residential property, Ong added.

In Hong Kong, Chief Executive Carrie Lam said the violence in Hong Kong is becoming more serious, but the government in control. She was speaking in public for the first time since demonstrations escalated on Sunday, when police fired a water cannon and volleys of tear gas in running battles with protesters who threw bricks and petrol bombs. Ms. Lam added that she was confident the city’s government could handle the unrest by itself and she would not give up on building a platform for dialogue, adding that Hong Kong should prepare for “reconciliation in society by communicating with different people”. But she said the time was not right to set up an independent inquiry into the crisis, one of the cornerstone demands of protesters. More demonstrations are planned over coming days and weeks,

Qatar Airways open to increasing stake in Cathay Pacific

Qatar Airways said it is open to increasing its stake in Hong Kong’s flagship carrier Cathay Pacific. Qatar Airways is a strategic investor in Cathay Pacific, having in 2017 purchased a 9.6 per cent stake in the airline from Hong Kong-based Kingboard Chemical Holdings Ltd and related companies for HK$5.16 billion (US$ 662 million). Cathay Pacific has seen its flight operations disrupted of late, due to the ongoing protests on the former British colony. Flights were also cancelled due to a sit-in protest at the Hong Kong airport. Qatar Airways Group chief executive, Akbar Al Baker said the purchase of the initial stake in Cathay Pacific supported Qatar Airways’ investment strategy and was optimistic the Hong Kong and Chinese governments would resolve the current situation soon. “I am confident that Cathay Pacific will expand as Hong Kong is a gateway to China,” he said on the sidelines of the launch of Qatar Airways flights to Langkawi in Malaysia today. The three major shareholders of Cathay Pacific, besides Qatar Airways, are Swire Pacific and Air China. Cathay Pacific is the world’s 10th largest airline in terms of sales and 14th for market capitalisation.

 

 

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