Friday 29 Mar 2024
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KUALA LUMPUR (July 29): German investors here are unperturbed by yesterday's Cabinet reshuffle and the prolonged weakness of the ringgit, said Malaysian-German Chamber of Commerce and Industry (MGCC) executive director Alexander Stedtfeld.

That's because Germany is used to changes in the government since it first started investing in Malaysia after Germany became a republic, he told a press conference to reveal findings from the Asean Business Climate Survey 2015 today.

Stedtfeld said he does not view the Cabinet reshuffle as affecting the perception of Malaysia as a viable business destination among German businesses and investors.

“Of course, governments are important when it comes to driving policies, but it is also equally important that they have a strong administrative framework, and this is where Malaysia stands out in the region,” he said.

Stedtfeld added that the weakening ringgit has led some German companies to view it as an opportunity to gain higher profit margin.

“Besides the ringgit, it is also the US dollar that influences us. So, while some (German) companies (operating here) say that it (weak ringgit) does make their business a little bit more difficult, there are those who are happy with the development since most of their operating costs are in the local currency and their markets are (dealt) in either the US dollar or euro,” Stedtler explained.

MGCC president Thomas Zimmerle said from an industry perspective, many German companies here generate their revenue in the US dollar, and have also hedged their US dollar exposure.

On the latest developments in the country, Zimmerle told theedgemarkets.com that MGCC is not too concern over the public clamour in the 1Malaysia Development Bhd controversy, as it is a national topic isolated to Malaysia.

“We are very confident that the country has the capability to resolve the issue, and we see Malaysia as being very stable,” he said.

Commenting on the Trans-Pacific Partnership Agreement (TPPA), Stedtfeld said MGCC views the trade agreement as a precursor to a European Union (EU)-Malaysia free trade agreement.

“The TPPA is a far reaching agreement that goes far beyond tariffs and has the goal of creating a more integrated and harmonize market in this region,” he said.

“We do not see the TPPA as something that would bring more businesses from Germany to Malaysia, but it would be an important milestone in order to achieve this free trade that we have in mind between the EU and Malaysia, as well as other Asean countries,” Stedfeld added.

Earlier, findings from the Asean Business Climate Survey 2015 revealed that German businesses in Asean view the current overall economic situation as satisfactory, although weaker compared with 2014.

A total of 27% of the respondents rated it as “good”, while 17% rated “bad”, compared with 2014 where 32.6% rated “good”, and 13% rated “bad”.

For the Malaysian market, 17.5% of respondents rated the overall company situation in the country as “bad”, compared with only 2.9% a year ago.

According to the survey, the most important influences on a company’s performance are seen in the availability of skilled labour (70.3%), government policies (54.1%), followed by bureaucracy and trade barriers to import (51.4% each).

The survey, conducted by the German Asean Chamber Network (GACN), focused on business confidence, growth expectations, investments and company indicators comparing the current situation with the past year and forecasts for the year ahead.

The survey was done ahead of the Asean Economic Community that is to be implemented by year end, in order to gauge the views and expectations of German companies in the region. GACN comprises Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

 

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