JSSEZ may turn into multi-growth story like Shenzhen: JP Morgan

JP Morgan predicts the Johor-Singapore Special Economic Zone (JSSEZ) will develop into a long-term growth hub similar to Shenzhen’s SEZ. The firm cites a supportive regulatory environment, proactive collaboration, and tax incentives as key factors for success.

The SEZ’s progress is reflected in rising property prices, with the KL Property index up 65% since July 2023. Key growth sectors include real estate investment trusts, infrastructure, healthcare, renewable energy, and technology.

The SEZ, officially started on January 1, 2024, is expected to finalize its Memorandum of Agreement by September, with fiscal incentives included in the 2025 Budget.

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JSSEZ growth

“The JS-SEZ has had several working visits by the country officials, and government agencies have been involved in discussions and feedback sessions with private-sector representatives, with proactive follow-up actions.

“If the JS-SEZ moves ahead, it is likely to be a multi-year growth story with refinements along the way, just as how Shenzhen SEZ has developed over the past 45 years,” it said.

JP Morgan noted that the development of the SEZ aligned with its increasingly constructive outlook in Malaysia.

“The positive response to the Johor-Singapore SEZ initiative is evident in rising property share prices, with the KL Property index overall up 65 per cent since July 2023 and companies with large land-banks in Johor having seen two to four times share price increases,” it said in a note.