By INS Contributors

KUALA LUMPUR, Malaysia: The economies of South and Southeast Asia, including Malaysia, have emerged as unexpected investment hotspots, driven by various factors, including robust Gross Domestic Product (GDP) growth, favorable inflation rates, and a thriving stock market.

 Research firm Octa stated that Malaysia is among the countries offering promising investment opportunities for investors looking to capitalize on the region’s economic momentum.

 It noted that GDP growth surged to 5.9 percent in the second quarter of 2024, a significant increase from 4.2 percent in the previous quarter.

 Additionally, the firm highlighted that exports of goods and services rose to 8.4 percent compared to 5.2 percent in the first quarter of 2024. However, the headline inflation rate increased to 1.9 percent in the second quarter, up from 1.7 percent in the first quarter of 2024, but it remained relatively low overall.

 “Although some key economic institutions are hinting at increasingly open investment opportunities, some investors still underestimate the investment prospects in this region,” the firm stated in a research note today.

 Octa mentioned that Bank Negara Malaysia (BNM), through the Monetary Policy Committee (MPC), maintained the Overnight Policy Rate (OPR) at 3.00 percent and indicated that exports are expected to continue rising, supported by the global high-tech cycle given Malaysia’s position in the semiconductor supply chain.

 “This is a critical factor as demand for semiconductors grows strongly, according to a recent report by the Semiconductor Industry Association,” it added.

 As of now, the KLCI has increased by 15.16 percent in 2024, while in August 2024, it recorded consecutive gains over several days. Companies contributing positively to the KLCI index include Public Bank Bhd and Malayan Banking Bhd, both from the financial services sector, and Tenaga Nasional Bhd (TNB) from the utilities sector.

 Overall, the research firm stated that South and Southeast Asia are expected to continue being the fastest-growing regions in the world for the next two years, with growth projected at 6.1 percent in 2025.

 However, the region is also tied to agricultural output and may be vulnerable to trade disruptions and commodity price shocks.

 “Rising geopolitical tensions, such as the Gaza-Israel conflict or the war in Ukraine, could lead to spikes in commodity prices,” it added.