Japanese Corporates May Be Looking At Malaysia As Operations Hub: Analyst

KUALA LUMPUR, (Bernama) -- Japanese corporations may be looking at Malaysia, among other Southeast Asian countries, as a hub for their operations in certain sectors moving forward, an expert said.

Oxford Business Group's Regional Editor (Asia) Paulius Kuncinas said for Malaysia, he would expect more merger and acquisition (M&A) activities and re-investment as opposed to green field investment.

"On which sector they would invest, I think it would depend much on how they hold the Asean agenda moving forward.

"We could well see more banks and financial institutions, we could also see more investment, certainly in infrastructure and a little in Electrical and Electronics (E&E), the ICT sector, and also in hospitality and tourism," he told Bernama on the sidelines of the CIMB Annual Asia Pacific Conference.

He said the Japanese corporate groups already have access to cheaper, low-cost capital, and they looking for higher yields in the market that they understand, which is the Southeast Asia growth market.

"The Japanese investors are also currently looking at green field investment, and the easiest class of that type of investment are property or development projects.

"Also, there is quite an appetite for consumer-related sectors, such as fast-moving consumer goods (FMCG), electronics and anything to do with it, consumer food processing, agro-business and also commodity-related sectors," he said.

Kuncinas, a speaker at a session entitled "Abenomics - Intended & Unintended Consequences for Asean", said Myanmar is one of the "hot" investment destinations in Southeast Asia for Japanese green field investment.

The other top investment market in this area at the moment, due to the very huge growth in demand and consumption, is Indonesia, where a lot of Japanese investors are moving into automotive and spare parts sectors.

"Indonesia has become the new hub for automotive producers in the whole of Asia, it's mimicking what happened to Thailand 20 years ago.

"And we are also seeing a lot of interest in the Philipines, which has been outperforming, growing around seven per cent recently, but the focus there is more on retail, properties and hospitality sectors," he added.

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