KUALA LUMPUR: Pipeline investments worth RM27 billion, including RM18 billion from the manufacturing sector, are presenting themselves as “good indicators” of the country’s direct investments for the next three quarters of 2015.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Malaysia recorded RM57.4 billion of approved investments in the primary, services and manufacturing sectors for the first quarter of 2015 (1Q15).

The manufacturing sector led with investments of RM33.6 billion, accounting for 58.5% of the total, followed by the services sector at RM22.3 billion or 38.9%, and the primary sector at RM1.5 billion or 2.6%, he added.

According to the Malaysian Investment Development Authority (Mida), there are another RM27 billion worth of investments in the pipeline, comprising RM17.6 billion from the manufacturing sector and RM8.8 billion from the services sector, which would come from foreign investors.

Mida identified Australia, Hong Kong, Japan, the United Kingdom and Taiwan as foreign sources that are expected to invest RM13.3 billion in natural gas and chemicals, and RM2.4 billion in the electrical and engineering sector.

“We have RM27 billion [of] investments in the pipeline this year, and that is a good indicator of the remaining quarters,” he said.

“This will bring the total approved investments to RM61 billion this year, of which [the bulk of] RM52 billion will come from the manufacturing sector,” he added.

He said most of the RM33.6 billion of approved manufacturing investments for 1Q15 came from Petroliam Nasional Bhd’s (Petronas) projects, which contributed RM25.4 billion in domestic direct investments (DDIs).

Mustapa also said the total planned investments in Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor since last year amounted to about RM60 billion.

Earlier, Mustapa said DDIs rose 56.4% to RM47.4 billion for 1Q15, from RM30.3 billion a year ago.

“The first quarter [of] this year has been very unusual ... it is something that does not reflect the normal trend. The common ratio is 60:40 with DDIs in the lead, but for 1Q15, it rose to 82.6% or RM47.4 billion.

“For the corresponding quarter last year, DDIs made up 62.7%, while FDIs (foreign direct investments) were RM18 billion. For 1Q15, FDIs were only RM10 billion.

“FDIs are important because they help create jobs, and develop small and medium enterprises,” Mustapa added.

Aside from that, he said the country recorded an 18.8% increase in approved private investments of RM57.4 billion for 1Q15, compared with RM48.1 billion for the corresponding quarter of last year.

He said the bulk of 1Q15’s approved projects (58.5%) were for the manufacturing sector at 797 projects worth RM33.6 billion, followed by the services sector at 588 projects (38.9%) for RM22.3 billion.

In the manufacturing sector, where private investments surged 152.6% compared with the corresponding period of last year, the higher-level investments were drawn from the Rapid project.

Meanwhile, the services sector with 588 projects contributed RM22.3 billion or 38.9% of total approved projects for the quarter, he said.

This article first appeared in The Edge Financial Daily, on June 2, 2015.