KUALA LUMPUR (April 30): Special economic zone Labuan International Business and Financial Centre (IBFC) expects a slowdown in leasing and international trading in 2025, due to rising global economic uncertainty and falling oil and gas prices.
At the Labuan IBFC Market Report 2024 launch on Wednesday, Labuan Financial Services Authority (FSA) director general Nik Mohamed Din Nik Musa said demand for oil and gas shipping and asset use may decline, which will affect both trading and leasing. Labuan FSA oversees Labuan IBFC.
He said since leasing is closely tied to oil prices, a drop in prices could reduce demand.
Nik Mohamed Din also noted that the Labuan International Trading Company (LITC) segment — where 99% of trade is oil and gas-related — may see fewer transactions due to the same pressures.
These two sectors are expected to be the most affected by current global trade tensions and energy price fluctuations.
Nik Mohamed Din said despite a possible short-term slowdown in oil-related sectors, Labuan IBFC remains confident in long-term growth, focusing on areas like digital assets and captive insurance.
Labuan IBFC’s leasing sector had a strong year in 2024. Eight new leasing companies were licensed, and 98 transactions were approved.
Leased assets reached US$36.8 billion, with aviation making up US$22.8 billion (62.1%).
Leasing revenue rose 69.3% to US$1.6 billion, and profit before tax jumped 152.3% to US$654.6 million, mainly due to higher lease income.
Most revenue (87%) came from the Asia-Pacific region, with the rest from the US, Europe, Middle East, Africa, and the Far East.
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