Singapore's financial services sector might be more optimistic, but Kuala Lumpur is quickly overtaking as the new Southeast Asian operations hub.
Astbury Marsden’s Optimism Index found the Malaysian capital is leveraging on its position as a regional base for oil and gas companies, as well as its strengths in Islamic finance, to establish itself as the region's newest hub for financial and professional service firms.
"Firms are increasingly seeing Kuala Lumpur as an excellent alternative to Singapore, attracted by its competitive labour costs and its key location in Southeast Asia," Mark O’Reilly, managing director of Asia Pacific at Astbury Marsden, said.
"Professional services firms are strengthening their presence in Kuala Lumpur. It’s quickly becoming a new gateway for international firms looking to reach the Southeast Asian markets."
However, this does not mean Singapore is losing its stronghold over the region. The report still found the city state had increased hiring in the second quarter of this year, along with high employer optimism.
"Singapore continues to benefit from its position as the hub of choice for businesses looking to invest in areas of high growth such as Indonesia and Malaysia even though Kuala Lumpur is now becoming an important hub its own right," O'Reilly said.