Gregory Seow, Singapore head of global banking at Maybank, reminisced during a recent interview as he sat in his office on the 30th floor of Maybank Tower, overlooking Marina Bay.
“The first time I went to Hong Kong to work, I joined the Malaysian Chamber (Malaysian Chamber of Commerce, Hong Kong and Macau) in 1998. The minister of trade and industry, Rafidah Aziz, came to visit. There were 30 of us, and I was the most junior in Hong Kong then. Every one of them told her they wouldn’t be returning to Malaysia and would settle in Hong Kong,” Seow recalls. Today, Seow is also the global head of the financial institutions and the global banking groups at Maybank. He is also a Singaporean.
“Rafidah’s reaction was, how can we entice you to return? But [my peers] found Hong Kong and Chinese wives and settled in Hong Kong.” Hong Kong was considered the most forward-looking foreign city by many Malaysians at that time.
Fast forward almost 30 years, and Singapore and Hong Kong are on par, Seow says. More than that, Singapore is often preferred to Hong Kong by MNCs and global banks because of the widespread use of English, ease of doing business and its hub status.
And now, Malaysians and ex-Malaysians may have reason to prefer Singapore to Hong Kong because of Johor.
Malaysian banks in Singapore and Singapore banks in Malaysia are closely watching developments in Johor since a Memorandum of Understanding was signed by Singapore and Johor to work on the Johor-Singapore Special Economic Zone (JS-SEZ). The signing of the actual agreement with terms and conditions, which may involve the free movement of goods and people, has been postponed. It was scheduled for Dec 9 but is likely to take place in January 2025.
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“The JS-SEZ will offer special tax arrangements, passport-free clearance, training incentives, and joint events promotions to improve cross-border business for Malaysians and Singaporeans,” says HSBC in a Nov report. HSBC also has businesses on both sides of the Causeway.
Seow is more realistic about the JS-SEZ. “We’ve spoken to many clients and they have discussed some pain points.” These include infrastructure, connectivity, ease of clearing customs, ease of payment and free movement of capital.”
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Gregory Seow, Singapore head of global banking at Maybank
Infrastructure, connectivity
For optimists who view Johor-Singapore in the same light as Hong Kong-Shenzhen, the differences are stark. Immediately, the infrastructure linkages spring to mind by their absence in Johor-Singapore.
Hong Kong and Shenzhen are linked by the Shenzhen Hong Kong High-Speed Rail, with journeys ranging from 14 minutes to 24 minutes. The MTR from Central goes to Lo Wu or Lok Ma Chau, where travellers can transfer to the Shenzhen metro.
Shenzhen Bay Bridge (previously the Hong Kong- Shenzhen Western Corridor) is the fourth vehicular boundary crossing linking Hong Kong and the mainland. It is a 5.5km-long dual three-lane carriageway spanning Deep Bay from Lau Fau Shan to Shekou in Shenzhen.
A direct ferry links Hong Kong International Airport (HKIA) with Shenzhen International Airport. “Shenzhen and Hong Kong are one country, two systems, which is a lot easier for them to manoeuvre,” Seow observes. “Singapore and Johor are two jurisdictions, two countries.”
What are the infrastructure linkages between Singapore and Johor? For the longest time, it was the Causeway, and it is still the primary link where thousands of Malaysians travel to Singapore for work. The Malaysia-Singapore Second Link opened in 1998.
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The rapid transit service (RTS) will start in 2026, linking Woodlands North MRT station to Bukit Chagar on the Malaysian side. On the Singapore side, travellers can immediately travel to other parts of the island on the MRT. On the Malaysian side, the infrastructure linking Bukit Chagar to other parts of Johor Bahru and the broader Johor state is absent.
Car-lite Singapore and car-heavy Johor will have to meet somewhere in the middle.
In an interview with The Edge Malaysia, Lee Yeow Seng, group CEO of IOI Properties Group, says the group’s townships and developments in Johor are expected to benefit from the Gemas-Johor Bahru Electrified Double Track (EDT).
Some projects require just Johor state’s approval, while others may need federal approval. “That complicates the issue. I hope they have navigated through those issues back in April. Prime Minister Anwar also demonstrated his support. Banks like ourselves want to be the go-to-bank,” Seow says.
One of the projects that requires federal approval is Johor’s Autonomous Rapid Transit (ART) system, which is required to link commuters from the Johor-Singapore Rapid Transit System (RTS) that will be operational from the end of 2026
Investor interest stays high
“More importantly, our Singapore-based clients have signalled interest. Last month, I had a chairman-level lunch with a very established conglomerate in Hong Kong. They signalled their interest in obtaining a piece of land [in Johor] and getting contracts. The Chinese companies are debating whether to go to the Eastern Economic Corridor (EEC), Thailand, or here,” Seow says.
The JS-SEZ is likely to be the fourth attempt at igniting investor interest in Johor since the Growth Triangle was mooted by former prime minister Goh Chok Tong in 1989. Then in 2006, Iskandar was formed as a growth zone because of its proximity to Singapore. But it turned out to be an opportunity for property investment and speculation instead.
On its third attempt, the Johor government attracted Chinese developers such as Country Garden and Guangzhou R&F. That led to the development of Forest City, which is far from fully occupied, and Princess Cove R&F, which is popular largely because of its close proximity to the causeway linking Singapore.
Network effect
Maybank has a presence in all 10 Asean countries. “We support our companies in all 10 countries. We are very scientific in our approach. You must have the network effect. We’ve got client segments. For instance, we have Singapore companies that we will follow regionally as customers. We follow their footprint like a true relationship bank. At the same time, we are tapping from the region’s Vietnamese, Malaysian and Chinese companies that went to regionalise,” Seow explains.
For example, Maybank may only do limited business with a Vietnamese company, say $10 million or $20 million worth of transactions in Vietnam. “But if they link up with us in Singapore, we can do $100 million. We will have a stronger presence at the table to ask for other cross-sells. It’s this business where we have expanded quite a lot into,” he continues.
Maybank serves the mid-cap space and also large caps and conglomerates. “These are companies that go to London, Dubai, and Australia, and we can capture some of this, including investments back into Malaysia, like data centres,” Seow says.
“We have Corridor Play, where we want to make full use of our network in the region and China. We have a Middle East presence in Dubai to work together to increase our trade volume with clients.”
Take, for example, a regional Singaporean company. Maybank can help the company discount receivables from a Chinese supplier or vice versa. “We will help discount the bank letter of credit from, say, ICBC to provide enough liquidity,” Seow explains.
Unable to hide from Trump 2.0
Despite the opportunities within Asean and with China+1, Asean will not be able to hide from the chill winds of a trade war.
As Seow sees it, economies will “stockpile” from now till next year. After that, everyone will feel the pressure. “Singapore will feel the brunt of lower trade volume,” he says. And not just Singapore. World trade will fall. Thailand, Malaysia and Vietnam will be affected during this supply chain reconfiguration, Seow warns.
On the other hand, Johor could continue to benefit from investments. Data centre investment may reach peak capacity. Net-net, domestic demand within Asean could take up some of the slack from a trade war.
For instance, countries will look to Indonesia to supply their domestic markets and resources. Electric vehicle R&D and manufacturing would continue. Banks will continue to finance the digitalisation of companies and the transition to a green economy.
As all this takes place, treasury functions and logistics are likely to be done out of Singapore. “There will be a balancing act and we pray for a moderate tariff increase,” Seow says.
