Malaysia is still a leading destination for investors
ACCORDING to the World Investment Report 2012 published by the United Nations Conference on Trade and Development (Unctad), Malaysia is the third favourite foreign direct investment (FDI) destination in Asean and the fifth in Asia. The country also ranked 10th in the AT Kearney 2012 FDI Confidence Index. In the words of Unctad's investment and enterprises chief, Prof Hafiz Mirza, Malaysia is a "place of strength, the country to come to" and "an excellent place to be". Based on the number of enquiries, applications and approvals, International Trade and Industry Minister Datuk Seri Mustapa Mohamed is counting on this year's FDI to exceed last year's record inflow of US$11.97 billion (RM38 billion). This achievement is all the more remarkable considering that barely two years ago, things appeared to be bleak. Then, when Unctad presented its annual report for 2010, Malaysia's FDI had plunged 81 per cent from US$7.17 billion in 2008 to US$1.49 billion in 2009, the biggest decline compared with our regional peers, and the country was nowhere near the top 10 FDI destinations. Now, in Hafiz's assessment, together with the top two, Singapore and Indonesia, and fourth-placed Thailand, Malaysia was among "the front-liners in Asean with no one else in the region coming close".
Malaysia also looks set to be Asia's top initial public offering (IPO) market this year. When IHH Healthcare Berhad lists later this month, it will be the third-biggest IPO in the world after Facebook and Felda Global Ventures Holdings. The shares of Asia's biggest hospital operator, nearly two-thirds of which have been signed up by 22 cornerstone investors, including the Kuwait Investment Authority, have been oversubscribed by as much as 60 times. At a time when companies elsewhere are shelving plans to list following Facebook's flop, and Europe's debt crisis continues to weigh heavily on investor sentiment, the significance of this confidence in the Malaysian equity market cannot be stressed enough. Neither can the import of the accomplishment of the consortium of Sime Darby, SP Setia and Employees Provident Fund in outbidding Chelsea, owned by Russian billionaire Roman Abramovich, and 15 other interested investors from around the world for London's landmark Battersea power station.
However, though our companies have demonstrated their prowess abroad, our IPOs have bucked the trend and our FDIs have exceeded Unctad's "contribution index", there is no room for complacency. As financial flows are volatile, investor sentiment fragile and the competition for FDIs stiff, there is a need to ensure that Malaysia remains competitive on the world stage and a country of choice for international trade and investment.