21/07/2025

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MONDAY | JULY 21, 2025

Market forces, not mandates, will decide future of JS-SEZ

PETALING JAYA: The long-term success of the Johor–Singapore Special Economic Zone (JS-SEZ) will depend on how well it aligns with real market demand and supports entrepreneurial innovation, according to Centre for Market Education CEO Dr Carmelo Ferlito. While tax incentives and strategic planning play a role, he cautioned that lasting economic development can only be driven by deeper, structural forces. “Incentives go in the right direction,” Ferlito said, referring to the JS-SEZ’s 5% corporate tax rate and 15% personal income tax rate for knowledge workers. “But ultimately, the economic structure needs to be strong on its own, not just a will-o’-the-wisp.” Jointly developed by Malaysia and Singapore, the SEZ aims to attract high-value investments and create between 20,000 and 100,000 skilled jobs over the next decade. But Ferlito argued that real job creation must come from entrepreneurial experimentation, not government forecasts. “It’s not about the talent base, which Malaysia already has in abundance. It’s about what the market needs,” he said. “Sustainable employment arises as a response to market signals, not planning. What the market demands can’t be predicted – it’s discovered through bottom-up entrepreneurial activity.” On the fiscal front, while the SEZ offers aggressive tax breaks to attract investment, Ferlito warned Ű BY DEEPALAKSHMI MANIKAM sunbiz@thesundaily.com Technology Bhd’s wholly owned subsidiary, Globetronics (KL) Sdn Bhd, has acquired a significant stake in Mpire Global Bhd for RM45.05 million. The investment involves acquiring 30.85% of Mpire’s ordinary shares and a substantial holding of Mpire warrants, positioning Globetronics as a strategic associate in Mpire. The acquisition aligns with Globetronics’s long-term transform ation strategy, offering promising prospects for value creation and sustainable earnings growth. “We view this acquisition in Mpire as a strategic opportunity that aligns perfectly with our commitment to sustained growth and diversi fication. “By securing this substantial equity interest, we are well positioned to participate actively in Mpire’s ongoing expansion and leverage potential synergies. “We anticipate this collaboration will create long-term shareholder value, reinforcing our position in the industry,“ a Globetronics spokes person said in a statement. Mpire and its subsidiaries pri marily operate in property cons truction and development, fleet management services which include the trading and leasing of motor vehicles, provision of integrated fleet manage-ment solutions, and related after-sales services and financing

o While tax incentives and strategic planning play role, ultimately, economic structure needs to be strong on its own: Centre for Market Education’s CEO

from productivity and competition. “Avoid intervention,” he advised. “Let productivity lead.” Reflecting on previous initiatives such as Iskandar Malaysia and the Sijori Growth Triangle, Ferlito said the JS-SEZ appears more coherent and better structured, but stressed that success still depends on the broader business environment. “It does look better designed and more organically structured,” he said. “But as I’ve mentioned, an SEZ cannot succeed in isolation. It needs to be supported by ease of doing business across the country.” On the potential role of Singa porean firms in the SEZ – particu larly in areas such as research and development, technology transfer and workforce development – Ferlito reiterated his core principle: let the market lead. “Let the market decide that,” he

against creating an isolated enclave that strays from national tax co herence. “A tax system needs to be simple and fair to be effective,” he said. “A special economic zone cannot function in isolation. For long-term sustainability, the broader tax en vironment must remain consistent nationwide.” He was also critical of govern ment attempts to steer investment into specific sectors, saying such industrial planning risks distorting the economy. “Yes,” he replied when asked if there’s a risk of inefficiency. “Investments should be driven by market signals, not government wish lists.” Ferlito further warned against artificially inflating wages through subsidies or interventions, noting that true income growth must come

Ferlito says Investments should be driven by market signals, not government wish lists.

proof its economy, Ferlito’s message is clear: it is the market – not mandates – that must determine the path forward.

said. “Economic order is an emer gent order.” As Malaysia seeks to integrate its economy across borders to future

Cautious optimism to set tone for ringgit this week

Globetronics acquires major stake in Mpire for RM45m PETALING JAYA: Globetronics

KUALA LUMPUR: The ringgit is expected to hover around RM4.24 to RM4.26 this week amid mixed signals in the market. This follows the anticipation of a potential meeting between US President Donald Trump and Chinese leader Xi Jinping, as well as the upcoming US Federal Open Market Committee (FOMC) meeting by the end of the month. SPI Asset Management mana ging partner Stephen Innes said the market is expected to adopt a tone of cautious optimism this week, as the potential Trump-Xi meeting could reset the US-China dialogue, lifting broader Asian sentiment. “For Malaysia, any thaw in trade tensions could brighten the macro outlook and, by extension, offer a floor to the ringgit in the near term. That diplomatic backdrop, however tentative, has helped curb more aggressive ringgit selling into the weekend,” he told Bernama. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the next FOMC meeting will be held on July 29 and 30, and therefore, market participants will be closely watching to see whether the US

Federal Reserve (Fed) will cut the Fed Fund Rate. “This week, there are not many data points to look at other than some comments from the Fed officials; thus, the market will be adopting a wait-and-see stance,” he added. Meanwhile, Kenanga Investment Bank Bhd said the ringgit remains supported by improving domestic fundamentals, rising foreign direct investment inflows and infra structure catalysts such as the resumption of the Mass Rapid Transit 3 project. “We expect US dollar-ringgit to range between RM4.23 and RM4.25 per US dollar in the near term,” it said in a note on Saturday. Last week, on a Friday-to-Friday basis, the ringgit ended better against the greenback, closing at 4.2410/2455 as compared with 4.2475/2525 previously. The local note also traded higher against a basket of major currencies. The ringgit appreciated vis-à-vis the Japanese yen to 2.8517/8549 from 2.8893/8929, and strengthened against the British pound to 5.6999/7060 from 5.7524/7592 last Friday. It also rose versus the euro to 4.9336/9388 from 4.9679/9737 at the end of last week.

The acquisition is expected to be earnings accretive for Globetronics, strengthening the group’s financial performance over the medium and long term. services, catering to both consumer and commercial segments.

market transactions, reflecting Globetronics’ strategic intent and proactive investment approach. There are no contingent liabilities or guarantees arising from the acqui sition, reinforcing the prudent financial management principles upheld by the group. Globetronics said that after conducting a comprehensive eva luation, it believes this investment is in the best interests of the group and its stakeholders, providing both strategic benefits and long-term financial returns.

The acquisition is expected to be earnings accretive for Globetronics, strengthening the group’s financial performance over the medium and the long term. Funded entirely with internally generated funds, the acquisition will not materially affect Globetronics’ capital structure or gearing position, thus ensuring continued financial stability. The acquisition was executed through both off-market and open