OCBC, UOB poised to gain most from JS-SEZ; DBS could seek to expand Malaysia footprint: analysts

AMONG the trio of local banks, OCBC and UOB are expected to stand to gain the most from the Johor-Singapore Special Economic Zone (JS-SEZ) as facilitators of investment and trade, given their sizeable operations in both markets, analysts said.

The landmark JS-SEZ, signed in January this year, is expected to create 100 projects, and 20,000 jobs and investments across 11 sectors.

The zone will likely strengthen cross-border cooperation, enabling the banks with networks that are entrenched in the two markets to gain from stronger investment and business flows.

“Regionally integrated operations and entrenched positioning in Malaysia should enable the banks to participate across multiple verticals, especially as supply chains shift to the JS-SEZ,” said Thilan Wickramasinghe, head of equity research at Maybank Securities.

He noted that the Singapore banks have, in the past five to six years, invested in regionally integrating their wholesale and retail banking. This enables them to capture and facilitate supply chain shifts from North Asia to Asean.