JOHOR BAHRU, April 17 — The Johor-Singapore Special Economic Zone (JS-SEZ) can be a competitive advantage in attracting fresh foreign direct investment (FDI) in the region, especially as supply chains migrate south while also fast-tracking net-zero transition, Maybank Investment Bank (Maybank IB) said.

The investment bank said JS-SEZ could make it easier and more attractive for Singapore companies, multinational corporations (MNCs) and small and medium enterprises (SMEs) to invest in Johor while complementing and sharpening Singapore’s FDI competitiveness.

“Investors will have access to Singapore’s world-class financial centre and logistics infrastructure as well as Johor’s more affordable labour pool, abundant land and cheaper energy resources.

“For instance, median monthly wages in Johor were less than half that of Singapore in 2022, at US$1,563 (US$1=RM4.79), while the average electricity tariffs for businesses in Johor are around 40 per cent that of Singapore,” it said in a research note today.


It said JS-SEZ is believed to ultimately catalyse five equity investment themes that should impact multiple sectors across Singapore and Malaysia, including optimising hinterland access by easing people and goods movement and stimulating north-south supply chain shifts through access to capital, policy stability and infrastructure.

Maybank IB said other themes are fast-tracking net-zero transition through the development of green energy generation and transmission; expanding infrastructure and property development to cater to increased demand for housing, commercial, industrial and leisure facilities; and broadening the SME economy through increased demand for support services and goods as MNCs and trade flows shift.

It said the JS-SEZ could create a regionally differentiated value proposition through its combination of capital access, infrastructure and policy stability.


“Broad sector winners include banking, property and real estate investment trusts (REITs), industrials, renewables, technology and telecom,” it said.

It said banks are key given already entrenched cross-border positioning, enabling share gain from higher wholesale and retail credit demand and fees from trade, while increased infrastructure investments as well housing and commercial facilities demand could be a boon to Singapore and Malaysia property developers and REITs.

“Data centre establishment should be positive for Singapore and Malaysia’s telecommunication companies as well as electronics manufacturing players,” it said.

It said increased renewable capacity should spur Singapore’s industrial sector and Malaysia’s renewable energy sector, while easier travel could ease labour pressures and widen the mass market for Singapore’s gaming.

The investment bank said that backed by clear policy and strong execution, JS-SEZ has the potential to materially uplift economic value creation on both sides of the causeway.

“Integrating Singapore’s global financial and logistics capabilities with Johor Bahru’s access to competitive land, labour and renewable energy is a synergy multiplier,” it added.

JS-SEZ aims to strengthen economic connectivity by simplifying the movement of people, investments and goods across the Malaysia-Singapore border, as well as strengthening the business ecosystem to support investments.

The Johor state government has proposed for JS-SEZ to be located in Iskandar Malaysia, an economic growth corridor that spans 2,217 square kilometres across southern Johor, an area three times the size of Singapore, which includes Johor’s capital city, Johor Bahru, the heavy industrial city Pasir Gudang, Iskandar Puteri, Kulai, Sedenak and part of Pontian.