5 key sectors set to benefit from the Johor-Singapore SEZ deal

The agreement aims to attract 100 projects over the next decade.

The Johor-Singapore Special Economic Zone (SEZ) agreement is to benefit banking, gaming, industrials, technology, and telecommunications sectors the most, Maybank Investment Banking Group said.

Banks, with their established regional presence, are positioned to capitalise on shifting supply chains.

“Johor’s position as a data centre hub could be further reinforced with the JS-SEZ and likely could be a key attractor of cornerstone investments,” Maybank said in a research note.

Green energy initiatives and infrastructure expansion are likely to boost industrials, whilst tax incentives and competitive costs may enhance the competitiveness of tech manufacturers. 

Property developers and REITs may see increased opportunities in Johor, though some initial business leakages to Malaysia are anticipated before higher-value demand fills the gap. 

Gaming demand in Singapore may also rise as border crossings become more seamless.

“In our view, the JS-SEZ could create a regionally differentiated value proposition by its combination of capital access, infrastructure and policy stability,” it added.

Also, the development is expected to benefit Singapore’s equities market across four primary themes: reduced operating costs and labour shortages, shifts in supply chains toward Southeast Asia, acceleration of net-zero initiatives, and expanded infrastructure and property investments.

The two governments aim to attract 100 projects over the next decade, focusing on key sectors such as aerospace, electronics, chemicals, medical devices, and pharmaceuticals. 

Additionally, digital economy initiatives, manufacturing, and renewable energy cooperation are prioritised. 

Malaysia plans to establish an infrastructure fund, whilst Singapore will provide funding support and facilitate operations for multinational corporations looking to expand into the SEZ. 

Measures like enhanced visa processes, improved people mobility, and potential tax incentives are expected to ease cross-border business operations.