KUALA LUMPUR (July 19): Close to half of Asean companies’ senior executives see Malaysia as a favoured expansion destination for growth opportunities in the 10-nation bloc, said Standard Chartered today.

According to a survey commissioned by Standard Chartered for its Borderless Business: Intra-Asean Corridor, 49% of survey respondents comprising senior executives of surveyed Asean companies, selected Malaysia as one of the countries offering the best expansion opportunities in Asean over the next 12 months.

Borderless Business: Intra-Asean Corridor is a strategic report that explores high-potential opportunities for cross-border growth within the region. 

“The report also cites automotive, healthcare and digital services as key growth sectors for Malaysia. The country has started making headway in developing capabilities to spur growth both in the electrical vehicles segment and data centre supply. 

“Malaysia is also seen as a leading medical device manufacturing hub and a regional market leader in medical tourism,” it added.

Standard Chartered said that overall, the majority of Asean companies focusing on intra-regional opportunities expect robust business growth in the region over the next 12 months, with 99% of respondents expecting growth in production and 96% anticipating growth in revenue.

“Access to the large and growing Asean consumer market (69%), access to a global market enabled by a network of Free Trade Agreements (59%) and availability of abundant and skilled workforce (49%) were among the most important drivers for expansion across the region according to the senior executives of the surveyed Asean companies,” it said.

It said that with the Regional Comprehensive Economic Partnership (RCEP) expected to attract more investments into Asean, all respondents said they are planning to increase their investments over the next three to five years.

“Within Asean, Malaysia is a major hub for investments, being the third-largest source for intra-Asean foreign direct investment (FDI) in 2019,” it noted.

However, it added that the survey also shows that companies recognised a wide range of risks in the region, of which the top three identified are the Covid-19 pandemic or other health crises (75%), geopolitical uncertainty and trade conflicts (60%), and the slow revival of the economy and the drop in consumer spending (49%).

In terms of mitigating these risks and challenges, respondents identified entering partnerships or joint ventures to increase market presence (53%), driving sustainability and environment, social and governance (ESG) initiatives (53%) and executing digital transformation programmes (52%) as the most important areas for companies to focus on. 

Standard Chartered client coverage, Asia, corporate, commercial and institutional banking regional co-head Heidi Toribio said Asean is core to the international bank’s business strategy.

“As the only international bank with full presence in all 10 markets in the region, we believe we play a critical role in enabling our clients to seamlessly trade and invest across the 10-nation bloc. 

“The findings of this report clearly validate the trends we are observing among our clients and we continue to invest in our capabilities to meet their evolving needs,” she added.