Malaysia attracts a number of our clients with its large, literate, young and largely urban population, which equates to a healthy labour market. Foreign workers and businesses are relatively safe as Malaysia has lower crime rates than most other emerging market economies in Asia. Companies also benefit from the country’s high quality transport network, with well connected ports via inland transport to major economic hubs and neighbouring countries.

Our coverage, using our unique Total Analysis model, ensures that our clients make sound, risk-assessed decisions in Malaysia. We keep our clients informed of the latest market moves and political developments, supported by our interactive data and forecasting. Clients also benefit from in-depth analysis of 23 of Malaysia’s most important industries, as part of our 'top-down' and 'bottom-up' perspective. We aim to keep you, as one of our clients, always one step ahead in Malaysia.

Country Risk

Malaysia Country Risk

BMI View:

Core Views

  • Malaysia's once-bloated current account surplus is coming under pressure from a combination of income account outflows and a dwindling trade surplus. We expect the narrowing of the surplus to continue, forecasting it to come in at 2.5% of GDP in 2014 and 1.6% in 2015. However, the risks are weighted to the downside, with the emergence of a current account deficit over the next few years increasingly likely.

  • Over recent years Malaysia's fiscal accounts have exhibited some worrying trends, with spending rising as a share of GDP, subsidy spending rising as a share of total spending, and indirect tax revenues declining. Going forward we are optimistic that these trends will be halted as subsidy spending is reduced and a Goods & Services Tax (GST) is implemented, which should help stabilise Malaysia's debt metrics and support private sector real GDP growth....

To read the full article Register for Free or Login

Malaysia Operational Risk Coverage (9)

Malaysia Operational Risk

BMI View:

BMI View: Malaysia benefits from an abundance of natural of resources, impressive economic growth rates and a reliable and extensive transport network. It also boasts some of the lowest trade costs and most efficient trade procedures in the world. Malaysia is therefore an attractive destination for investors and has established itself as one of the most low-risk, stable and cost-effective locations globally to conduct trade. BMI scores Malaysia an impressive 81.6 out of 100 in our Logistics Risk Index, ranking it first in the Asia region and fifth globally, well ahead of neighbouring countries Indonesia and Singapore, and outperforming regional powerhouses China, Japan and India. The stable nature of its political and trading environment,...

To read the full article Register for Free or Login

Malaysia Crime & Security

BMI View:

BMI considers Malaysia to be relatively safe for foreign workers and businesses, with lower crime rates, fewer threats from terrorism and less of a risk of interstate conflict than in two-thirds of the emerging market countries in the region. In particular, we highlight that Malaysia has a markedly lower impact from terrorist activity than most of its neighbours, including Thailand, Indonesia and the Philippines, while its involvement in the South China Sea disputes has been less confrontational than Vietnam and China. Malaysia is therefore ranked highly overall in the BMI Crime and Security Risk Index, in 10th place out of 30 countries in Asia with a score of 62.0 out of 100. BMI notes that the main risks to foreigners come from petty crimes and scams, and the potential spreading of terrorist activity over the borders from neighbouring states. The limited threat of international terrorist...

To read the full article Register for Free or Login

Malaysia Labour Market

BMI View:

Malaysia's labour force is characterised by a large, healthy and urbanised population, with reasonably good basic skills as well as a large number of specialised graduates. The domestic labour market therefore provides a wide variety of options for businesses. The workforce is also relatively unregulated, and trade unions have minimal influence. Nevertheless, BMI emphasises that the poor quality of education, combined with tough restrictions on the recruitment of foreign labour, means business will most likely have to provide extra training for local workers. Malaysia is ranked highly in the Asia region in terms of Labour Market Risk, in eighth place with a score of 62.5 out of 100.

The Malaysian labour market benefits from a high number of adults who have completed secondary and tertiary education, which means there are greater options for businesses looking to recruit skilled labour. The government is also investing...

To read the full article Register for Free or Login

Malaysia Logistics

BMI View:

Malaysia benefits from an abundance of natural of resources, impressive economic growth rates and a reliable and extensive transport network. It also boasts some of the lowest trade costs and most efficient trade procedures in the world. Malaysia is therefore an attractive destination for investors and has established itself as one of the most low-risk, stable and cost-effective locations globally to conduct trade. BMI scores Malaysia an impressive 80.5 out of 100 in the our Logistics Risk Index, ranking it second in the Asia region and third globally, well ahead of neighbouring countries Indonesia and Singapore, and outperforming regional powerhouses China, Japan and India. The stable nature of its political and trading environment, the inexpensiveness of fuel and the large-scale connectivity across the country has aided Malaysia in becoming one of the most competitive countries in the world in terms of trade.

...

To read the full article Register for Free or Login

Malaysia Trade & Investment

BMI View:

BMI considers Malaysia to be among the most attractive countries in the Asia region as a location for investment and a base of operations. Economic growth is set to slow in the medium term; however, the fundamentals are looking strong, and we expect a buoyant economy to drive trade flows and increase the attractiveness of the country as an investment location. This will be further supported by the fact that the government adopts a welcoming attitude towards foreign direct investment (FDI) into most sectors and has established policies that have lowered the burden of bureaucracy, protected ICT activity and intellectual property, and generally created a healthy business environment. Malaysia is therefore ranked highly in the Asia region in the BMI Trade and Investment Risk Index, in third place out of 30 in Asia, just behind Hong Kong and ahead of Taiwan. Its high score of 75.0 out of 100 also places it favourably on a...

To read the full article Register for Free or Login

Malaysia Industry Coverage (23)

Agribusiness

Malaysia Agribusiness

Autos

Malaysia Autos

BMI View:

Sales

We expect Malaysian auto sales to experience modest growth in 2015 as a subdued economic growth outlook weighs on private consumption. After growing by 1.6% in 2014 to 679,176 units, we forecast vehicle sales to rise by 1.9% in 2015 to 678,930 units.

Our Country Risk team expects economic headwinds to come to the fore in 2015 and forecasts real GDP to be 4.2%, which will be a notable slowdown from the estimated 5.8% GDP growth in 2014. The implementation of a 6.0% goods and services tax in April 2015, combined with the reduction of fuel subsidies will constrain domestic consumption as the prices of goods and fuel increase. Consequently, our CR team expects private consumption growth to slow to 3.0% in 2015 from 3.9% in 2014. Against this backdrop, we are forecasting passenger car sales to rise by a smaller clip of 1.8% in 2015 versus 2.0% in 2014.

While auto sales...

To read the full article Register for Free or Login

Commercial Banking

Malaysia Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

To read the full article Register for Free or Login

Consumer Electronics

Malaysia Consumer Electronics

Defence & Security

Malaysia Defence & Security

BMI View:

BMI View: Defence Spending in Malaysia will be ramped up in 2015, with a 10% budgetary increase announced in October 2014. We expect a slight increase in procurement activity while the majority of the development budget will be dedicated to expanding existing projects. The release of a new five year development plan and a review of Malaysia's defence offsetting programme could yield changes for the indigenous defence sector when unveiled in 2015. Malaysia enjoys peace and stability with regards to internal and external security threats. Key concerns include continued incursions by Filipino groups and rising piracy in regional waters.

We expect import volumes to grow in 2015 in line with the 10% year-on-year (y-o-y) defence budget increase, announced in October 2014, with development expenditure for 2015 set at USD1.0bn compared to USD0.8bn in 2014. The government has yet...

To read the full article Register for Free or Login

Food & Drink

Malaysia Food & Drink

BMI View:

BMI View: The Malaysian economy's strong real GDP growth during 2014, which we estimate reached 5.8% for the full-year, was driven by strong exports and increased domestic consumption. Proposed changes to the country's fuel subsidy scheme and the introduction in April 2015 of a 6% goods and services tax (GST) are likely to produce a slowdown in domestic consumption. However, these changes will have a positive impact on long-term fiscal discipline by reducing expenditure and increasing government revenue. BMI maintains its view that, across the forecast period, inflation should remain manageable and continued strong real GDP growth is...

To read the full article Register for Free or Login

Freight Transport

Malaysia Freight Transport

BMI View:

BMI View: We expect road freight will continue to dominate freight in Malaysia, although rail will benefit from increasing inter-regional trade and improving infrastructure and see the strongest growth over the medium term. Meanwhile, the highly developed air freight sector, profiting from Malaysia's role as a transhipment hub, will see little growth going forwards, as it is already mature and well established. Overall, the sector will benefit from the country's continued economic growth and lower oil prices, which...

To read the full article Register for Free or Login

Information Technology

Malaysia Information Technology

BMI View:

BMI View: Although Malaysian IT market is one of the most developed markets in the region, BMI believes that there is further scope for growth with the sector expanding an average of 7.1% until 2019. This is driven by a supportive economic environment and a government policy framework encouraging the development of the market. In the hardware market, rising incomes and increased access to affordable data connectivity, along with cuts to Windows licensing fees, will boost consumer and enterprise spending. Meanwhile, over the medium term, vendor innovation based on Intel's Haswell chips and Windows touch functionality will help vendors capitalise on the strong consumption story in Malaysia. In the enterprise software and services market growth will be also be robust as firms look to harness increasing volumes of data - as...

To read the full article Register for Free or Login

Infrastructure

Malaysia Infrastructure

Insurance

Malaysia Insurance

BMI View:

BMI View : Overall, by the end of the current forecast period in 2019, we expect to see healthy growth in Malaysia's insurance market, bolstered by domestic economic growth and improved awareness and understanding of insurance products in previously untapped markets. With penetration of non-life products particularly low, there is considerable scope for expansion of the market in Malaysia, and we expect to see foreign firms increasingly taking note of this potential, perhaps leading to a period of market consolidation through acquisition of the smaller domestic firms by well-capitalised international groups.

The outlook for Malaysia's insurance market in 2015 is mixed. Currency fluctuations mean that at present we expect to see a slight contraction in gross insurance premiums of around 2% in US dollar terms, while in local currency terms the outlook is...

To read the full article Register for Free or Login

Medical Devices

Malaysia Medical Devices

BMI View:

BMI Industry View: Malaysia's strategy of introducing business friendly policies and not least a new set of medical device regulations has seen it continue to attract multinational investment in manufacturing plants in the country. Whilst there has been some change, most local manufacturers tend to specialise in the manufacture of rubber-based consumables, which has resulted in a high reliance on imports. This being a factor, alongside continued investments in healthcare, the medical device market is set to expand at a solid 16.1% per annum.

Headline Industry Forecasts

  • In US dollar terms, the medical device market is projected to expand by a CAGR of 16.1%, which should...

To read the full article Register for Free or Login

Metals

Malaysia Metals

BMI View:

BMI View: Malaysia has a well developed metals sector and is a leading global producer of both steel and tin, However, local producers have been met with increasing pressure from other markets in recent years, with a sharp uptick in Chinese output levels, in particular, leading to downwards pressure on prices and hence production volumes. Out outlook for both the Malaysia steel and tin sectors is therefore one of caution with production growth expected to be moderate over the next few years.

2014 saw Malaysia's steel producers experience falling output and revenues as a flood of cheap imports squeeze prices and margins. With much of this extra supply arriving in the form of cheap products from countries such as China, Indonesia and South Korea, local producers have found themselves hit by falling orders for hot rolled coils as well as other heavily imported steel products...

To read the full article Register for Free or Login

Mining

Malaysia Mining

BMI View:

BMI View: Despite significant deposits of untapped minerals and positive reforms by the Malaysian government in recent years, Malaysia's mining sector is unlikely to witness a resource boom over our forecast period to 2018. Depleting reserves and falling ore grades will continue to impede growth in the tin sector, while falling gold prices remove the shine off investment in the gold mining industry.

We forecast Malaysia's mining industry to reach USD41.2bn by 2018, increasing at a clip of 5.0% per annum. Despite significant deposits of untapped minerals and positive reforms by the Malaysian government in recent years, a resource boom is unlikely to catch up with the country anytime soon. In contrast to the relentless pursuit of volume growth over the past decade, mining firms are focusing on the development of their core brownfield assets on the back of the economic...

To read the full article Register for Free or Login

Oil & Gas

Malaysia Oil & Gas

BMI View:

BMI View : A low oil price environment will hit short-term investment, particularly into exploration, and longer-term production prospects. Consumption, in contrast, will benefit slightly from lower prices.

Headline Forecasts (Malaysia 2013-2019)
2013 2014e 2015f 2016f 2017f ...

To read the full article Register for Free or Login

Petrochemicals

Malaysia Petrochemicals

BMI View:

Malaysia is set to end the decade with a major increase in petrochemicals capacity, but BMI's latest Malaysia Petrochemicals Report warns that new plants will be dependent on imported crude oil and be forced to compete with low-cost ethane-based US producers.

The focus of development will be Petronas' refinery and petrochemical integrated development (RAPID) project in Pengerang, which is likely to be completed in 2019. It is set to have around 300,000b/d of refinery capacity and over 7mn tonnes per annum (tpa) of petrochemicals capacity. RAPID has been delayed due to concerns over its economic viability due to rising costs and falling domestic crude oil volumes at a time when the US is planning to boost petrochemicals production using competitively priced ethane derived from shale.

Other Petronas projects include its joint venture (JV) with...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Malaysia Pharmaceuticals & Healthcare

BMI View:

BMI View: Commercial opportunities for private healthcare providers in Malaysia will be buoyed by the robust growth in the country's medical tourism industry. Driven by strong demand from Asia and the weakening currency, we highlight that this trend will also create revenue prospects for innovative pharmaceutical companies. However, the implementation of the Goods and Service Tax (GST) on April 1st poses a downside risk to our forecast as the government seeks to introduce price control measures on non-exempt high value medicines.

Headline Expenditure Projections

  • Pharmaceuticals: MYR7.22bn (USD2.21bn) in 2014 to MYR7.88bn (USD2.24bn) in 2015; +9.2 % in local currency and +1.5% in US dollar terms.

  • Healthcare: MYR43.82bn (USD13.39bn) in 2014 to MYR47....

To read the full article Register for Free or Login

Power

Malaysia Power

BMI View:

BMI View : The Malaysian power sector is set to grow at a slower rate in 2015 than in preceding years as we expect no thermal projects to be completed in that year. However, we expect sector growth to accelerate after 2015 as most of the major thermal projects being developed in Malaysia for completion after 2015 are on schedule.

We forecast electricity generation in Malaysia to grow by 3.6% in 2015. This growth rate marks a significant slowdown from previous years, with the five-year historical average growth for power generation at around 5.3%, according to our estimates. That said, we expect growth to pick up somewhat from 2016 onwards. We have maintained our long-term forecasts for electricity generation in Malaysia as the major projects we have incorporated into our predictions after 2015 remain on schedule. We forecast electricity generation in Malaysia to grow by...

To read the full article Register for Free or Login

Real Estate

Malaysia Real Estate

BMI View:

BMI View: Malaysia's commercial real estate market benefits from the country's location in South East Asia, as well as the government's welcoming attitude to foreign investment and the developed and fairly transparent nature of the business environment. The country has a developed real estate investment trust (REIT) market, although there is room for this to expand. Indeed over the medium term we see increasing interest in Malaysian commercial real estate from international investors, as well as increasing investment overseas by Malaysian firms.

Over the short and medium term we have some concerns about the Malaysian economy. Although we forecast a good rate of GDP growth, at 5.8%, in 2014, for the rest of our forecast period, to 2018, we see growth slowing to as little as 4.1% a year. Monetary tightening and potential interest rate rises could affect domestic demand, and with exports equating...

To read the full article Register for Free or Login

Retail

Malaysia Retail

BMI View:

BMI View: Malaysia's increasingly modernised retail market is well positioned to perform well over the coming five years and beyond owing to rising levels of disposable income and the spending habits of a young and urbanised population. The second quarter of 2015, however, will mark a transitional period for the country's retail landscape as the implementation of the Goods and Services Tax takes hold on April 1. This will negatively impact consumer spending at least until the second half of the year as consumers gradually adapt to new pricing levels.

Strong consumer confidence and domestic consumption...

To read the full article Register for Free or Login

Shipping

Malaysia Shipping

BMI View:

BMI View : Malaysia's main ports will see volume growth broadly in a 2-4% range this year, lagging slightly behind the growth of the wider economy. Port Klang and Port Tanjung Pelepas continue to benefit from expansion projects and developments that have been completed over the last two years.

We are maintaining our existing outlook for the Malaysian economy, which sees GDP growth decelerating from 5.8% in 2014 to 4.2% in 2015. This comes on the back of various factors. Data still coming through from last year shows exports performed particularly strongly, lifted by good demand for electronics and semi conductors. But going into H214, there were signs of weakening consumer demand caused by the combination of monetary tightening and high levels of household debt. Coming into 2015, the fall in international oil prices is an important external...

To read the full article Register for Free or Login

Telecommunications

Malaysia Telecommunications

BMI View:

BMI View:

Although the mobile penetration in Malaysia is high, BMI believes that there is still scope for growth. Strong competition between the operators on the telecommunications sector will erode ARPU, but value-added product offerings, such as data heavy bundles, will add buoyancy. Wireless and wireline non-voice services account for an increasingly large proportion of operators' revenues, and this is encouraging them to reinvest heavily in next-generation infrastructure, including fibre-to-the-home and 4G LTE. However, unlike at other relatively mature market, operators such as Digi , have managed to increase their subscriber base by bundling their data offers in with prepaid SIM-cards.

Key Data...

To read the full article Register for Free or Login

Tourism

Malaysia Tourism

BMI View:

BMI View: Malaysia's tourism market is in a strong position to take advantage of the solid growth trends in the wider Asia Pacific region. With a well-developed transport network in place and an extensive range of attractions across the country, Malaysia is attracting greater volumes of tourists, which in turn are leading to increased investment by leading global hotel groups. The government is highly supportive of the tourism industry, and a range of investment incentives will very likely encourage more developers to focus on Malaysia's potential in the coming years.

Malaysia's inbound tourism market is already substantial, benefiting from the...

To read the full article Register for Free or Login

Water

Malaysia Water

BMI View:

Overall, we hold a positive view of the country's water sector, which benefits from large volumes of available water and a moderately strong project pipeline, offering opportunities to infrastructure companies. However, supplies can vary from region to region, and this, in conjunction with an incoherent water management structure, can pose risks to water utilities companies, as can the high levels of water losses and non revenue water consumption.

As with many of its Asian peers, rapid urbanisation is creating environmental degradation as flooding, water pollution, sedimentation and squatters establish themselves along rivers. These issues are compromising the quality of drinking water supplies and are contributing to higher water shortage frequency. However, overall Malaysia offers large volumes of surface freshwater in most states, with good mains networks and a comparatively strong project pipeline offering advantages for...

To read the full article Register for Free or Login

Latest Malaysia Articles

Latest Malaysia Blogs

Latest Malaysia Podcasts

  • The Trans-Pacific Partnership is a proposed trade agreement which woul...

  • Several Asian countries are set to see their telecoms industries exper...

  • The increasingly important economic relationship between Asia and Sub-...