‘Data, power to drive next investment cycle’

KUCHING (Nov 28): Malaysia’s next investment cycle will be driven by data, power and renewable energy, supported by rising foreign direct investment (FDI) trends in Asean and the country’s strengthening role in the global semiconductor ecosystem.

Areca Capital chief investment officer Ch’ng Cheng Siew noted that Asean’s consumer base is expanding rapidly, with a population of 700 million and more than half classified as middle-class consumers.

“This means that going forward, the consumption growth will come mainly from Asia and Asean,” she said during the private wealth management company’s investor dinner themed “US–China Trade War: What’s Next After the Pause?” held here on Thursday.

She highlighted that Asean recorded an 8 per cent increase in FDI despite an 11 per cent contraction in global flows, underscoring the region’s resilience.

In Malaysia, she pointed out that semiconductors and automotive manufacturing remained the top sectors attracting investment.

“Malaysia is the second-largest semiconductor exporter, and its growth over the past few years has reached 79 per cent, outperforming the global average of 59 per cent,” she added.

Ch’ng also maintained a constructive outlook on the domestic market, pointing out that while headline index earnings may not reflect as such, many companies listed on Bursa Malaysia in the semiconductors, construction, data centres and consumer sectors are posting high double-digit earnings growth.

She added that Sarawak-based players also stand to benefit from national development priorities following the increased state allocation to RM6 billion from RM2.9 billion in 2022.

Touching on investment opportunities in 2026, Ch’ng pointed to several key themes, the first being the semiconductor sector as the government aims to double E&E exports from RM500 billion to RM1 trillion in five years.

She added that tourism, supported by rising arrivals in Kuching and Kota Kinabalu, is expected to rebound strongly as Malaysia aims to attract 35 million visitors next year.

Construction, especially in data-centre-related infrastructure, is also gaining momentum, she said.

Ch’ng further stressed that the the energy sector will also be central to the coming investment cycle, especially with the global rush into artificial intelligence.

“If you talk about AI, no energy means no AI,” she said, citing projections that data-centre energy consumption in the US could rise 25 per cent by year-end and triple within five years.

Global capital expenditure for data-centre energy infrastructure is also expected to double to US$90 billion over the next five years.

She added that the Asean Power Grid remains on the regional agenda, though challenges remain, while solar capacity is projected to expand 17-fold by 2050.