KUALA LUMPUR: CIMB Economics Research believes the government is on track to achieve the private investment target of RM83 billion set for this year.
'In our view, the near-term outlook for Malaysia's private investment is probably brighter than generally appreciated although the policymakers still need to improve the investment climate,' it said on Monday, May 9.
CIMB Economics Research said the Economic Transformation Programme was gaining traction and would provide the much-needed impetus for private investment growth.
'Sustained private investment growth will provide a strong base to drive the pace of GDP expansion. Private investment's share of GDP will need to be raised from the current 10.7% to at least 15%. We maintain our GDP growth estimates of 5.5% this year and 6.0% for 2012,' it said.
The research house said as the domestic economy continues its steady recovery, manufacturing investment is setting an impressive pace in 1Q11 as investors are more upbeat. Total approved investments soared 111.1% on-year to RM12.2 billion in 1Q11.
Domestic investment value tripled to RM7.6 billion in 1Q (RM2.5 billion in 1Q10), raising its share of total investment to 62.1% from 38.5% in 4Q10. Foreign investment grew by 41.1% to RM4.6 billion, to account for 37.9% share of total investments in 1Q.
CIMB Economics Research said it was a broad-based investment, with basic metal products absorbing the largest share of 32.7% of total approved investment or RM4 billion in 1Q11. This was followed by transport equipment (RM3.1billion or 25.9% of total), electronics and electrical products (RM2.0 billion or 16.3%), food manufacturing (RM1.1billion or 8.9%) and fabricated metal products (RM559 million or 4.6%).
It said the major foreign investors were the United States (RM967.8 million or 21.0% of total foreign approvals), (ii) Singapore (RM853.4 million or 18.5%), (iii) South Korea (RM719.5 million or 15.6%), (iv) Japan (RM258.7 million or 5.6%); and Hong Kong (RM180 million or 3.9%).
The research house also said Malaysia's target to boost domestic investment share to around 50% of total manufacturing investment this year (38.4% in 2010), looked attainable, judging from the 1Q11 manufacturing approvals data.
It said positive initiatives announced in 2009-10 were expected to weigh favourably on business confidence and outlook. Besides that, the overall improvement in global FDI and consequently, higher FDI into Malaysia would also contribute positively towards private investment growth.
'As such, we now project higher manufacturing investment approvals of RM45 billion to RM50 billion this year, a revision from RM30 billion to RM35 billion previously,' it said.
'In our view, the near-term outlook for Malaysia's private investment is probably brighter than generally appreciated although the policymakers still need to improve the investment climate,' it said on Monday, May 9.
CIMB Economics Research said the Economic Transformation Programme was gaining traction and would provide the much-needed impetus for private investment growth.
'Sustained private investment growth will provide a strong base to drive the pace of GDP expansion. Private investment's share of GDP will need to be raised from the current 10.7% to at least 15%. We maintain our GDP growth estimates of 5.5% this year and 6.0% for 2012,' it said.
The research house said as the domestic economy continues its steady recovery, manufacturing investment is setting an impressive pace in 1Q11 as investors are more upbeat. Total approved investments soared 111.1% on-year to RM12.2 billion in 1Q11.
Domestic investment value tripled to RM7.6 billion in 1Q (RM2.5 billion in 1Q10), raising its share of total investment to 62.1% from 38.5% in 4Q10. Foreign investment grew by 41.1% to RM4.6 billion, to account for 37.9% share of total investments in 1Q.
CIMB Economics Research said it was a broad-based investment, with basic metal products absorbing the largest share of 32.7% of total approved investment or RM4 billion in 1Q11. This was followed by transport equipment (RM3.1billion or 25.9% of total), electronics and electrical products (RM2.0 billion or 16.3%), food manufacturing (RM1.1billion or 8.9%) and fabricated metal products (RM559 million or 4.6%).
It said the major foreign investors were the United States (RM967.8 million or 21.0% of total foreign approvals), (ii) Singapore (RM853.4 million or 18.5%), (iii) South Korea (RM719.5 million or 15.6%), (iv) Japan (RM258.7 million or 5.6%); and Hong Kong (RM180 million or 3.9%).
The research house also said Malaysia's target to boost domestic investment share to around 50% of total manufacturing investment this year (38.4% in 2010), looked attainable, judging from the 1Q11 manufacturing approvals data.
It said positive initiatives announced in 2009-10 were expected to weigh favourably on business confidence and outlook. Besides that, the overall improvement in global FDI and consequently, higher FDI into Malaysia would also contribute positively towards private investment growth.
'As such, we now project higher manufacturing investment approvals of RM45 billion to RM50 billion this year, a revision from RM30 billion to RM35 billion previously,' it said.
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