KUALA LUMPUR, May 19 — United Overseas Bank (Malaysia) Bhd (UOB Malaysia) has projected approved investments in Malaysia to increase 13 per cent to RM185 billion in 2021, of which close to 40 per cent will be attributed to foreign direct investment (FDI).

"China, Europe and the United States (US) are expected to remain among the top sources of FDI, while capital is likely to be channelled mainly into the high-value-added sectors, including electrical and electronics (E&E), chemical, manufacturing and industrial,” it said in a statement today.

Managing director and country head of wholesale banking Ng Wei Wei said the bank believes that Malaysia’s diversified economic potential, strong fundamentals, accommodative policies and favourable demographics would continue to appeal to foreign companies looking to expand into the region.

"We believe that the reconfiguration of supply chains into Asean due to geopolitical uncertainties, including US-China trade tensions, would continue to be a catalyst for growth in key sectors such as industrial, consumer goods and telecommunications, media, and technology.

"The growth expectation is also supported by the global 5G network rollout that will boost the country’s E&E and electronics manufacturing sectors, and digital infrastructure,” she said.

In addition, Ng said with the government’s push to drive the country’s environmental, social and governance agenda, the bank saw a rise in interest for renewable energy-related projects, such as those in solar power.

"As the country makes the transition to renewable energy and enhances its infrastructure with cleaner sources of energy, it will attract more investments from multinationals looking to expand their operations in a sustainable manner,” she added.

The bank said Malaysia recorded RM164 billion in total approved investments in 2020, of which RM64.2 billion were from FDI sources in spite of the challenging economic environment due to the Covid-19 pandemic.

It said last year, China was Malaysia’s main source of FDI at RM18.1 billion, equivalent to a share of 28.2 per cent, while other contributors included Singapore at RM10 billion, the Netherlands (RM7.0 billion), and the US (RM4.3 billion). — Bernama