Is Malaysia Future-Proofing Its Economy with Strategic Green and Digital Investments?
FAQ 220
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Malaysia’s economy grew about 5.1% in 2024, powered by strong domestic demand and record investment inflows. The central bank forecasts 4.5–5.5% growth in 2025 even as global trade wars and geopolitical tensions loom. In the first nine months of 2024, investment approvals hit RM254.7 billion (up 10.7% YoY) under MIDA’s initiatives, creating 159,347 jobs. This resilience reflects Malaysia’s push to diversify and upgrade its economy amid external uncertainties.
Key Sectors Driving Resilience
Digital & Tech Infrastructure: Malaysia is rapidly advancing its digital agenda, with digital-related investments hitting RM163.6 billion in 2024—over 3x the 2023 figure. The data center sector led the charge, drawing US$10.7 billion in commitments. Johor stands out as an emerging AI hub, attracting global tech giants thanks to its location and supportive policies..
Green Energy & Sustainability: Malaysia is accelerating its green energy push under the NETR and Budget 2025, aiming for 31% renewable energy by 2025 and 70% by 2050. Key focus areas include solar, bioenergy, EVs, hydrogen, and carbon capture. A major boost came in May 2025 with a US$10 billion deal with Saudi Arabia’s ACWA Power to develop 12.5 GW of renewables by 2040.
High-Tech Manufacturing: High-tech manufacturing—especially electronics and semiconductors—drives Malaysia’s exports, contributing 40% or RM575 billion in 2023. With 13% of global chip assembly and testing capacity, Malaysia benefits from a “China+1” advantage. Budget 2025 introduces new incentives to strengthen talent and investment in this critical sector.
Connectivity & Digital Economy: Malaysia’s digital push is backed by aggressive fiber-optic expansion, aiming to connect 250,000 new homes annually. With RM400–500 million in yearly capex, the focus is on last-mile FTTH rollout—crucial for both high-speed internet access and supporting 5G infrastructure.
Stocks to Watchout For
Tenaga Nasional Bhd’s Q1 2025 results illustrate its strong footing: revenue jumped to RM16.04 b (from RM13.64 b a year ago) and net profit was RM1.058 b (up from RM715.7 m). Roughly half of TNB’s sales now come from commercial and tech sectors (like data centers), tapping into Malaysia’s digital boom. TNB is also leading Malaysia’s green transition: under the NETR it is “in charge of developing solar parks and floating solar PV”.
The company is expanding overseas with solar projects (e.g. UK greenfield farms) and diversifying into gas/distribution. With about a 4% dividend yield and large government-linked ownership (EPF/Khazanah), TNB offers both stable cash flows and growth exposure. Its improving ESG profile (recently upgraded to MSCI “A”) and central role in Malaysia’s 2050 net-zero strategy make it a cornerstone pick for defensive growth.