KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Malaysia is emerging as a frontrunner in attracting investments in the ASEAN semiconductor sector, thanks to its established supply chain, skilled workforce, abundant resources, and cost-effective business environment, according to Maybank Investment Bank Bhd (Maybank IB). The country's strategic positioning has led to a surge in investment commitments into its electrical and electronics (E&E) sector, with approved investments nearly tripling in 2023 compared to the previous year and soaring almost 20-fold year-over-year to $7.3 billion in the first quarter of 2024.
Key Takeaways:
Significant Growth in Semiconductor Investments: Malaysia's role in the global semiconductor landscape is growing, with substantial increases in investment commitments in the sector. The country benefits from its robust downstream capabilities in assembly, testing, and packaging (ATP), which make up 7% of the global ATP capacity, the largest share in ASEAN. Malaysia's and Vietnam's rising semiconductor export shares from 2015 to 2022 also highlight their success in attracting chip-making investments.
ASEAN's Strength in the Global Semiconductor Market: ASEAN is the largest semiconductor exporter globally, contributing 23% of global chip exports in 2022. Singapore (10.8%) and Malaysia (7.0%) are leading the region. The region's semiconductor sector is experiencing growth, driven by the global supply chain diversification away from North Asia due to geopolitical tensions and U.S. sanctions on China.
National Semiconductor Strategy and Future Outlook: Malaysia's government unveiled a National Semiconductor Strategy (NSS) in May 2024, supported by $5.3 billion (RM25 billion) in fiscal support and incentives. The NSS will unfold in three phases, aiming to attract RM500 billion in investments, establish at least 10 homegrown semiconductor companies with significant revenue, and develop a global R&D hub for semiconductors. Maybank IB anticipates that ASEAN's electronics sector will see strengthened growth in the second half of 2024 and into 2025, driven by rising demand for final electronics goods and diversified semiconductor applications.
Overall, Malaysia’s proactive policies, strategic positioning, and ongoing initiatives suggest continued leadership in the semiconductor sector, fostering long-term growth and attracting significant investments to the region.
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