Malaysia's Oct trade rebound surprises
By JAGDEV SINGH SIDHU
Economists wonder if positive momentum can be sustained
KUALA LUMPUR: The strong trade performance for October has caught many economists by surprise with some wondering if the momentum in external demand can be sustained.
“The rebound in global economy is benefiting Malaysia’s exports as evidenced by the broad-based month-on-month growth in exports to key destinations. Year on year, the declines in exports to the United States and Japan are slowing, while shipments to Asean and the European Union rebounded,’’ said Maybank Investment Bank in a note yesterday.
Malaysia’s exports grew 1.6% to RM54.3bil in October on a year-on-year basis, the first growth after 12 consecutive months of contraction, with the surprise in the numbers coming from exports of electrical and electronic (E&E) goods, as well as petroleum products.
On a month-on-month basis, exports grew by 15%.
Maybank said the fasting month of Ramadhan and the subsequent Hari Raya holidays between late August and late September partly explained the month-on-month surge in exports in October following the sluggishness in September.
“Export data for Malaysia and Indonesia, the two Muslim-dominated countries in the region, show that these two economies outperformed other regional economies in terms of the month-on-month export growth in October after underperforming in September,’’ it said.
AmResearch senior economist Manokaran Mottain noted that the figures in October compared four weeks of work with three weeks in September due to the festive season.
The same goes for the year-on-year data as the Hari Raya holidays in 2008 were in October.
“You are comparing against seasonal variations,’’ he explained, adding that while the economy had seen its worst days, the latest data could not be taken as a firm trend.
“I would rather wait for November before revising my outlook for the economy,’’ he said.
OSK Research said the better showing was mainly due to a historically strong month for the semiconductor industry as equipment manufacturers ramp up production for the holiday season.
“Still, the recovery in global chip sales could falter due to mounting unemployment going into next year, especially in the United States, and the expiry of various incentives at the end of this year,’’ it said.
The research house said the pace of improvement in external trade for major developed economies was sluggish and likely to experience double digit contraction in the upcoming months as unemployment would continue to dampen consumption.
“Given the surprisingly good trade performance supported by intra-regional demand, we are now more confident that Malaysia’s exports will expand further on intra-regional trade, although the demand from developed countries should remain weak in the upcoming months. Improving global consumer and business sentiment will drive stock replenishment activities going forward,’’ OSK said.
Citigroup economist Kit Wei Zheng, in his note, said the October numbers were probably a signal of the long overdue cyclical catch-up story for Malaysia, in line with most other regional tech exporters (except for Singapore), which should be translated into the still weak manufacturing output numbers before long.
“However, given the choppy nature of E&E exports in recent months, this catch-up may not take place in a straight line, with a month-on-month technical pullback in November entirely possible.
“While recent upside surprise in October export figures suggest that the cyclical export recovery is gaining traction in Malaysia, we suspect that structural issues that preceded the recession could continue to be a drag on Malaysia’s manufacturing sector, after the initial bounce,’’ he said.
Affin Investment Bank, in a note, said that while Malaysia’s exports had benefitted from the recovery in global demand for electronics, further recovery in global trade and production volume would also translate into higher demand for other major product groups, such as commodities.
“Going into 2010, as domestic demand recovers, and with the private sector taking an active role in driving economic growth, imports are expected to gradually increase at a steadier pace together with the recovery of exports,’’ it said.
“We are projecting export growth to recover and increase from -15.4% in 2009 to around 9.9% in 2010, while import growth will recover more strongly from -15.2% to 18.8% during the same period.”
Surprise 1.6pc growth in October exports
By Rupa Damodaranrupabanerji@nstp.com.my2009/12/05
MALAYSIA's exports surged in October, moving into the positive growth territory of 1.6 per cent, after 12 continuous months of contraction.The sharp jump took the market by surprise as those polled by the Business Times were only expecting an improvement mostly due to the base effect.
The International Trade and Industry Ministry (Miti) described October's exports which grew by 15 per cent from September, as the highest monthly exports in the last 10 months."The strong growth was led by exports of electrical and electronic products," it said.It was also attributed mainly to higher exports of crude petroleum, liquefied natural gas (LNG), wood products, optical and scientific equipment as well as manufactures of metal.
HSBC Bank plc senior Asian economist Robert Prior-Wandesforde described the number as spectacular, saying the tide has well and truly turned for Malaysian exports.He said countries such as Singapore, India and Korea saw a pull back in October merchandise export values but it was not the case for Malaysia and Indonesia.
AmResearch senior economist Manokaran Mottain however remains cautious on the outlook although exports have normalised."Going by the slowing trend in global PMI (Purchasing Managers' Index) in November, we would rather wait for another month before revising Malaysia's outlook ahead," he said.
He said growth in global services and manufacturing activity slowed in November as expansion in the services sector slowed to a near halt according to a recent survey.
According to Miti, exports to all major markets improved. Singapore, China, the US, Japan and Thailand were the top five export destinations.
The edge
Malaysia's October exports at RM54.28b, highest in 10 months
KUALA LUMPUR: Malaysia's exports rose to RM54.28 billion in October 2009, the highest monthly exports recorded in the last 10 months, underpinned by exports of electrical and electronic (E&E) products.
The Malaysia External Trade Development Corp (Matrade) said on Friday, Dec 4 that total exports in October 2009, were 15% higher than September's RM47.19 billion.
Imports increased by 12.9% to RM42.81 billion in October 2009 and total trade increased by 14.1% to RM97.09 billion. Trade surplus of RM11.47 billion was recorded in October 2009, making it the 144th consecutive month of trade surplus since November 1997.
"On a year-on-year basis, exports increased by 1.6%. This was the first positive growth after 12 consecutive months of contraction. Imports were lower by 2.3% and total trade contracted by 0.2%, while trade surplus rose by 19.3%," it said.
Matrade said the higher in exports in October 2009 were driven by E&E products, crude petroleum, liquefied natural gas (LNG), wood products, optical and scientific equipment as well as manufactures of metal.
E&E products accounted for RM23.36 billion or 43% of total exports; palm oil (RM3.49 billion or 6.4% of total exports) and chemicals and chemical products (RM3.13 billion or 5.8% of total exports).
China was the single largest export market, with exports rising by 1.2% to RM6.78 billion from a month ago, underpinned by higher exports of E&E products, chemicals and chemical products as well as crude rubber. Exports to the China in October 2009 rose by 39.2% from a year ago.
Matrade said exports to the European Union (EU) increased by 15.2% to RM6.14 billion from September 2009. The increase was due to higher exports of E&E products, palm oil, optical and scientific equipment as well as crude rubber. Compared with October 2008, exports rose 0.6%.
Exports to the US increased by 24.5% to RM5.94 billion from September, mainly due to higher exports of E&E products, refined petroleum products, optical and scientific equipment as well as wood products. However, year-on-year, exports fell 7.7%.
Exports to Japan were RM5.09 billion, up 16.8% from September 2009. This resulted from higher exports of E&E products, crude petroleum, wood products and refined petroleum products. However, when compared with October last year, exports fell 15.3%.
Matrade said October's trade data showed imports fell 2.3% to RM42.81 billion in October from a year ago. Intermediate goods totalled RM28.97 billion or 67.7% of total imports; capital goods (RM6.43 billion or 15% of total imports); and consumption goods (RM2.7 billion or 6.3% of total imports).
Major import products were E&E products valued at RM15.17 billion or 35.4% of total imports; machinery, appliances and parts (RM3.61 billion or 8.4% of total imports); chemicals and chemical products (RM3.54 billion or 8.3% of total imports).
The Insider
Malaysia stages surprise export recovery in October
KUALA LUMPUR, Dec 4 — Malaysia’s annual exports rose for the first time in 12 months in October, making it one of the first Asian countries to post positive year-on-year growth since the global financial crisis took a grip last year.
Exports rose 1.6 percent from a year ago, signalling the worst may be over for Asia’s third most trade-dependent country amid signs that the region, excluding Japan, may be staging a “V-Shaped” recovery, boosted by demand from China.
That was far better than the 10.5 per cent contraction forecast in a Reuters poll of 11 economists.
Malaysian exports to China surged by 39.2 per cent from a year earlier and electronics exports, which account for 43 per cent of Malaysia’s total, rose by 18.4 per cent.
“One should expect some sort of correction after that number but I don’t think the correction will be sufficient to change the positive trend,” said HSBC economist, Robert Prior-Wandesforde.
Indonesia, whose reliance on exports is much less than Malaysia, posted October annual export growth of 10.1 per cent.
In Asia, Singapore, Thailand and Hong Kong all posted contractions in exports in October although South Korea’s exports rose in November by 18.8 per cent year-on-year after 13 months of contraction.
Taiwan is expected to report on Monday that its exports for November rose 16 per cent over a year earlier, which would be the island’s first annual rise in 15 months. “Presumably, the rise in exports is more in line with a gradual improvement in the region rather than a dramatic surge.
Nevertheless, it is supportive and should offer some encouragement moving forward,” said Action Economics economist, David Cohen. — Reuters
Malaysia stages surprise export recovery in October
http://www.forexyard.com/en/reuters_inner.tpl?action=2009-12-04T103524Z_01_KLR212436_RTRIDST_0_MALAYSIA-ECONOMY-TRADE-UPDATE-1
Saturday December 05, 2009 12:35:10 AM GMT
MALAYSIA-ECONOMY/TRADE (UPDATE 1)
* Oct exports up 1.6 pct vs yr ago (poll down 10.5 pct)
* Exports up 15 pct from Sept (not seasonally adjusted)
* Electronics exports up 18.4 pct on yr, China up 39.2 pct
(Adds details, analysts)
By Royce Cheah
KUALA LUMPUR, Dec 4 (Reuters) - Malaysia's annual exports rose for the first time in 12 months in October, making it one of the first Asian countries to post positive year-on-year growth since the global financial crisis took a grip last year.
Exports rose 1.6 percent from a year ago, signalling the worst may be over for Asia's third most trade-dependent country amid signs that the region, excluding Japan, may be staging a "V-Shaped" recovery, boosted by demand from China.
That was far better than the 10.5 percent contraction forecast in a Reuters poll of 11 economists
Malaysian exports to China surged by 39.2 percent from a year earlier and electronics exports, which account for 43 percent of Malaysia's total, rose by 18.4 percent.
"One should expect some sort of correction after that number but I don't think the correction will be sufficient to change the positive trend," said HSBC economist, Robert Prior-Wandesforde.
Indonesia, whose reliance on exports is much less than Malaysia, posted October annual export growth of 10.1 percent.
In Asia, Singapore, Thailand and Hong Kong all posted contractions in exports in October although South Korea's exports rose in November by 18.8 percent year-on-year after 13 months of contraction.
Taiwan is expected to report on Monday that its exports for November rose 16 percent over a year earlier, which would be the island's first annual rise in 15 months.
"Presumably, the rise in exports is more in line with a gradual improvement in the region rather than a dramatic surge. Nevertheless, it is supportive and should offer some encouragement moving forward," said Action Economics economist, David Cohen. ($1=3.379 Malaysian Ringgit) (Additional reporting by Niluksi Koswanage and Angie Teo; Editing by David Chance) ((royce.cheah@thomsonreuters.com; +603 2333 8040; Reuters Messaging; royce.cheah.reuters.com@reuters.net; bureau email: areuters@gmail.com))
Bloomberg-Malaysia’s Exports Unexpectedly Rebound as China Demand Surges
By Stephanie Phang
Dec. 4 (Bloomberg) -- Malaysia’s exports unexpectedly rose for the first time in a year in October as demand from China jumped amid an Asian economic recovery.
Overseas shipments climbed 1.6 percent from a year earlier to 54.3 billion ringgit ($16 billion) after falling 24.2 percent in September, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 13 economists was for a 10.5 percent decline, with none expecting an increase.
Asia is leading the world’s recovery from its worst recession since the 1930s after policy makers pledged more than $950 billion in stimulus measures and cut interest rates to revive growth. Malaysia’s government, which raised its 2009 economic forecast in October, said this week that next year’s expansion may exceed the current 2 percent-to-3 percent target.
“The outlook on the export front is getting brighter as recovery remains unabated,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. “Investment is still a drag on the economy as companies have remained cautious on business spending while waiting for outlook to improve further. This will change if the improvement in export performance proves sustainable.”
Malaysia is able to achieve economic growth of 5 percent next year, aided by private investment, Second Finance Minister Ahmad Husni Hanadzlah said Dec. 2. That target may be “easily” achieved as improving exports spur business expansion and employment, boosting consumption, Seah said.
Stimulus Measures
Prime Minister Najib Razak has unveiled 67 billion ringgit of stimulus measures in the past year to help the nation climb out of its recession. Southeast Asia’s third-largest economy shrank 1.2 percent in the three months through September, the smallest decline in three quarters.
The benchmark stock index has risen more than 40 percent this year as Asia’s recovery boosted demand for emerging-market assets. The ringgit has increased more than 3 percent in the past six months.
Shipments to China, Malaysia’s second-biggest market during the month, jumped 39.2 percent in October from a year earlier as electronics sales rose, the trade ministry said. Exports to Hong Kong surged 28.2 percent, while those to Thailand and Australia also gained. The decline in sales to Singapore, Japan and the U.S. eased.
Sales of electrical and electronics products by companies including Malaysian Pacific Industries Bhd. and Unisem (M) Bhd. climbed 18.4 percent in October, compared with a 19.2 percent decline the previous month. Such goods made up 43 percent of total exports.
Malaysia’s imports dropped 2.3 percent in October from a year earlier to 42.8 billion ringgit, the smallest decline in a year. That widened the trade surplus to 11.5 billion ringgit.
Exports fell 20.7 percent to 448.58 billion ringgit in the 10 months through October while imports contracted 21.4 percent to 351.2 billion ringgit, resulting in a trade surplus of 97.4 billion ringgit, the report showed.
To contact the reporter on this story: Stephanie Phang in Singapore at sphang@bloomberg.net
Last Updated: December 4, 2009 05:01 EST
Asiaone
Malaysia's exports rise 1.6 percent in October
KUALA LUMPUR, MALAYSIA (AFP) - Malaysia's exports, the mainstay of the economy, increased for the first time in 12 months with a modest 1.6 percent rise in October from a year ago, according to official data released Friday.
The trade ministry said that exports rose slightly to 54.28 billion ringgit ($22 billion) year-on-year while imports fell 2.3 percent to 42.81 billion ringgit, producing a surplus of 11.47 billion ringgit.
"This was the first positive growth after 12 consecutive months of contraction," the trade ministry said in a statement.
It attributed the increase to higher exports of electrical and electronic products, crude petroleum, liquefied natural gas (LNG), wood products and optical and scientific equipment.
Malaysia's exports slumped 24.2 percent in September and fell 19.8 percent in August.
According to the ministry, total trade from January to October was worth 799.78 billion ringgit, a decline of 21 percent from the same period a year earlier.
Electrical and electronic items currently account for 43 percent of Malaysia's total exports to key markets like China, Japan, Singapore, Thailand and the United States.
Malaysia's export-dependent economy has been hit hard by the global recession, contracting by a forecast 3.0 percent this year and jeopardizing its ambitions of becoming a developed nation by 2020.
Second Finance Minister Ahmad Husni Hanadzlah recently warned that Malaysia's economy had been stagnating for the past decade and was trailing badly behind its neighbours.
Sunday, December 6, 2009
Thursday, November 5, 2009
Malaysia's Trade in September 2009
Malaysia’s Export Slump Deepens Amid ‘Bumpy’ Economic Recovery
By Shamim Adam and Michael J. Munoz
Nov. 4 (Bloomberg) -- Malaysia’s export decline deepened in September as commodity prices fell from a year earlier and electronics sales slid.
Overseas shipments dropped 24.2 percent from a year earlier to 47.24 billion ringgit ($13.8 billion) after falling a revised 19.9 percent in August, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 17 economists was for a 21 percent decline.
“Exports remain weak due to lower commodity prices for palm and crude oil compared with a year ago,” said Alaistair Chan, an economist at Moody’s Economy.com in Sydney. Overseas sales “are likely to improve in the coming months,” he said.
Southeast Asia’s third-largest economy is vulnerable to fluctuations in palm oil and petroleum prices because commodities make up more than 20 percent of its exports. Prime Minister Najib Razak said yesterday the nation may emerge from its recession earlier than the government previously predicted as the outlook for growth in the third quarter “brightened.”
Malaysia’s “export value will continue to grind forward on the back of the steady improvement in the external environment,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. Recoveries are usually “bumpy and it’s never a flight to the moon,” he said.
Crude oil was about 30 percent cheaper at the end of September compared with a year earlier. Prices have since risen above $80 a barrel. Palm oil costs also fell.
Malaysia’s petroleum exports plunged 53.3 percent in September from a year earlier. Liquefied natural gas shipments declined 35.6 percent and palm oil sales dropped 25.5 percent.
Economic Forecasts
Shipments to China rose 9.8 percent in September from a year earlier amid higher electronics and crude oil sales, the trade ministry said. Exports to Singapore and the U.S. fell.
Malaysia raised its 2009 economic forecast last month, joining neighbors including Singapore and Thailand in saying this year’s slump is easing faster than expected as the world recovers from its recession.
The government expects the $195 billion economy to shrink 3 percent this year, before expanding between 2 percent and 3 percent in 2010. That compares with the World Bank’s projection for a contraction of 2.3 percent in 2009 and growth of 4.1 percent next year, according to a report published today.
“Consumption and fixed-investment growth will remain relatively subdued due to uncertainties about the global outlook, the efforts of fiscal consolidation and still-low levels of capacity utilization,” the lender said. “The turnaround in the inventory cycle is expected to be a main driver of growth.”
Electronics Fall
Sales of electrical and electronics products by companies including Malaysian Pacific Industries Bhd. fell 19.4 percent in September from a year earlier, compared with a 13.1 percent decline in August.
Malaysia’s imports dropped 20.2 percent in September from a year earlier to 37.97 billion ringgit, narrowing the trade surplus to 9.27 billion ringgit.
Exports fell 23 percent to 394.34 billion ringgit in the nine months through September while imports contracted 23.5 percent to 308.44 billion ringgit, resulting in a trade surplus of 85.9 billion ringgit, the report showed.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Asian Economic News
--------------------------------------------------------------------------------
Malaysia Sept. Trade Surplus Shrinks
Wednesday, the Department of Statistics Malaysia announced that the trade surplus stood at MYR 9.27 billion in September, down from MYR 9.57 billion in August. Economists expected a trade surplus of MYR 9.7 billion. This was the 143rd consecutive month of trade surplus since November 1997.
Exports declined 1.1% month-on-month to MYR 47.24 billion in September, while imports decreased 0.7% to MYR 37.97 billion.
On an annual basis, exports dropped 24.2% in September, compared to the 19.8% fall in the previous month. At the same time, imports slipped 20.2%, after falling 18.6% in August.
For the first nine months of the year, exports and imports decreased by 23% and 23.5%, respectively compared to the same period of the previous year. During the period, the trade surplus amounted to MYR 85.9 billion.
In the third quarter, exports increased 11.4% sequentially to MYR 143.85 billion, while imports grew 14.2% to MYR 17.18 billion. Year-on-year, exports and imports dropped by 22.3% and 18.3% respectively.
by RTT Staff Writer
For comments and feedback: contact editorial@rttnews.com
Thomson Reuters
INSTANT VIEW 4-Malaysia Sept exports worse than f'cast
11.04.09, 05:30 AM EST
KUALA LUMPUR, Nov 4 (Reuters) - Malaysia's exports in September fell by a larger-than-expected 24.2 percent from a year ago, more than the 20.7 percent decline seen in a Reuters poll.
ANALYST COMMENTS
JOANNA TAN, ECONOMIST, FORECAST PTE LTD
'The bottom line is that the recovery path is never a straight one and downside risks remain especially if inventory restocking pulls back before demand can find a firm footing. A stronger ringgit and weak consumer appetites elsewhere are also factors that will weigh on the external front
ALAN TAN, ECONOMIST, AFFIN INVESTMENT BANK
'Came in worst than market expectations, but I think if we look at it from a month to month basis, the magnitude of the contraction slowed from -2.1 percent in August to -1.1 percent in September. I think the worst than expected decline in exports was due to electronics and crude oil, combination of both.'
'I would think that the worst than expected contraction was due to electronics - which accounts for large chunk of our exports. Basically we saw slower demand from the US mainly in electonic products, but surprisingly exports to China picked up.
'To sum up, yes September disappoints but I think going forward we will continue to see a smaller contraction in exports in Q4, this is due to the lower base impact.'
ALVIN LIEW, STANDARD CHARTERED, ECONOMIST
'The dismal September exports outcome is certainly worrying for Malaysia's manufacturing sector as the sector may still see declines perpetuate into the final quarter of 2009, especially if the global recovery is prolonged and shallow.
'We also emphasize a recurring worry that the persistent sharp decline of imports while good for the trade balance for now, may lead to long term concerns as sharply declining imports may imply that companies are postponing capital investments.
'This would reduce the capacity of Malaysia's manufacturing sector in the medium and long term, preventing it from reaping the benefits of an eventual recovery in demand.'
IRVIN SEAH, DBS ECONOMIST
'Recovery is always a bumpy ride, for every 3 steps forward bound to get 1 or 2 steps back. But the longer term outlook for Malaysia remains bright and we expect continued improvement in the headline GDP growth figure.'
(Reporting by Royce Cheah; Editing by David Chance) Keywords: MALAYSIA ECONOMY/TRADE
(royce.cheah@thomsonreuters.com; +603 2333 8040; Reuters Messaging; royce.cheah.reuters.com@reuters.net; bureau email: areuters@gmail.com)
Published: Wednesday November 4, 2009 MYT 3:04:00 PMUpdated: Wednesday November 4, 2009 MYT 4:44:48 PM
World Bank: Malaysia'a 2009 GDP to contract 2.3%, grow 4.1% in 2010
BANGKOK: Malaysia's near-term outlook shows a slow process of recovery, with real GDP projected to contract 2.3 per cent this year before growing by 4.1 per cent next year, the World Bank said in its latest update on Wednesday.
In its half-yearly assessment of the economic health of East Asia and Pacific region released on Wednesday, it said the revised projection showed lower growth compared to -1.0 forecast in April.
It said consumption and fixed investment growth would remain relatively subdued due to uncertainties on the global outlook, efforts of fiscal consolidation and still low levels of capacity utilisation.
The turnaround in the inventory cycle is expected to be the main growth driver, it said, adding that import growth would continue to outpace export growth in the coming quarters, resulting in a smaller trade surplus.
The current account balance is expected to decline to 12.3 per cent of the GDP this year and further to 12.1 per cent next year.
The update titled " Transforming the Rebound into Recovery" said large and timely fiscal stimulus spending in most East Asian and Pacific countries led by China and South Korea, along with a powerful inventory restocking process now underway, have driven the rebound in the region and contributed significantly to confidence in a global pick-up.
Developments in the region remain strongly influenced by China as the projected GDP increase this year will offset three quarters of decline in the GDPs of the United States, the Eurozone and Japan.
With the projected 8.4 per cent growth in China this year and the country's domestic demand racing ahead global demand, countries exporting consumer durables, electronic components and raw materials to China have felt the positive flow-on effects.
As a result, the World Bank is projecting 6.7 per cent growth this year for developing East Asia and the Pacific and 7.8 per cent next year.
Though Indonesia and Vietnam were performing well, East Asia, excluding China, is expected to grow at around one per cent this year. more slowly than South Asia, Middle East and North Africa and only slightly stronger than Sub-Saharan Africa.
Some countries remain hard hit, with the GDP of Cambodia, Malaysia and Thailand contracting and barely growing in Mongolia and some of the Pacific Islands, the report said.
The World Bank said Thailand's economy is expected to shrink by 2.7 per cent this year before expanding by about 3.5 per cent next year if political stability continues in the country. - Bernama
On the Net: Full reportWorld Bank: www.worldbank.org
Malaysian trade down 22.4% in Sept.
www.chinaview.cn 2009-11-04 18:58:16
KUALA LUMPUR, Nov. 4 (Xinhua) -- Malaysia's total trade in September declined by 22.4 percent compared with the same month in 2008, the Malaysian External Trade Development Corporation (MATRADE) said here on Wednesday.
According to the statement issued by MATRADE, in September, Malaysia's total exports dropped by 24.2 percent while total imports were 20.2 percent lower on a year-on-year basis.
MATRADE said that total trade in September was valued at 85.21 billion ringgit (24.35 billion U.S. dollars) with total exports and total imports valued at 47.24 billion ringgit (13.5 billion U.S. dollars) and 37.97 billion ringgit (10.85 billion U.S. dollars) respectively.
A trade surplus of 9.27 billion ringgit (2.65 billion U.S. dollars) was recorded in September 2009, making it the 143rd consecutive month of trade surplus since November 1997.
Total trade during the first nine months was valued at 702.78 billion ringgit (200.79 billion U.S. dollars), a drop of 23.2 percent from the corresponding period of 2008.
During the same period, total exports declined by 23 percent to394.34 billion ringgit (112.67 billion U.S. dollars) while total imports were lower by 23.5 percent to 308.44 billion ringgit (88.13 billion U.S. dollars).
On a month-on-month basis, Malaysia's total trade in September was 0.9 percent lower than August 2009 with total exports and total imports declined by 1.1 percent and 0.7 percent respectively.
By Shamim Adam and Michael J. Munoz
Nov. 4 (Bloomberg) -- Malaysia’s export decline deepened in September as commodity prices fell from a year earlier and electronics sales slid.
Overseas shipments dropped 24.2 percent from a year earlier to 47.24 billion ringgit ($13.8 billion) after falling a revised 19.9 percent in August, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 17 economists was for a 21 percent decline.
“Exports remain weak due to lower commodity prices for palm and crude oil compared with a year ago,” said Alaistair Chan, an economist at Moody’s Economy.com in Sydney. Overseas sales “are likely to improve in the coming months,” he said.
Southeast Asia’s third-largest economy is vulnerable to fluctuations in palm oil and petroleum prices because commodities make up more than 20 percent of its exports. Prime Minister Najib Razak said yesterday the nation may emerge from its recession earlier than the government previously predicted as the outlook for growth in the third quarter “brightened.”
Malaysia’s “export value will continue to grind forward on the back of the steady improvement in the external environment,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. Recoveries are usually “bumpy and it’s never a flight to the moon,” he said.
Crude oil was about 30 percent cheaper at the end of September compared with a year earlier. Prices have since risen above $80 a barrel. Palm oil costs also fell.
Malaysia’s petroleum exports plunged 53.3 percent in September from a year earlier. Liquefied natural gas shipments declined 35.6 percent and palm oil sales dropped 25.5 percent.
Economic Forecasts
Shipments to China rose 9.8 percent in September from a year earlier amid higher electronics and crude oil sales, the trade ministry said. Exports to Singapore and the U.S. fell.
Malaysia raised its 2009 economic forecast last month, joining neighbors including Singapore and Thailand in saying this year’s slump is easing faster than expected as the world recovers from its recession.
The government expects the $195 billion economy to shrink 3 percent this year, before expanding between 2 percent and 3 percent in 2010. That compares with the World Bank’s projection for a contraction of 2.3 percent in 2009 and growth of 4.1 percent next year, according to a report published today.
“Consumption and fixed-investment growth will remain relatively subdued due to uncertainties about the global outlook, the efforts of fiscal consolidation and still-low levels of capacity utilization,” the lender said. “The turnaround in the inventory cycle is expected to be a main driver of growth.”
Electronics Fall
Sales of electrical and electronics products by companies including Malaysian Pacific Industries Bhd. fell 19.4 percent in September from a year earlier, compared with a 13.1 percent decline in August.
Malaysia’s imports dropped 20.2 percent in September from a year earlier to 37.97 billion ringgit, narrowing the trade surplus to 9.27 billion ringgit.
Exports fell 23 percent to 394.34 billion ringgit in the nine months through September while imports contracted 23.5 percent to 308.44 billion ringgit, resulting in a trade surplus of 85.9 billion ringgit, the report showed.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Asian Economic News
--------------------------------------------------------------------------------
Malaysia Sept. Trade Surplus Shrinks
Wednesday, the Department of Statistics Malaysia announced that the trade surplus stood at MYR 9.27 billion in September, down from MYR 9.57 billion in August. Economists expected a trade surplus of MYR 9.7 billion. This was the 143rd consecutive month of trade surplus since November 1997.
Exports declined 1.1% month-on-month to MYR 47.24 billion in September, while imports decreased 0.7% to MYR 37.97 billion.
On an annual basis, exports dropped 24.2% in September, compared to the 19.8% fall in the previous month. At the same time, imports slipped 20.2%, after falling 18.6% in August.
For the first nine months of the year, exports and imports decreased by 23% and 23.5%, respectively compared to the same period of the previous year. During the period, the trade surplus amounted to MYR 85.9 billion.
In the third quarter, exports increased 11.4% sequentially to MYR 143.85 billion, while imports grew 14.2% to MYR 17.18 billion. Year-on-year, exports and imports dropped by 22.3% and 18.3% respectively.
by RTT Staff Writer
For comments and feedback: contact editorial@rttnews.com
Thomson Reuters
INSTANT VIEW 4-Malaysia Sept exports worse than f'cast
11.04.09, 05:30 AM EST
KUALA LUMPUR, Nov 4 (Reuters) - Malaysia's exports in September fell by a larger-than-expected 24.2 percent from a year ago, more than the 20.7 percent decline seen in a Reuters poll.
ANALYST COMMENTS
JOANNA TAN, ECONOMIST, FORECAST PTE LTD
'The bottom line is that the recovery path is never a straight one and downside risks remain especially if inventory restocking pulls back before demand can find a firm footing. A stronger ringgit and weak consumer appetites elsewhere are also factors that will weigh on the external front
ALAN TAN, ECONOMIST, AFFIN INVESTMENT BANK
'Came in worst than market expectations, but I think if we look at it from a month to month basis, the magnitude of the contraction slowed from -2.1 percent in August to -1.1 percent in September. I think the worst than expected decline in exports was due to electronics and crude oil, combination of both.'
'I would think that the worst than expected contraction was due to electronics - which accounts for large chunk of our exports. Basically we saw slower demand from the US mainly in electonic products, but surprisingly exports to China picked up.
'To sum up, yes September disappoints but I think going forward we will continue to see a smaller contraction in exports in Q4, this is due to the lower base impact.'
ALVIN LIEW, STANDARD CHARTERED, ECONOMIST
'The dismal September exports outcome is certainly worrying for Malaysia's manufacturing sector as the sector may still see declines perpetuate into the final quarter of 2009, especially if the global recovery is prolonged and shallow.
'We also emphasize a recurring worry that the persistent sharp decline of imports while good for the trade balance for now, may lead to long term concerns as sharply declining imports may imply that companies are postponing capital investments.
'This would reduce the capacity of Malaysia's manufacturing sector in the medium and long term, preventing it from reaping the benefits of an eventual recovery in demand.'
IRVIN SEAH, DBS ECONOMIST
'Recovery is always a bumpy ride, for every 3 steps forward bound to get 1 or 2 steps back. But the longer term outlook for Malaysia remains bright and we expect continued improvement in the headline GDP growth figure.'
(Reporting by Royce Cheah; Editing by David Chance) Keywords: MALAYSIA ECONOMY/TRADE
(royce.cheah@thomsonreuters.com; +603 2333 8040; Reuters Messaging; royce.cheah.reuters.com@reuters.net; bureau email: areuters@gmail.com)
Published: Wednesday November 4, 2009 MYT 3:04:00 PMUpdated: Wednesday November 4, 2009 MYT 4:44:48 PM
World Bank: Malaysia'a 2009 GDP to contract 2.3%, grow 4.1% in 2010
BANGKOK: Malaysia's near-term outlook shows a slow process of recovery, with real GDP projected to contract 2.3 per cent this year before growing by 4.1 per cent next year, the World Bank said in its latest update on Wednesday.
In its half-yearly assessment of the economic health of East Asia and Pacific region released on Wednesday, it said the revised projection showed lower growth compared to -1.0 forecast in April.
It said consumption and fixed investment growth would remain relatively subdued due to uncertainties on the global outlook, efforts of fiscal consolidation and still low levels of capacity utilisation.
The turnaround in the inventory cycle is expected to be the main growth driver, it said, adding that import growth would continue to outpace export growth in the coming quarters, resulting in a smaller trade surplus.
The current account balance is expected to decline to 12.3 per cent of the GDP this year and further to 12.1 per cent next year.
The update titled " Transforming the Rebound into Recovery" said large and timely fiscal stimulus spending in most East Asian and Pacific countries led by China and South Korea, along with a powerful inventory restocking process now underway, have driven the rebound in the region and contributed significantly to confidence in a global pick-up.
Developments in the region remain strongly influenced by China as the projected GDP increase this year will offset three quarters of decline in the GDPs of the United States, the Eurozone and Japan.
With the projected 8.4 per cent growth in China this year and the country's domestic demand racing ahead global demand, countries exporting consumer durables, electronic components and raw materials to China have felt the positive flow-on effects.
As a result, the World Bank is projecting 6.7 per cent growth this year for developing East Asia and the Pacific and 7.8 per cent next year.
Though Indonesia and Vietnam were performing well, East Asia, excluding China, is expected to grow at around one per cent this year. more slowly than South Asia, Middle East and North Africa and only slightly stronger than Sub-Saharan Africa.
Some countries remain hard hit, with the GDP of Cambodia, Malaysia and Thailand contracting and barely growing in Mongolia and some of the Pacific Islands, the report said.
The World Bank said Thailand's economy is expected to shrink by 2.7 per cent this year before expanding by about 3.5 per cent next year if political stability continues in the country. - Bernama
On the Net: Full reportWorld Bank: www.worldbank.org
Malaysian trade down 22.4% in Sept.
www.chinaview.cn 2009-11-04 18:58:16
KUALA LUMPUR, Nov. 4 (Xinhua) -- Malaysia's total trade in September declined by 22.4 percent compared with the same month in 2008, the Malaysian External Trade Development Corporation (MATRADE) said here on Wednesday.
According to the statement issued by MATRADE, in September, Malaysia's total exports dropped by 24.2 percent while total imports were 20.2 percent lower on a year-on-year basis.
MATRADE said that total trade in September was valued at 85.21 billion ringgit (24.35 billion U.S. dollars) with total exports and total imports valued at 47.24 billion ringgit (13.5 billion U.S. dollars) and 37.97 billion ringgit (10.85 billion U.S. dollars) respectively.
A trade surplus of 9.27 billion ringgit (2.65 billion U.S. dollars) was recorded in September 2009, making it the 143rd consecutive month of trade surplus since November 1997.
Total trade during the first nine months was valued at 702.78 billion ringgit (200.79 billion U.S. dollars), a drop of 23.2 percent from the corresponding period of 2008.
During the same period, total exports declined by 23 percent to394.34 billion ringgit (112.67 billion U.S. dollars) while total imports were lower by 23.5 percent to 308.44 billion ringgit (88.13 billion U.S. dollars).
On a month-on-month basis, Malaysia's total trade in September was 0.9 percent lower than August 2009 with total exports and total imports declined by 1.1 percent and 0.7 percent respectively.
Tuesday, October 27, 2009
Trade-Budget 2010
Malaysia Budget 2010 Highlights2009/10/23
2010 BUDGET BUSINESS HIGHLIGHTS
* Malaysia economy to grow 2-3 per cent in 2010
* Mining to grow 1.1 per cent, manufacturing sector 1.7 per cent, agriculture 2.5 per cent, construction 3.2 per cent and service 3.6 per cent.
* Private consumption expand 2.9 per cent while private investment 3.4 per cent
* Per capita income to increase by 2.5 per cent to RM24,661
* TNB to spend RM5 billion to implement electricity generation, transmission and distribution projects in 2010.
* Individual tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012.
* Public-private collaborations to include an integrated immigration, customs and quarantine complex in Bukit Kayu Hitam, construction of six UiTM campuses and the development of MATRADE centre
* 1Malaysia Development Bhd (1MDB) will establish a corporate social responsibility fund totalling RM100 million as a start to finance community activities
* Government to allocate RM899 million to intensify tourism industry.
* Government to enhance tax incentives for healthcare service providers who offer services to foreign health tourists with income tax exemptions of 100 per cent on the value of increased exports from 50 per cent previously.
* Individual taxpayers to be given tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012
* Civil servants are eligible to apply for computer loans once in every three years and up to a maximum of RM5,000 from the government once in every five years
* Formulate Halal Act in collaboration with State Islamic Religious Councils.
* To corporatise the Halal Industry Development Corporation as an agency under MITI* Intensify Halal Certification by the Islamic Development Department of Malaysia (JAKIM) by collaborating with international institutions to obtain standards certification such as HACCP ad GMP.
* To provide RM24 million to develop halal products anti-smuggling system at three entry points and three main ports.
* Allocate RM137 million to upgrade and improve drainage and irrigation infrastructures in paddy fields involving 180,000 farmers.
* To provide RM70 million to build the Paya Peda Dam Project in Terengganu to increase water supply capacity to paddy irrigation scheme in Besut.
* Allocate RM82 million to modernise aquaculture industry and conduct entrepreneurship training scheme for aquaculture breeders with focus on production of fish fry and ornamental fish.
* “The stock market will be further liberalised to enhance its efficiency as well as attract domestic and foreign investment. For this purpose, the government will undertake the following measures: First, liberalise the commission sharing arrangements between stockbrokers and remisiers in 2 stages to encrouage retail participation in the stock market. The first stage, which takes effect immediately, allows flexible brokerage sharing at a minimum rate of 40 percent for remisiers. The commission sharing will be fully liberalised in the second stage, effective 1 January 2011.
* “Allow 100 per cent foreign equity participation in corporate finance and financial planning companies compared with the present requirement of at least 30 per cent local shareholding.
* “Islamic banking assets account for 18.8 per cent of Malaysia’s total banking assets while takaful industry assets contribute 7.7 per cent of total insurance and takaful industry assets. To ensure rapid development of financial services, particulalrly in Islmaic finance, the government proposes that the existing tax incentives be extended to 2015.
* “The government is currently at the final stage of completing the study on the implementation of goods and services tax (GST), particularly to identify the social impact of GST on the people. The purpose of this study is to ensure that if GST needs to be implemented to stabilised Government finance, it will not burden the population. “If the government implements GST, it will replace the current sales tax and service tax as well as exemption will be granted to the low income group. The GST rate to be imposed will be lower than the current sales tax and service tax rates.
* “The government needs to ensure that the Malaysian tax system is equitable and able to generate revenue for development purposes. In line with this, the government proposes that a tax of five per cent be imposed on gains from the disposal of real property from 1 January 2010. * Effective Jan 1 2010, government agrees to allow agencies to retain 50 per cent of rentals received while the remaining 50 per cent will be remitted to the government as revenue.
* The Government will implement fuel subsidy management system in early 2010.
* The Government proposes the maximum income tax rate to be further reduced to 26 per cent from 27 per cent effective from the 2010 year of assessment.
* Maximum tax rate for cooperatives will be reduced to 26 per cent while the fixed tax rate for non-resident individuals will be cut to 26 per cent.
* Personal tax relief will be increased to RM9,000 from RM8,000 effective from the 2010 year of assessment.* The Government also proposes income tax on employment income of Malaysians and foreign knowledge workers residing and working in Iskandar Malaysia be imposed at 15 per cent compared with the maximum 26 per cent for the rest of the country.
* Government to launch a scheme in January 2010 that enables EPF contributors to utilise current and future savings in Account 2 to promote house ownership.
* RM14.8 billion is allocated to manage, build and upgrade hospitals and clinics.
* The Government will issue 1Malaysia Sukuk totalling RM3 billion.
* The Government will establish the 1Malaysia Retirement Scheme to be administrated by EPF.
* Employees EPF contributions will be raised again to 11 per cent on a voluntary basis with immediate effect. However, from Jan 1, 2011 employees' EPF contribution will revert to 11 per cent.
* The Government proposes existing personal tax relief of RM6,000 for EPF contributions and life insurance premiums be raised to RM7,000.
* Government allocates RM2.3 billion to build and upgrade infrastructures in rural areas.
* Government provides RM41 million to improve income and quality of life of the Orang Asli Community by implementing various projects.
* Budget 2010 allocations totalled RM191.5 billion, of which RM138.3 billion is for operating expenditure and RM53.2 billion for development expenditure.
* Federal Government revenue in 2010 to decline by 8.4 per cent to RM148.8 billion.
* Budget deficit at 5.6 per cent of GDP compared with 7.4 per cent in 2009. - Bernama/Reuters
2010 BUDGET BUSINESS HIGHLIGHTS
* Malaysia economy to grow 2-3 per cent in 2010
* Mining to grow 1.1 per cent, manufacturing sector 1.7 per cent, agriculture 2.5 per cent, construction 3.2 per cent and service 3.6 per cent.
* Private consumption expand 2.9 per cent while private investment 3.4 per cent
* Per capita income to increase by 2.5 per cent to RM24,661
* TNB to spend RM5 billion to implement electricity generation, transmission and distribution projects in 2010.
* Individual tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012.
* Public-private collaborations to include an integrated immigration, customs and quarantine complex in Bukit Kayu Hitam, construction of six UiTM campuses and the development of MATRADE centre
* 1Malaysia Development Bhd (1MDB) will establish a corporate social responsibility fund totalling RM100 million as a start to finance community activities
* Government to allocate RM899 million to intensify tourism industry.
* Government to enhance tax incentives for healthcare service providers who offer services to foreign health tourists with income tax exemptions of 100 per cent on the value of increased exports from 50 per cent previously.
* Individual taxpayers to be given tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012
* Civil servants are eligible to apply for computer loans once in every three years and up to a maximum of RM5,000 from the government once in every five years
* Formulate Halal Act in collaboration with State Islamic Religious Councils.
* To corporatise the Halal Industry Development Corporation as an agency under MITI* Intensify Halal Certification by the Islamic Development Department of Malaysia (JAKIM) by collaborating with international institutions to obtain standards certification such as HACCP ad GMP.
* To provide RM24 million to develop halal products anti-smuggling system at three entry points and three main ports.
* Allocate RM137 million to upgrade and improve drainage and irrigation infrastructures in paddy fields involving 180,000 farmers.
* To provide RM70 million to build the Paya Peda Dam Project in Terengganu to increase water supply capacity to paddy irrigation scheme in Besut.
* Allocate RM82 million to modernise aquaculture industry and conduct entrepreneurship training scheme for aquaculture breeders with focus on production of fish fry and ornamental fish.
* “The stock market will be further liberalised to enhance its efficiency as well as attract domestic and foreign investment. For this purpose, the government will undertake the following measures: First, liberalise the commission sharing arrangements between stockbrokers and remisiers in 2 stages to encrouage retail participation in the stock market. The first stage, which takes effect immediately, allows flexible brokerage sharing at a minimum rate of 40 percent for remisiers. The commission sharing will be fully liberalised in the second stage, effective 1 January 2011.
* “Allow 100 per cent foreign equity participation in corporate finance and financial planning companies compared with the present requirement of at least 30 per cent local shareholding.
* “Islamic banking assets account for 18.8 per cent of Malaysia’s total banking assets while takaful industry assets contribute 7.7 per cent of total insurance and takaful industry assets. To ensure rapid development of financial services, particulalrly in Islmaic finance, the government proposes that the existing tax incentives be extended to 2015.
* “The government is currently at the final stage of completing the study on the implementation of goods and services tax (GST), particularly to identify the social impact of GST on the people. The purpose of this study is to ensure that if GST needs to be implemented to stabilised Government finance, it will not burden the population. “If the government implements GST, it will replace the current sales tax and service tax as well as exemption will be granted to the low income group. The GST rate to be imposed will be lower than the current sales tax and service tax rates.
* “The government needs to ensure that the Malaysian tax system is equitable and able to generate revenue for development purposes. In line with this, the government proposes that a tax of five per cent be imposed on gains from the disposal of real property from 1 January 2010. * Effective Jan 1 2010, government agrees to allow agencies to retain 50 per cent of rentals received while the remaining 50 per cent will be remitted to the government as revenue.
* The Government will implement fuel subsidy management system in early 2010.
* The Government proposes the maximum income tax rate to be further reduced to 26 per cent from 27 per cent effective from the 2010 year of assessment.
* Maximum tax rate for cooperatives will be reduced to 26 per cent while the fixed tax rate for non-resident individuals will be cut to 26 per cent.
* Personal tax relief will be increased to RM9,000 from RM8,000 effective from the 2010 year of assessment.* The Government also proposes income tax on employment income of Malaysians and foreign knowledge workers residing and working in Iskandar Malaysia be imposed at 15 per cent compared with the maximum 26 per cent for the rest of the country.
* Government to launch a scheme in January 2010 that enables EPF contributors to utilise current and future savings in Account 2 to promote house ownership.
* RM14.8 billion is allocated to manage, build and upgrade hospitals and clinics.
* The Government will issue 1Malaysia Sukuk totalling RM3 billion.
* The Government will establish the 1Malaysia Retirement Scheme to be administrated by EPF.
* Employees EPF contributions will be raised again to 11 per cent on a voluntary basis with immediate effect. However, from Jan 1, 2011 employees' EPF contribution will revert to 11 per cent.
* The Government proposes existing personal tax relief of RM6,000 for EPF contributions and life insurance premiums be raised to RM7,000.
* Government allocates RM2.3 billion to build and upgrade infrastructures in rural areas.
* Government provides RM41 million to improve income and quality of life of the Orang Asli Community by implementing various projects.
* Budget 2010 allocations totalled RM191.5 billion, of which RM138.3 billion is for operating expenditure and RM53.2 billion for development expenditure.
* Federal Government revenue in 2010 to decline by 8.4 per cent to RM148.8 billion.
* Budget deficit at 5.6 per cent of GDP compared with 7.4 per cent in 2009. - Bernama/Reuters
Tuesday, October 13, 2009
Malaysia's Trade August 2009
Malaysia’s August exports down 19.8 per cent versus a year ago
Thursday October 08 2009
KUALA LUMPUR, Oct 8 — Malaysia’s exports in August fell by a larger-than-expected 19.8 per cent from a year ago, government data showed today. Economists polled by Reuters had expected a fall of 17.4 per cent.
“While the global electronics sector is showing recovery signals, a rebound could very well be built on short-term foundations of inventory restocking. We remain conservative in our exports outlook and the latest trade data further affirms that.
"Month-on-month figures saw some correction from the previous positive pace. On monetary policy, Bank Negara is likely to keep to the status quo in the near term given the stage of economic recovery,” said Joanna Tan, an economist with Forecast Pte Ltd.
“While the fall in export value of commodities continued to be the main drag on Malaysian exports, electronics exports should also continue to be lackluster,” said Alvin Liew of Standard Chartered.
“While the export decline is likely to continue easing in late 2009, Malaysia’s manufacturing sector may not be out of the woods yet, especially if the global recovery is prolonged and shallow. A more worrying aspect of sharply declining imports is that they imply that companies may be delaying capital investments.
"This would reduce the capacity of Malaysia’s manufacturing sector in the medium and long term, preventing it from reaping the benefits of an eventual recovery in demand,” he added.
Irvin Seah of DBS said, “I think this is certainly a disappointment and a sober reminder that the path of recovery is never a smooth one and it will be bumpy. Going forward, as long as the longer term trend is upward then there shouldn’t be a big concern.” — Reuters
2009-10-08 10:30 (UTC)
Malaysian August exports disappoint
KUALA LUMPUR, Oct 8 (Reuters) - Malaysia's exports in August
fell by a larger-than-expected 19.8 percent from a year ago, government data showed on Thursday. Economists polled by Reuters had expected a fall of 17.4 percent.
--------------------------------------------------
ANALYST COMMENTS
ALVIN LIEW, ECONOMIST, STANDARD CHARTERED
'While the fall in export value of commodities continued to be the main drag on Malaysian exports, electronics exports should also continue to be lacklustre. 'While the export decline is likely to continue easing in late 2009, Malaysia's manufacturing sector may not be out of the woods yet, especially if the global recovery is prolonged and shallow. A more worrying aspect of sharply declining imports is that they imply that companies may be delaying capital investments. This would reduce the capacity of Malaysia's manufacturing sector in the medium and long term, preventing it
from reaping the benefits of an eventual recovery in demand.'
IRVIN SEAH, ECONOMIST, DBS:
'I think this is certainly a disappointment and a sober reminder that the path of recovery is never a smooth one and it will be bumpy. Going forward, as long as the longer term trend is upward then there shouldn't be a big concern.'
(Reporting by Royce Cheah and Liau Y-Sing)
Malaysia annual export growth slows in August -UPDATE 1-10.08.08, 4:35 AM ET Thomson Financial News
KUALA LUMPUR, Oct 8 (Reuters) - Malaysia's annual export growth slowed more than expected in August, dragged down by electronics and commodities, reflecting problems plaguing Asian economies from the global financial crisis.
Total exports rose 10.6 percent from a year ago, a sharp slowdown from 25.4 percent in July's data and below expectations for a 16.5 percent increase, trade ministry figures showed.
That left exports at 59.58 billion ringgit ($17.07 billion), down from 63.31 billion ringgit in July.
'(It was) Very much in line with what we see throughout the entire region; the global slowdown, which has become particularly pronounced over recent months, is clearly adversely impacting export-dependent Asian economies,' said Dwyfor Evans, economist at State Street Bank and Trust Co.
Earlier leading investment bank CIMB slashed its 2009 growth outlook for Malaysia by 2 percentage points to 3 percent, due to falling crude oil and commodity prices as well as the U.S. economic downturn.
The trade figures showed exports to the United States fell 15 percent from a year ago while electronics exports, which account for almost 40 percent of Malaysia's exports, fell by 1.3 percent to 23.65 billion ringgit.
Malaysia's trade surplus was 12.65 billion ringgit slightly lower than the market forecast of 13.1 billion ringgit.
Another of Malaysia's key exports, palm oil, rose 40.6 percent in August from a year ago but fell 15 percent from July to 4.54 billion ringgit as prices declined.
'Softer commodities exports were probably part of the drag on the export figure after propping up Malaysian exports for the past year. The fall in commodity prices in the middle of this year is one more headwind that Malaysian exporters will not be enjoying,' David Cohen, economist at Action Economics said.
OUTLOOK WORSENING
There were signs of Malaysia's domestic economic slowdown as imports grew by a lower-than-expected 4.2 percent to 46.93 ringgit, while analysts had forecast double-digit growth of 10 percent.
CIMB economist Lee Heng Guie said in a research note that Malaysia's growth would be pressured by the current financial turmoil and relatively high inflation, 'but will likely escape a deep economic downturn given the much stronger economic and financial fundamentals.'
He sees growth of 5.3 percent this year dropping to 3.0 percent in 2009.
($1=3.490 Malaysian Ringgit)
(Reporting by Varsha Tickoo; Editing by Kazunori Takada)
August exports down but recovery momentum intactBy Hamisah Hamid hamisahhamid@nstp.com.my2009/10/09
MALAYSIA'S exports in August fell 19.8 per cent from a year ago, which is worse than expected, but economists said the recovery momentum is intact.A Business Times poll had expected August exports to fall 16.5 per cent."The lower exports in August was in line with regional economies. South Korea, Taiwan and Singapore all had a relapse in August after growing strongly for a few consecutive months," MIDF Research head Zulkifli Hamzah said. Zulkifli said the slowdown in the exports of electrical and electronic goods (E&E) to the US and Europe was probably due to inventory adjustment as orders had been ramped up a few months before August. "The recovery process is intact and Malaysia's gross domestic product is on track to grow again in the fourth quarter 2009," he added.On a month-on-month basis, August exports were down 2 per cent from July while imports also shed 6.6 per cent, resulting in total trade falling 4.1 per cent to RM38.26 billion.The slight fall in August exports was mainly due to the drop in exports of machinery, appliances and parts, jewelry, transport equipment, wood products, iron and steel products and E&E.However, trade surplus in August, at RM9.57 billion, is higher than economists' expectation of about RM8.85 billion.
The International Trade and Industry Ministry (Miti) said total trade for the first eight months contracted 23.3 per cent from the same period last year, to RM617.65 billion. During the period, exports shed 22.8 per cent while imports were down by 23.9 per cent, resulting in trade surplus of RM76.65 billion.RAM chief economist Dr Yeah Kim Leng said August figures reflect a gradual recovery of the country's exports, which is in line with the stabilisation of global demand."Although the improvement is gradual, it signifies that the worst of export slump is behind us." Yeah also expects that the gradual improvement would show a positive year-on-year export growth in December as the exports in December last year was quite low.
Malaysia's exports slump 19.8% in August
KUALA LUMPUR: Malaysia's exports, the mainstay of the economy, plunged 19.8 per cent in August from a year earlier, according to official data Thursday. The trade ministry said in a statement that exports fell to 47.83 billion ringgit (US$14 billion) year-on-year while imports dropped 18.6 per cent to 38.26 billion ringgit, producing a trade surplus of 9.57 billion ringgit. Total trade from January to August was worth 617.65 billion ringgit, a decrease of 23.3 per cent from a year earlier. The ministry said the decline year-on-year was due to lower demand among key trading partners, particularly for iron and steel products as well as electrical and electronic items, which account for one-third of Malaysia's total exports. Malaysia's key export markets are Singapore, China, Japan, Hong Kong and the United States. In July, Malaysian exports fell 22.9 per cent on revised figures. The government has said the export-dependent economy is likely to contract by 4.0-5.0 per cent this year due to the drop-off in exports and manufacturing. In August, the central bank announced that the economy shrank 3.9 per cent in the three months to June year-on-year, in an improved performance from the 6.2 per cent contraction seen in the first quarter. Prime Minister Najib Razak has said the economy had "turned around a corner" and was on track for a recovery despite a second consecutive quarter of negative growth. - AFP/yb
Malaysia trade surplus RM9.57b in August2009/10/08
MALAYSIA recorded a trade surplus of RM9.57 million in August 2009, an increase of 22 percent from a month ago, making it the 142nd consecutive month of surplus since November 1997.In a statement here today, the Statistics Department said total trade in August, however, fell by 4.1 per cent from a month ago to RM86.09 billion.
It said the country's exports decreased by two percent to RM47.83 billion in August compared with July, while imports dropped by 6.6 per cent to RM38.26 billion."The export value in August was the second highest recorded in the first eight months of 2009 despite the decline," it said.The department said during the first eight months of the year, Malaysia's total trade was valued at RM617.65 billion, 23.3 percent lower from the corresponding period of 2008.During the same period, exports fell by 22.8 per cent to RM347.15 billion compared with the same period last year while imports for the period was down by 23.9 per cent to RM270.5 billion.
This resulted in a trade surplus of RM76.65 billion.In August, manufactured exports decreased by 2.1 percent compared with the preceding month, due to the drop in exports of machinery, appliances and parts, jewellery, transport equipment, wood products, iron and steel products as well as electrical and electronic (E&E) products.China, Singapore, US, Japan and Hong Kong were the top five export destinations, accounting for 53.3 per cent of country's total exports in August 2009.
Exports to China rose by 10.3 per cent to RM6.55 billion from July 2009 due to higher exports of crude petroleum and E&E products. Exports in August this year were higher by 0.9 per cent from a year ago.The department said exports to Asean countries dropped to RM12.29 billion from RM12.85 billion a month ago. This accounted for 25.7 per cent of Malaysia's total exports.Year-on-year, exports to Asean fell by 24.4 per cent, mainly due to lower exports of refined petroleum products, E&E products and transport equipment.
Imports decreased by 18.6 per cent to RM38.26 billion in August from a year ago due mainly to the decline in imports of intermediate goods.At the same time, total imports from Asean amounted to RM9.74 billion, or 25.5 per cent, of Malaysia's total imports.As for January-August 2009, the top five export destinations were Singapore (RM47.98 billion), China (RM40.14 billion), US (RM38.94 billion), Japan (RM34.48 billion) and Thailand (RM18.57 billion).Meanwhile, total exports to Asean were valued at RM89.32 billion, or 25.7 per cent, of Malaysia's total exports during the eight-month period. -- BERNAMA
Thursday October 08 2009
KUALA LUMPUR, Oct 8 — Malaysia’s exports in August fell by a larger-than-expected 19.8 per cent from a year ago, government data showed today. Economists polled by Reuters had expected a fall of 17.4 per cent.
“While the global electronics sector is showing recovery signals, a rebound could very well be built on short-term foundations of inventory restocking. We remain conservative in our exports outlook and the latest trade data further affirms that.
"Month-on-month figures saw some correction from the previous positive pace. On monetary policy, Bank Negara is likely to keep to the status quo in the near term given the stage of economic recovery,” said Joanna Tan, an economist with Forecast Pte Ltd.
“While the fall in export value of commodities continued to be the main drag on Malaysian exports, electronics exports should also continue to be lackluster,” said Alvin Liew of Standard Chartered.
“While the export decline is likely to continue easing in late 2009, Malaysia’s manufacturing sector may not be out of the woods yet, especially if the global recovery is prolonged and shallow. A more worrying aspect of sharply declining imports is that they imply that companies may be delaying capital investments.
"This would reduce the capacity of Malaysia’s manufacturing sector in the medium and long term, preventing it from reaping the benefits of an eventual recovery in demand,” he added.
Irvin Seah of DBS said, “I think this is certainly a disappointment and a sober reminder that the path of recovery is never a smooth one and it will be bumpy. Going forward, as long as the longer term trend is upward then there shouldn’t be a big concern.” — Reuters
2009-10-08 10:30 (UTC)
Malaysian August exports disappoint
KUALA LUMPUR, Oct 8 (Reuters) - Malaysia's exports in August
fell by a larger-than-expected 19.8 percent from a year ago, government data showed on Thursday. Economists polled by Reuters had expected a fall of 17.4 percent.
--------------------------------------------------
ANALYST COMMENTS
ALVIN LIEW, ECONOMIST, STANDARD CHARTERED
'While the fall in export value of commodities continued to be the main drag on Malaysian exports, electronics exports should also continue to be lacklustre. 'While the export decline is likely to continue easing in late 2009, Malaysia's manufacturing sector may not be out of the woods yet, especially if the global recovery is prolonged and shallow. A more worrying aspect of sharply declining imports is that they imply that companies may be delaying capital investments. This would reduce the capacity of Malaysia's manufacturing sector in the medium and long term, preventing it
from reaping the benefits of an eventual recovery in demand.'
IRVIN SEAH, ECONOMIST, DBS:
'I think this is certainly a disappointment and a sober reminder that the path of recovery is never a smooth one and it will be bumpy. Going forward, as long as the longer term trend is upward then there shouldn't be a big concern.'
(Reporting by Royce Cheah and Liau Y-Sing)
Malaysia annual export growth slows in August -UPDATE 1-10.08.08, 4:35 AM ET Thomson Financial News
KUALA LUMPUR, Oct 8 (Reuters) - Malaysia's annual export growth slowed more than expected in August, dragged down by electronics and commodities, reflecting problems plaguing Asian economies from the global financial crisis.
Total exports rose 10.6 percent from a year ago, a sharp slowdown from 25.4 percent in July's data and below expectations for a 16.5 percent increase, trade ministry figures showed.
That left exports at 59.58 billion ringgit ($17.07 billion), down from 63.31 billion ringgit in July.
'(It was) Very much in line with what we see throughout the entire region; the global slowdown, which has become particularly pronounced over recent months, is clearly adversely impacting export-dependent Asian economies,' said Dwyfor Evans, economist at State Street Bank and Trust Co.
Earlier leading investment bank CIMB slashed its 2009 growth outlook for Malaysia by 2 percentage points to 3 percent, due to falling crude oil and commodity prices as well as the U.S. economic downturn.
The trade figures showed exports to the United States fell 15 percent from a year ago while electronics exports, which account for almost 40 percent of Malaysia's exports, fell by 1.3 percent to 23.65 billion ringgit.
Malaysia's trade surplus was 12.65 billion ringgit slightly lower than the market forecast of 13.1 billion ringgit.
Another of Malaysia's key exports, palm oil, rose 40.6 percent in August from a year ago but fell 15 percent from July to 4.54 billion ringgit as prices declined.
'Softer commodities exports were probably part of the drag on the export figure after propping up Malaysian exports for the past year. The fall in commodity prices in the middle of this year is one more headwind that Malaysian exporters will not be enjoying,' David Cohen, economist at Action Economics said.
OUTLOOK WORSENING
There were signs of Malaysia's domestic economic slowdown as imports grew by a lower-than-expected 4.2 percent to 46.93 ringgit, while analysts had forecast double-digit growth of 10 percent.
CIMB economist Lee Heng Guie said in a research note that Malaysia's growth would be pressured by the current financial turmoil and relatively high inflation, 'but will likely escape a deep economic downturn given the much stronger economic and financial fundamentals.'
He sees growth of 5.3 percent this year dropping to 3.0 percent in 2009.
($1=3.490 Malaysian Ringgit)
(Reporting by Varsha Tickoo; Editing by Kazunori Takada)
August exports down but recovery momentum intactBy Hamisah Hamid hamisahhamid@nstp.com.my2009/10/09
MALAYSIA'S exports in August fell 19.8 per cent from a year ago, which is worse than expected, but economists said the recovery momentum is intact.A Business Times poll had expected August exports to fall 16.5 per cent."The lower exports in August was in line with regional economies. South Korea, Taiwan and Singapore all had a relapse in August after growing strongly for a few consecutive months," MIDF Research head Zulkifli Hamzah said. Zulkifli said the slowdown in the exports of electrical and electronic goods (E&E) to the US and Europe was probably due to inventory adjustment as orders had been ramped up a few months before August. "The recovery process is intact and Malaysia's gross domestic product is on track to grow again in the fourth quarter 2009," he added.On a month-on-month basis, August exports were down 2 per cent from July while imports also shed 6.6 per cent, resulting in total trade falling 4.1 per cent to RM38.26 billion.The slight fall in August exports was mainly due to the drop in exports of machinery, appliances and parts, jewelry, transport equipment, wood products, iron and steel products and E&E.However, trade surplus in August, at RM9.57 billion, is higher than economists' expectation of about RM8.85 billion.
The International Trade and Industry Ministry (Miti) said total trade for the first eight months contracted 23.3 per cent from the same period last year, to RM617.65 billion. During the period, exports shed 22.8 per cent while imports were down by 23.9 per cent, resulting in trade surplus of RM76.65 billion.RAM chief economist Dr Yeah Kim Leng said August figures reflect a gradual recovery of the country's exports, which is in line with the stabilisation of global demand."Although the improvement is gradual, it signifies that the worst of export slump is behind us." Yeah also expects that the gradual improvement would show a positive year-on-year export growth in December as the exports in December last year was quite low.
Malaysia's exports slump 19.8% in August
KUALA LUMPUR: Malaysia's exports, the mainstay of the economy, plunged 19.8 per cent in August from a year earlier, according to official data Thursday. The trade ministry said in a statement that exports fell to 47.83 billion ringgit (US$14 billion) year-on-year while imports dropped 18.6 per cent to 38.26 billion ringgit, producing a trade surplus of 9.57 billion ringgit. Total trade from January to August was worth 617.65 billion ringgit, a decrease of 23.3 per cent from a year earlier. The ministry said the decline year-on-year was due to lower demand among key trading partners, particularly for iron and steel products as well as electrical and electronic items, which account for one-third of Malaysia's total exports. Malaysia's key export markets are Singapore, China, Japan, Hong Kong and the United States. In July, Malaysian exports fell 22.9 per cent on revised figures. The government has said the export-dependent economy is likely to contract by 4.0-5.0 per cent this year due to the drop-off in exports and manufacturing. In August, the central bank announced that the economy shrank 3.9 per cent in the three months to June year-on-year, in an improved performance from the 6.2 per cent contraction seen in the first quarter. Prime Minister Najib Razak has said the economy had "turned around a corner" and was on track for a recovery despite a second consecutive quarter of negative growth. - AFP/yb
Malaysia trade surplus RM9.57b in August2009/10/08
MALAYSIA recorded a trade surplus of RM9.57 million in August 2009, an increase of 22 percent from a month ago, making it the 142nd consecutive month of surplus since November 1997.In a statement here today, the Statistics Department said total trade in August, however, fell by 4.1 per cent from a month ago to RM86.09 billion.
It said the country's exports decreased by two percent to RM47.83 billion in August compared with July, while imports dropped by 6.6 per cent to RM38.26 billion."The export value in August was the second highest recorded in the first eight months of 2009 despite the decline," it said.The department said during the first eight months of the year, Malaysia's total trade was valued at RM617.65 billion, 23.3 percent lower from the corresponding period of 2008.During the same period, exports fell by 22.8 per cent to RM347.15 billion compared with the same period last year while imports for the period was down by 23.9 per cent to RM270.5 billion.
This resulted in a trade surplus of RM76.65 billion.In August, manufactured exports decreased by 2.1 percent compared with the preceding month, due to the drop in exports of machinery, appliances and parts, jewellery, transport equipment, wood products, iron and steel products as well as electrical and electronic (E&E) products.China, Singapore, US, Japan and Hong Kong were the top five export destinations, accounting for 53.3 per cent of country's total exports in August 2009.
Exports to China rose by 10.3 per cent to RM6.55 billion from July 2009 due to higher exports of crude petroleum and E&E products. Exports in August this year were higher by 0.9 per cent from a year ago.The department said exports to Asean countries dropped to RM12.29 billion from RM12.85 billion a month ago. This accounted for 25.7 per cent of Malaysia's total exports.Year-on-year, exports to Asean fell by 24.4 per cent, mainly due to lower exports of refined petroleum products, E&E products and transport equipment.
Imports decreased by 18.6 per cent to RM38.26 billion in August from a year ago due mainly to the decline in imports of intermediate goods.At the same time, total imports from Asean amounted to RM9.74 billion, or 25.5 per cent, of Malaysia's total imports.As for January-August 2009, the top five export destinations were Singapore (RM47.98 billion), China (RM40.14 billion), US (RM38.94 billion), Japan (RM34.48 billion) and Thailand (RM18.57 billion).Meanwhile, total exports to Asean were valued at RM89.32 billion, or 25.7 per cent, of Malaysia's total exports during the eight-month period. -- BERNAMA
Wednesday, October 7, 2009
Malaysia' trade ..Aug 2009
Wednesday October 7, 2009
Economists still cautious on external trade
By FINTAN NG
PETALING JAYA: Economists remain cautious on Malaysia’s external trade position as restocking continues to be a factor in boosting exports from the country and elsewhere in the region, despite the more positive economic data streaming in from abroad.
Prominent economists Nouriel Roubini and Joseph Stiglitz have in recent days expressed doubt over the sustainability of a faster and more durable global economic recovery.
Furthermore, the US jobless rate in September rose to a 26-year high.
The Statistics Department is expected to release external trade data tomorrow.
Citigroup Inc senior economist Kit Wei Zheng expects improvement in both month-on-month and year-on-year external trade figures for Malaysia.
However, he told StarBiz that the country continued to be a “big laggard” where electrical and electronics (E&E) exports were concerned, compared with Singapore, South Korea, Taiwan and the Philippines, due mainly to supply bottleneck issues that were only now being addressed. E&E products constitute 40% of Malaysia’s exports.
“There’s still some scope for cyclical catch-up to the end of the year and orders have been coming back since late June which, in turn, has given a boost to factory production and exports,” Kit said.
He said the domestic front would play a much bigger role in the country’s economic growth, going forward, with RM4bil to RM5bil already spent in the quarter ended September, mostly in the construction sector.
“This spending added another 0.5 to 0.7 percentage points to gross domestic product growth,” Kit noted.
Both United Overseas Bank Ltd economist Ho Woei Chen and Forecast Pte Ltd economist Joanna Tan said exports could turn positive in the last two months of the year.
But Ho said the improvement in factory output in recent months was largely due to inventory rebuilding.
Tan said the verdict was still out on the sustainability of the rebound, especially in the global E&E sector.
“The rebound could be due to inventory restocking, so we’re still quite cautious,” she said.
Focus on domestic consumption without neglecting world tradeBy Azlan Abu Bakaralan@nstp.com.my2009/10/07
The government wants domestic consumption to drive Malaysia's economic recovery but will not neglect international trade, a minister said yesterday.
Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said measures to increase domestic consumption will be among those to be highlighted in Budget 2010, which will be tabled in Parliament on October 23."We are not saying international trade is not important. In fact, it has grown by more than 200 per cent against our gross domestic product (GDP)," he said, noting that the economic environment is significantly better compared with the first half of 2009.
Nor Mohamed said the government at the same time prefers to increase domestic sources of growth, with contribution from private consumption and private investment to spur the local economy.
He said Malaysia's new economic model will see a reduction in dependence on trade because of its vagaries
.Nor Mohamed said as an open economy, the country is vulnerable to changes in external demand like what is seen now amid the global economic slowdown.
"We want to see domestic demand spur significantly and be our most important economic driver," he told reporters after attending the Statistics Department's Hari Raya Open House in Putrajaya yesterday.
Nor Mohamed noted the government's pump-priming efforts will continue to support growth.The indication is that the public sector's deficit spending will remain a feature of the local economy throughout the 10th Malaysia Plan from 2011-2015.He said as part of efforts to further grow the local economy, the government is looking for a formula how to increase consumer spending.
"It is the government's aspiration to ensure the people are able to enjoy a higher salary, thus help grow the economy."We are looking for a suitable formula as we don't want to chase investors away thinking Malaysia being expensive," he said.The formula will focus more on increasing productivity based on a knowledge-based economy, research and development, and innovation
Economists still cautious on external trade
By FINTAN NG
PETALING JAYA: Economists remain cautious on Malaysia’s external trade position as restocking continues to be a factor in boosting exports from the country and elsewhere in the region, despite the more positive economic data streaming in from abroad.
Prominent economists Nouriel Roubini and Joseph Stiglitz have in recent days expressed doubt over the sustainability of a faster and more durable global economic recovery.
Furthermore, the US jobless rate in September rose to a 26-year high.
The Statistics Department is expected to release external trade data tomorrow.
Citigroup Inc senior economist Kit Wei Zheng expects improvement in both month-on-month and year-on-year external trade figures for Malaysia.
However, he told StarBiz that the country continued to be a “big laggard” where electrical and electronics (E&E) exports were concerned, compared with Singapore, South Korea, Taiwan and the Philippines, due mainly to supply bottleneck issues that were only now being addressed. E&E products constitute 40% of Malaysia’s exports.
“There’s still some scope for cyclical catch-up to the end of the year and orders have been coming back since late June which, in turn, has given a boost to factory production and exports,” Kit said.
He said the domestic front would play a much bigger role in the country’s economic growth, going forward, with RM4bil to RM5bil already spent in the quarter ended September, mostly in the construction sector.
“This spending added another 0.5 to 0.7 percentage points to gross domestic product growth,” Kit noted.
Both United Overseas Bank Ltd economist Ho Woei Chen and Forecast Pte Ltd economist Joanna Tan said exports could turn positive in the last two months of the year.
But Ho said the improvement in factory output in recent months was largely due to inventory rebuilding.
Tan said the verdict was still out on the sustainability of the rebound, especially in the global E&E sector.
“The rebound could be due to inventory restocking, so we’re still quite cautious,” she said.
Focus on domestic consumption without neglecting world tradeBy Azlan Abu Bakaralan@nstp.com.my2009/10/07
The government wants domestic consumption to drive Malaysia's economic recovery but will not neglect international trade, a minister said yesterday.
Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said measures to increase domestic consumption will be among those to be highlighted in Budget 2010, which will be tabled in Parliament on October 23."We are not saying international trade is not important. In fact, it has grown by more than 200 per cent against our gross domestic product (GDP)," he said, noting that the economic environment is significantly better compared with the first half of 2009.
Nor Mohamed said the government at the same time prefers to increase domestic sources of growth, with contribution from private consumption and private investment to spur the local economy.
He said Malaysia's new economic model will see a reduction in dependence on trade because of its vagaries
.Nor Mohamed said as an open economy, the country is vulnerable to changes in external demand like what is seen now amid the global economic slowdown.
"We want to see domestic demand spur significantly and be our most important economic driver," he told reporters after attending the Statistics Department's Hari Raya Open House in Putrajaya yesterday.
Nor Mohamed noted the government's pump-priming efforts will continue to support growth.The indication is that the public sector's deficit spending will remain a feature of the local economy throughout the 10th Malaysia Plan from 2011-2015.He said as part of efforts to further grow the local economy, the government is looking for a formula how to increase consumer spending.
"It is the government's aspiration to ensure the people are able to enjoy a higher salary, thus help grow the economy."We are looking for a suitable formula as we don't want to chase investors away thinking Malaysia being expensive," he said.The formula will focus more on increasing productivity based on a knowledge-based economy, research and development, and innovation
Wednesday, September 9, 2009
Malaysia's ranked 23rd in Doing Business
Malaysia ranked 23rd in Doing Business poll
2009/09/09
MALAYSIA dropped three rungs to rank 23rd out of a total of 183 economies surveyed in the World Bank's Doing Business 2010 Report released today.
Ranked fourth overall in Asia, Malaysia for the third consecutive year became the easiest place to get credit in the world, as well as the cheapest cost in Asia to export per container at US$450, and the second lowest to import at US$450.
Malaysia, placed 24th overall two years ago, was ranked fourth in protecting investors, paying taxes (24), trading across borders (35), closing a business (57), enforcing contracts (59), employing workers (61), registering property (86), starting a business (88) and dealing with construction permits (109).
The World Bank said Malaysia eased business start-up with a new one-stop shop to streamline registration, adding that the service was still new and the government was planning a public awareness campaign about the new system.
In addition, the Malaysian Institute of Chartered Secretaries and Administrators (Maicsa) reduced company incorporation charges and corporate fees. "Enforcing contracts through the courts was made easier by increased staff and stricter deadlines that have shortened case filing times from 45 days to 30.
"In addition, the commercial court has been reorganised to dispose of interlocutory matters more swiftly," the bank said.
Singapore, a consistent reformer, is the top-ranked economy on the ease of doing business for the fourth year in a row, with New Zealand in second place and Hong Kong third. Thailand is ranked third in Asia and 12th in the world, one rung better than the previous year.
Among the other south east asian countries, Vietnam is ranked 93rd, the Philippines 144th, Laos 167th, Indonesia 122nd, Cambodia 145th and Brunei 96th.
The World Bank said Singapore introduced online and computer-based services to ease business start-up, construction permits, and property transfers.According to the "Doing Business 2010:
Reforming through Difficult Times", between June 2008 and May this year, a record 131 of 183 economies around the globe reformed business regulation.Indonesia, the region’s most active reformer, moved up to 122nd spot from 129th on the global ease of doing business rankings.
"Business regulation can affect how well small and midsize firms cope with the crisis and seize opportunities when recovery begins," said Penelope Brook, Acting Vice President for Financial and Private Sector Development at the World Bank Group.
He said the quality of business regulation helps determine how easy it is for troubled firms to survive difficult times and the speed at which local entrepreneurs would star.Other reforms occurred throughout the region, said the report, citing among others China, ranked 89th, which made it easier for domestic firms to trade by relaxing rules on trade credit. - Bernama
Why did we go lower in the world competitiveness ranking?
Making a Point - By Jagdev Singh Sidhu
B>What should we do to make it better?
A FEW years back, an editor from a large Indian newspaper told me that the news from a country that is carried around the world shows what the world thinks of that country.
He was making a point to illustrate how the world was taking India a little more seriously.
Prior to India’s economic boom, he said newspapers from the Western world carried mainly human interest stories from India, the more degrading the better the chance of it seeing print.
If a man had cut off his tongue, then that will be the news from India.
But as India’s economy, society and influence grew, the news the world was reading about India consequently changed.
Countries started carrying news articles about India’s economic prospects, political influence and potential, all of which builds on the perception of India.
And perception of what the world thinks of a country can be a powerful force in the world of business and investment.
That was most recently displayed in Malaysia’s ranking in the World Competitiveness Report.
Our ranking slipped three notches to 24 and that was largely a result of the perception among executives surveyed that Malaysia is worse off than a year ago, in particular the area of institutional framework, which is influenced heavily by the Government.
Whether that is real is debatable but again perception influences decisions.
And if the news the world is reading moulds the perception of a country, what must the world be thinking after reading or watching news from Malaysia over the past one month?
First, there was news that Kartika Sari Dewi Shukarno would receive six lashes of the cane for drinking beer.
Then the world was treated to news that Selangor, the most industrialised and arguably most forward state in the country, was considering a ban on the sale of alcohol.
And finally, we have the emotionally charged cow-head protest over the relocation of a Hindu temple in Shah Alam.
Such news from a moderate and multiracial country would have been surprising to many around the globe, especially to the country’s largest investors.
It could be even more surprising to them considering the news from Malaysia over a decade ago used to be more about its economic prowess and growing political influence.
After all, in a growing and competitive world, perception can influence the flow of money and investments.
And if people, after reading such news, start to form opinions that could negatively influence the perception they have on Malaysia, then such news could have implications on investments into the country.
That is something the country must avoid as it will have consequences on job and wealth creation.
Amidst all the negativity, the one sliver of good news, however, has come from a David vs Goliath case involving McCurry vs McDonald’s.
The eight-year court battle over the right to use the “Mc” prefix has seen the small one-shop curry house in Jalan Ipoh emerge victor against a global franchise giant.
News of the Federal Court’s verdict was flashed all around the world, and in most cases elicited a smile across the faces of many.
It’s the type of reaction Malaysia could do more with.
·Jagdev Singh Sidhu is a deputy news editor at The Star. He thinks we should be concerned about what people think about us.
Thursday September 10, 2009
Malaysia’s lower ranking in competitiveness worries economists
By JAGDEV SINGH SIDHU
They say weaknesses identified by WEF report must be addressed
PETALING JAYA: The slide in Malaysia’s ranking in the World Competitiveness Report is a source of concern and efforts need to be redoubled to correct the weaknesses identified by the report.
“We should use the report as a wake-up call to refocus our efforts to address areas where we have fallen behind,” said RAM Holdings Bhd chief economist Dr Yeah Kim Leng.
The World Economic Forum (WEF) released its World Competitiveness Report 2009/10 on Tuesday that showed Malaysia tumbled three spots from 21 to 24.
The WEF said Malaysia’s decline was more a result of poor assessment of the country’s institutional framework, which has fallen from 17th to 43rd position in two years.
“The institutional environment is determined by the legal and administrative framework within which individuals, firms and governments interact to generate income and wealth in the economy,” said the report.
The other concerns were about security and crime, and the report also voiced concern about the size of Malaysia’s budget deficit.
“There are issues that need to be addressed especially on the budget deficit,” said Affin Investment Bank economist Alan Tan.
Yeah felt that Malaysia needed to look at the Global Competitiveness Report as a gauge to improve its pace. He said there was an urgent need to improve the delivery system of the public sector.
“Even though we’re still undertaking reforms, we are still lagging. We need to accelerate the focus on KPIs (key performance indicators) so that performance would filter down to the operating levels.”
Yeah added that foreign investors would look at the report as a guide on where to place their money. “The higher we are (on the report) the more attractive we will be to foreign investors and the more likely we will be on their radar,” he said.
Yeah, however, said that most foreign investors would perform assessments of their own first before finally making a choice.
“Our ability to attract foreign investors would usually depend on their experience with a particular company at the individual level.”
While the report was not flattering for Malaysia, one economist felt steps taken in recent months under the administration of Datuk Seri Najib Tun Razak were not captured by the report.
“Since the beginning of this year, Najib has come up with initiatives to liberalise the services industry. Also, bumiputra equity requirements for the capital markets were relaxed. I don’t think this has been factored yet,” said United Overseas Bank Ltd economist Ho Woei Chen.
CIMB Investment Bank Bhd economic research head Lee Heng Guie said there was a greater need to increase the Malaysian security system.
“This calls for greater urgency to rectify our competitive disadvantages in key areas such as crime prevention, legal system and investor protection so as to strengthen Malaysia’s position as the preferred investment destination amid the fast catching up of new players,” he said.
Lee added that while Malaysia had stepped up efforts to improve the public sector’s delivery services, foreign investors still ranked the country low in areas facilitating goods market efficiency.
“These include the time and number of procedures required to start a business, prevalence of trade barriers and the intensity of local competition.
“While we reckon that Pemudah (The Special Task Force to Facilitate Business) has achieved commendable progress to improve the delivery services, more needs to be done to undo any inefficiency that stifles private sector initiatives,” he said.
2009/09/09
MALAYSIA dropped three rungs to rank 23rd out of a total of 183 economies surveyed in the World Bank's Doing Business 2010 Report released today.
Ranked fourth overall in Asia, Malaysia for the third consecutive year became the easiest place to get credit in the world, as well as the cheapest cost in Asia to export per container at US$450, and the second lowest to import at US$450.
Malaysia, placed 24th overall two years ago, was ranked fourth in protecting investors, paying taxes (24), trading across borders (35), closing a business (57), enforcing contracts (59), employing workers (61), registering property (86), starting a business (88) and dealing with construction permits (109).
The World Bank said Malaysia eased business start-up with a new one-stop shop to streamline registration, adding that the service was still new and the government was planning a public awareness campaign about the new system.
In addition, the Malaysian Institute of Chartered Secretaries and Administrators (Maicsa) reduced company incorporation charges and corporate fees. "Enforcing contracts through the courts was made easier by increased staff and stricter deadlines that have shortened case filing times from 45 days to 30.
"In addition, the commercial court has been reorganised to dispose of interlocutory matters more swiftly," the bank said.
Singapore, a consistent reformer, is the top-ranked economy on the ease of doing business for the fourth year in a row, with New Zealand in second place and Hong Kong third. Thailand is ranked third in Asia and 12th in the world, one rung better than the previous year.
Among the other south east asian countries, Vietnam is ranked 93rd, the Philippines 144th, Laos 167th, Indonesia 122nd, Cambodia 145th and Brunei 96th.
The World Bank said Singapore introduced online and computer-based services to ease business start-up, construction permits, and property transfers.According to the "Doing Business 2010:
Reforming through Difficult Times", between June 2008 and May this year, a record 131 of 183 economies around the globe reformed business regulation.Indonesia, the region’s most active reformer, moved up to 122nd spot from 129th on the global ease of doing business rankings.
"Business regulation can affect how well small and midsize firms cope with the crisis and seize opportunities when recovery begins," said Penelope Brook, Acting Vice President for Financial and Private Sector Development at the World Bank Group.
He said the quality of business regulation helps determine how easy it is for troubled firms to survive difficult times and the speed at which local entrepreneurs would star.Other reforms occurred throughout the region, said the report, citing among others China, ranked 89th, which made it easier for domestic firms to trade by relaxing rules on trade credit. - Bernama
Why did we go lower in the world competitiveness ranking?
Making a Point - By Jagdev Singh Sidhu
B>What should we do to make it better?
A FEW years back, an editor from a large Indian newspaper told me that the news from a country that is carried around the world shows what the world thinks of that country.
He was making a point to illustrate how the world was taking India a little more seriously.
Prior to India’s economic boom, he said newspapers from the Western world carried mainly human interest stories from India, the more degrading the better the chance of it seeing print.
If a man had cut off his tongue, then that will be the news from India.
But as India’s economy, society and influence grew, the news the world was reading about India consequently changed.
Countries started carrying news articles about India’s economic prospects, political influence and potential, all of which builds on the perception of India.
And perception of what the world thinks of a country can be a powerful force in the world of business and investment.
That was most recently displayed in Malaysia’s ranking in the World Competitiveness Report.
Our ranking slipped three notches to 24 and that was largely a result of the perception among executives surveyed that Malaysia is worse off than a year ago, in particular the area of institutional framework, which is influenced heavily by the Government.
Whether that is real is debatable but again perception influences decisions.
And if the news the world is reading moulds the perception of a country, what must the world be thinking after reading or watching news from Malaysia over the past one month?
First, there was news that Kartika Sari Dewi Shukarno would receive six lashes of the cane for drinking beer.
Then the world was treated to news that Selangor, the most industrialised and arguably most forward state in the country, was considering a ban on the sale of alcohol.
And finally, we have the emotionally charged cow-head protest over the relocation of a Hindu temple in Shah Alam.
Such news from a moderate and multiracial country would have been surprising to many around the globe, especially to the country’s largest investors.
It could be even more surprising to them considering the news from Malaysia over a decade ago used to be more about its economic prowess and growing political influence.
After all, in a growing and competitive world, perception can influence the flow of money and investments.
And if people, after reading such news, start to form opinions that could negatively influence the perception they have on Malaysia, then such news could have implications on investments into the country.
That is something the country must avoid as it will have consequences on job and wealth creation.
Amidst all the negativity, the one sliver of good news, however, has come from a David vs Goliath case involving McCurry vs McDonald’s.
The eight-year court battle over the right to use the “Mc” prefix has seen the small one-shop curry house in Jalan Ipoh emerge victor against a global franchise giant.
News of the Federal Court’s verdict was flashed all around the world, and in most cases elicited a smile across the faces of many.
It’s the type of reaction Malaysia could do more with.
·Jagdev Singh Sidhu is a deputy news editor at The Star. He thinks we should be concerned about what people think about us.
Thursday September 10, 2009
Malaysia’s lower ranking in competitiveness worries economists
By JAGDEV SINGH SIDHU
They say weaknesses identified by WEF report must be addressed
PETALING JAYA: The slide in Malaysia’s ranking in the World Competitiveness Report is a source of concern and efforts need to be redoubled to correct the weaknesses identified by the report.
“We should use the report as a wake-up call to refocus our efforts to address areas where we have fallen behind,” said RAM Holdings Bhd chief economist Dr Yeah Kim Leng.
The World Economic Forum (WEF) released its World Competitiveness Report 2009/10 on Tuesday that showed Malaysia tumbled three spots from 21 to 24.
The WEF said Malaysia’s decline was more a result of poor assessment of the country’s institutional framework, which has fallen from 17th to 43rd position in two years.
“The institutional environment is determined by the legal and administrative framework within which individuals, firms and governments interact to generate income and wealth in the economy,” said the report.
The other concerns were about security and crime, and the report also voiced concern about the size of Malaysia’s budget deficit.
“There are issues that need to be addressed especially on the budget deficit,” said Affin Investment Bank economist Alan Tan.
Yeah felt that Malaysia needed to look at the Global Competitiveness Report as a gauge to improve its pace. He said there was an urgent need to improve the delivery system of the public sector.
“Even though we’re still undertaking reforms, we are still lagging. We need to accelerate the focus on KPIs (key performance indicators) so that performance would filter down to the operating levels.”
Yeah added that foreign investors would look at the report as a guide on where to place their money. “The higher we are (on the report) the more attractive we will be to foreign investors and the more likely we will be on their radar,” he said.
Yeah, however, said that most foreign investors would perform assessments of their own first before finally making a choice.
“Our ability to attract foreign investors would usually depend on their experience with a particular company at the individual level.”
While the report was not flattering for Malaysia, one economist felt steps taken in recent months under the administration of Datuk Seri Najib Tun Razak were not captured by the report.
“Since the beginning of this year, Najib has come up with initiatives to liberalise the services industry. Also, bumiputra equity requirements for the capital markets were relaxed. I don’t think this has been factored yet,” said United Overseas Bank Ltd economist Ho Woei Chen.
CIMB Investment Bank Bhd economic research head Lee Heng Guie said there was a greater need to increase the Malaysian security system.
“This calls for greater urgency to rectify our competitive disadvantages in key areas such as crime prevention, legal system and investor protection so as to strengthen Malaysia’s position as the preferred investment destination amid the fast catching up of new players,” he said.
Lee added that while Malaysia had stepped up efforts to improve the public sector’s delivery services, foreign investors still ranked the country low in areas facilitating goods market efficiency.
“These include the time and number of procedures required to start a business, prevalence of trade barriers and the intensity of local competition.
“While we reckon that Pemudah (The Special Task Force to Facilitate Business) has achieved commendable progress to improve the delivery services, more needs to be done to undo any inefficiency that stifles private sector initiatives,” he said.
Tuesday, September 8, 2009
Malaysia' Trade in July 2009
Malaysia July exports down 22.8pc year-on-year
By Rupa Damodaranrupabanerji@nstp.com.my2009/09/08
MALAYSIAN exports in July fell a better-than-expected 22.8 per cent from a year ago as major economies continued to reel from the global recession and the decline was made worse by the fact that 2008 was a good year for trade.
However, July exports grew 8.4 per cent from June and this is the fifth straight monthly gains this year, on the back of an increase in exports of electrical and electronic products.
According the Ministry of International Trade and Industry (Miti), July's exports of RM48.87 billion was the highest monthly export value so far this year.
"The fifth consecutive monthly gain is one of the positive indicators that the industry is returning to normal levels, as manufacturers were replenishing inventories in anticipation of stronger sales in the second half-year," said AmResearch senior economist Manokaran Mottain.
Compared to a year ago, however, exports declined 22.8 per cent in July while imports were lower by 16 per cent.A Business Times poll expected exports to fall 24 per cent and imports by -21.79 per cent.
Manufactured exports in July increased by 11 per cent compared with June, due mainly to higher exports of E&E products (42.2 per cent), chemicals and chemical products (6.1 per cent), iron and steel products as well as optical and scientific equipment.
Singapore, China, the US, Japan and Hong Kong were the top five export destinations of the month.Compared to June, exports to Asean also increased in July by 6 per cent, mainly due to higher E&E and petroleum products.
Exports to China increased by 14 per cent while exports to the US saw a 10.6 per cent increase due to higher shipments of E&E products.
Exports to the European Union rose 10.5 per cent from June although exports to Japan declined on lower exports of liquefied natural gas and E&E products. Miti said imports rose 14.2 per cent from June.
Mottain said global semiconductor sales rose 5.3 per cent in July from June, reflecting a pick up in demand for products such as netbooks and cell phones, according to the Semiconductor Industry Association (SIA).
July export value highest in first seven months this year
By LEE KIAN SEONG
KUALA LUMPUR: Malaysia’s exports in July fell 22.8% to RM48.87bil while imports declined 16% to RM41.06bil compared with the same month last year.
The total trade registered a decline of 19.9% to RM89.92bil from RM112.2bil in July 2008.
A trade surplus of RM7.81bil was recorded in July, compared with RM14.41bil last year.
Month-on-month, exports were up RM3.79bil or 8.4% in July versus June.
“This was the highest monthly export value recorded in the first seven months this year,” the International Trade and Industry Ministry said in a statement yesterday.
Compared to June, imports were 14.2% higher in July. Imports decreased 16% in July from a year earlier “mainly due to the decline in imports of intermediate goods,” the ministry said.
Imports of intermediate, capital and consumption goods accounted for 68.7%, 14.8% and 7.2% of total imports respectively in July.
The ministry said the total trade in the first seven months was valued at RM531.68bil, down 23.9% against the previous corresponding period.
Manufactured exports in July increased 11% compared with June.
“This was mainly due to higher exports of electrical and electronic (E&E) products, chemicals and chemical products, iron and steel products as well as optical and scientific equipment,” the ministry said.
It said E&E products formed the bulk of exports in July, accounting for 42.2% or RM20.63bil of the total, followed by palm oil (7.3%) and chemicals and chemical products (6.1%).
“Singapore, China, the US, Japan and Hong Kong, which accounted for 52.3% of total exports, were the top five export destinations for Malaysia,” it said.
Exports to Asean rose 6% to RM12.86bil versus June, and accounted for 26.3% of total exports in July.
RAM Holding Bhd chief economist Dr Yeah Kim Leng said the trade figures were within market expectations and the month-on-month growth showed improving demand in the market.
“This is the trend experienced by other countries in the region as well,” he told StarBiz, adding that the pace of contraction was expected to ease further.
He said the market was expected to improve going forward given the rise in the developed economy and the improving confidence level in the market.
Malaysia’s Exports Declined a Less-Than-Forecast 22.8% in July
By Shamim Adam and Michael J. Munoz
Sept. 7 (Bloomberg) -- Malaysia’s exports fell less than economists expected in July as a slump in sales of electrical and electronic goods eased with the global economic recovery.
Overseas shipments dropped 22.8 percent from a year earlier to 48.9 billion ringgit ($13.9 billion) after declining a revised 22.7 percent in June, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 16 economists had been for a 24.4 percent fall. Exports rose 8.4 percent in July from June.
Malaysia’s economy, which entered a recession last quarter, is forecast by the government to resume growth at the end of this year as the world emerges from its worst slump since the Great Depression. The country’s main stock index rose 23 percent last quarter as sales at manufacturers including Malaysian Pacific Industries Bhd. gained from the previous three months.
“Except for a minor glitch in April, which saw a month-on- month decline, exports sales have in fact been rising every month since February,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. “This is clearly indicative of the gradual improvement in the external economic conditions as well as the overall growth outlook of the Malaysian economy.”
Central bank Governor Zeti Akhtar Aziz said last month that the government will revise its forecast for a contraction of as much as 5 percent in gross domestic product this year when it presents the 2010 budget in October, to reflect the improvement in the economy.
Malaysia’s industrial production fell by the least in seven months in June. The economy may return to sustained growth after picking up in the fourth quarter, Trade Minister Mustapa Mohamed said in an Aug. 25 interview.
Ringgit Climbs
The ringgit rose 0.3 percent to 3.5165 per dollar as of 3:09 p.m. in Kuala Lumpur, according to Bloomberg data.
Shipments from Malaysia to Singapore, China and the U.S., its three largest markets, rose in July from a month earlier amid higher electronics and liquefied natural gas sales, the trade ministry said.
“Recovery signs in global and regional economies bode well for Malaysia’s exports recovery in 2010,” said Lee Heng Guie, chief economist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The exports contraction will hit the trough” by the third quarter, he said.
Shipments of electrical and electronics products by companies including Unisem (M) Bhd. fell 15.6 percent in July from a year earlier, compared with a revised 16.9 percent decline in June. Sales of such products rose 10.8 percent last month from June, the report showed.
Surplus Narrows
Malaysia’s imports dropped 16 percent in July from a year earlier to 41.06 billion ringgit, narrowing the trade surplus to 7.81 billion ringgit, the smallest in three months.
“Over the medium term, the continued strength of domestic demand will see imports outpace exports, putting downward pressure on the trade balance,” said Alaistair Chan, an economist at Moody’s Economy.com in Sydney.
Exports fell 23.3 percent to 299.36 billion ringgit in the first seven months while imports contracted 24.7 percent to 232.32 billion ringgit, resulting in a trade surplus of 67.05 billion ringgit, the report showed.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Last Updated: September 7, 2009 06:01 EDT
July’s export a 2009 high, but lower than past year
KUALA LUMPUR, Sept 7 — Malaysia’s exports are showing positive and encouraging signs amid a continued decline due to weak global demand.
Bank Islam senior economist Azrul Azwar Ahmad Tajudin said the year-on-year decline in export for July was less severe than the bank had expected, but the decline in exports remained.
“We still see a sharp decline in export in the next few months,” he told Bernama when asked to comment on the trade figures.
He said Malaysia’s export is likely to see a tentative return to positive territory only towards end of the year.
Bank Islam projected a negative 25.8 per cent decline year-on-year for export in July.
On a year-on-year basis, exports in July decreased by 22.8 per cent to RM48.87 billion, but month-on-month it grew 8.4 per cent. It also was the highest export figure in the first seven months of this year, a statement from the Department of Statistics today said.
On a cumulative basis, exports in the first seven months period decreased by 23.3 per cent to RM299.4 billion, while imports were 24.7 per cent lower at RM232.3 billion.
This resulted in a cumulative trade surplus of RM67 billion for the January to July period, lower than RM81.9 billion registered for the corresponding period of 2008.
Another economist also said that the figures were better than expected.
“Overall, export performance came better than market expectations of -24 per cent (NST poll) and our house forecast of -22.3 per cent,” said Manokaran Mottain, Senior Economist, Economics Research of AmResearch Sdn Bhd.
Manokaran said in July, higher manufactured exports were attributed to stronger export receipts from electrical and electronic (E&E) products, machinery, appliances and parts, optical & scientific equipment, chemicals and chemical products as well as manufactures of metal.
Singapore, China, the US, Japan and Hong Kong were the top five export destinations, accounting for more than 51 per cent of Malaysia’s total exports.
Meanwhile, total imports rebounded by 14.2 per cent month-on-month, largely due to the higher imports of intermediate goods.
Manokaran said as have been expected earlier, regional exports including from Malaysia will be gaining momentum, as reflected by August data on purchasing managers’ index (PMIs), which had strengthened the view of Asia’s recovery in the manufacturing sector.
Global factory business activity expanded in August for the first time since May 2008 in a broad-based revival, witnessed especially in the United States and Japan, a recent survey by JP Morgan showed, he said.
China’s PMI also rose to 54.0 in August from 53.3 in July. The PMIs from elsewhere in this region were also encouraging.
“To some degree, we reckon the economies, which had seen some “stabilisation” earlier are beginning to establish stronger recovery signals head,” he said.
However, for Malaysia, the high-base factor attributed to record commodity prices a year ago, in particular oil prices, would continue to spring surprises this quarter, he said.
“We are expecting stronger improvement beginning October.”
Global semiconductor sales rose 5.3 per cent in July sequentially, reflecting a pick up in demand for products such as netbooks and cell phones, according to the Semiconductor Industry Association (SIA), he noted.
The fifth-consecutive monthly gain is one of the positive indicators that the industry is returning to normalcy levels, as manufacturers replenished inventories in anticipation of stronger sales in the second half-year.
As such, AmResearch believes any sequential increase will be moderately strong given the gradual recovery of demand, he added. — Bernama
KUALA LUMPUR, Sept 7 (Reuters) - Malaysia's exports in July fell by a less-than-expected 22.8 percent from a year ago amid signs that sales to key trading partners are picking up.
Seasonally unadjusted, exports to the United States were up 10.6 percent from June, EU up 10.5 percent and China up 14 percent. Exports to Japan however fell by 4.5 percent.
Overall, exports fell to 48.9 billion ringgit in July on an annual basis but the figure was also the country's highest monthly export value in 2009, the government said.
ANALYST COMMENTS
MATTHEW HILDEBRANDT, ECONOMIST, JP MORGAN: 'In general it looks like pretty decent reports. It's the third consecutive monthly gain in terms of total exports. It shows that Malaysia is performing fairly well (although) with the global economy picking up, trade numbers in Malaysia actually lagged the region.
'Imports have also been strong. The consumer and capital goods data tell you that it's a pretty strong month ... and show signs that domestic demand is picking up along with regional and global demand.'
DAVID COHEN, ECONOMIST, ACTION ECONOMICS
'Decent enough number and pretty much in line with expectations for continued recovery from the lows of the first quarter and parallels the rest of the region which is showing signs of recovery in world trade.
'So Malaysia, just as it went down with everyone else, is also going up with everyone else. It is a nice bounce month-on-month with regard to trade with the US and EU but what this is just the normal seasonal variation.
'The important thing is that the trajectory is showing a solid uptrend since lows of the first quarter and even more credible considering we're seeing Taiwan reporting a strong export figure and later this week the Chinese are going to show good results.'
(Reporting by Royce Cheah, Loh Li Lian and Niluksi Koswanage; Editing by Liau Y-Sing) Keywords: MALAYSIA ECONOMY/TRADE .
By Rupa Damodaranrupabanerji@nstp.com.my2009/09/08
MALAYSIAN exports in July fell a better-than-expected 22.8 per cent from a year ago as major economies continued to reel from the global recession and the decline was made worse by the fact that 2008 was a good year for trade.
However, July exports grew 8.4 per cent from June and this is the fifth straight monthly gains this year, on the back of an increase in exports of electrical and electronic products.
According the Ministry of International Trade and Industry (Miti), July's exports of RM48.87 billion was the highest monthly export value so far this year.
"The fifth consecutive monthly gain is one of the positive indicators that the industry is returning to normal levels, as manufacturers were replenishing inventories in anticipation of stronger sales in the second half-year," said AmResearch senior economist Manokaran Mottain.
Compared to a year ago, however, exports declined 22.8 per cent in July while imports were lower by 16 per cent.A Business Times poll expected exports to fall 24 per cent and imports by -21.79 per cent.
Manufactured exports in July increased by 11 per cent compared with June, due mainly to higher exports of E&E products (42.2 per cent), chemicals and chemical products (6.1 per cent), iron and steel products as well as optical and scientific equipment.
Singapore, China, the US, Japan and Hong Kong were the top five export destinations of the month.Compared to June, exports to Asean also increased in July by 6 per cent, mainly due to higher E&E and petroleum products.
Exports to China increased by 14 per cent while exports to the US saw a 10.6 per cent increase due to higher shipments of E&E products.
Exports to the European Union rose 10.5 per cent from June although exports to Japan declined on lower exports of liquefied natural gas and E&E products. Miti said imports rose 14.2 per cent from June.
Mottain said global semiconductor sales rose 5.3 per cent in July from June, reflecting a pick up in demand for products such as netbooks and cell phones, according to the Semiconductor Industry Association (SIA).
July export value highest in first seven months this year
By LEE KIAN SEONG
KUALA LUMPUR: Malaysia’s exports in July fell 22.8% to RM48.87bil while imports declined 16% to RM41.06bil compared with the same month last year.
The total trade registered a decline of 19.9% to RM89.92bil from RM112.2bil in July 2008.
A trade surplus of RM7.81bil was recorded in July, compared with RM14.41bil last year.
Month-on-month, exports were up RM3.79bil or 8.4% in July versus June.
“This was the highest monthly export value recorded in the first seven months this year,” the International Trade and Industry Ministry said in a statement yesterday.
Compared to June, imports were 14.2% higher in July. Imports decreased 16% in July from a year earlier “mainly due to the decline in imports of intermediate goods,” the ministry said.
Imports of intermediate, capital and consumption goods accounted for 68.7%, 14.8% and 7.2% of total imports respectively in July.
The ministry said the total trade in the first seven months was valued at RM531.68bil, down 23.9% against the previous corresponding period.
Manufactured exports in July increased 11% compared with June.
“This was mainly due to higher exports of electrical and electronic (E&E) products, chemicals and chemical products, iron and steel products as well as optical and scientific equipment,” the ministry said.
It said E&E products formed the bulk of exports in July, accounting for 42.2% or RM20.63bil of the total, followed by palm oil (7.3%) and chemicals and chemical products (6.1%).
“Singapore, China, the US, Japan and Hong Kong, which accounted for 52.3% of total exports, were the top five export destinations for Malaysia,” it said.
Exports to Asean rose 6% to RM12.86bil versus June, and accounted for 26.3% of total exports in July.
RAM Holding Bhd chief economist Dr Yeah Kim Leng said the trade figures were within market expectations and the month-on-month growth showed improving demand in the market.
“This is the trend experienced by other countries in the region as well,” he told StarBiz, adding that the pace of contraction was expected to ease further.
He said the market was expected to improve going forward given the rise in the developed economy and the improving confidence level in the market.
Malaysia’s Exports Declined a Less-Than-Forecast 22.8% in July
By Shamim Adam and Michael J. Munoz
Sept. 7 (Bloomberg) -- Malaysia’s exports fell less than economists expected in July as a slump in sales of electrical and electronic goods eased with the global economic recovery.
Overseas shipments dropped 22.8 percent from a year earlier to 48.9 billion ringgit ($13.9 billion) after declining a revised 22.7 percent in June, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 16 economists had been for a 24.4 percent fall. Exports rose 8.4 percent in July from June.
Malaysia’s economy, which entered a recession last quarter, is forecast by the government to resume growth at the end of this year as the world emerges from its worst slump since the Great Depression. The country’s main stock index rose 23 percent last quarter as sales at manufacturers including Malaysian Pacific Industries Bhd. gained from the previous three months.
“Except for a minor glitch in April, which saw a month-on- month decline, exports sales have in fact been rising every month since February,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. “This is clearly indicative of the gradual improvement in the external economic conditions as well as the overall growth outlook of the Malaysian economy.”
Central bank Governor Zeti Akhtar Aziz said last month that the government will revise its forecast for a contraction of as much as 5 percent in gross domestic product this year when it presents the 2010 budget in October, to reflect the improvement in the economy.
Malaysia’s industrial production fell by the least in seven months in June. The economy may return to sustained growth after picking up in the fourth quarter, Trade Minister Mustapa Mohamed said in an Aug. 25 interview.
Ringgit Climbs
The ringgit rose 0.3 percent to 3.5165 per dollar as of 3:09 p.m. in Kuala Lumpur, according to Bloomberg data.
Shipments from Malaysia to Singapore, China and the U.S., its three largest markets, rose in July from a month earlier amid higher electronics and liquefied natural gas sales, the trade ministry said.
“Recovery signs in global and regional economies bode well for Malaysia’s exports recovery in 2010,” said Lee Heng Guie, chief economist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The exports contraction will hit the trough” by the third quarter, he said.
Shipments of electrical and electronics products by companies including Unisem (M) Bhd. fell 15.6 percent in July from a year earlier, compared with a revised 16.9 percent decline in June. Sales of such products rose 10.8 percent last month from June, the report showed.
Surplus Narrows
Malaysia’s imports dropped 16 percent in July from a year earlier to 41.06 billion ringgit, narrowing the trade surplus to 7.81 billion ringgit, the smallest in three months.
“Over the medium term, the continued strength of domestic demand will see imports outpace exports, putting downward pressure on the trade balance,” said Alaistair Chan, an economist at Moody’s Economy.com in Sydney.
Exports fell 23.3 percent to 299.36 billion ringgit in the first seven months while imports contracted 24.7 percent to 232.32 billion ringgit, resulting in a trade surplus of 67.05 billion ringgit, the report showed.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Last Updated: September 7, 2009 06:01 EDT
July’s export a 2009 high, but lower than past year
KUALA LUMPUR, Sept 7 — Malaysia’s exports are showing positive and encouraging signs amid a continued decline due to weak global demand.
Bank Islam senior economist Azrul Azwar Ahmad Tajudin said the year-on-year decline in export for July was less severe than the bank had expected, but the decline in exports remained.
“We still see a sharp decline in export in the next few months,” he told Bernama when asked to comment on the trade figures.
He said Malaysia’s export is likely to see a tentative return to positive territory only towards end of the year.
Bank Islam projected a negative 25.8 per cent decline year-on-year for export in July.
On a year-on-year basis, exports in July decreased by 22.8 per cent to RM48.87 billion, but month-on-month it grew 8.4 per cent. It also was the highest export figure in the first seven months of this year, a statement from the Department of Statistics today said.
On a cumulative basis, exports in the first seven months period decreased by 23.3 per cent to RM299.4 billion, while imports were 24.7 per cent lower at RM232.3 billion.
This resulted in a cumulative trade surplus of RM67 billion for the January to July period, lower than RM81.9 billion registered for the corresponding period of 2008.
Another economist also said that the figures were better than expected.
“Overall, export performance came better than market expectations of -24 per cent (NST poll) and our house forecast of -22.3 per cent,” said Manokaran Mottain, Senior Economist, Economics Research of AmResearch Sdn Bhd.
Manokaran said in July, higher manufactured exports were attributed to stronger export receipts from electrical and electronic (E&E) products, machinery, appliances and parts, optical & scientific equipment, chemicals and chemical products as well as manufactures of metal.
Singapore, China, the US, Japan and Hong Kong were the top five export destinations, accounting for more than 51 per cent of Malaysia’s total exports.
Meanwhile, total imports rebounded by 14.2 per cent month-on-month, largely due to the higher imports of intermediate goods.
Manokaran said as have been expected earlier, regional exports including from Malaysia will be gaining momentum, as reflected by August data on purchasing managers’ index (PMIs), which had strengthened the view of Asia’s recovery in the manufacturing sector.
Global factory business activity expanded in August for the first time since May 2008 in a broad-based revival, witnessed especially in the United States and Japan, a recent survey by JP Morgan showed, he said.
China’s PMI also rose to 54.0 in August from 53.3 in July. The PMIs from elsewhere in this region were also encouraging.
“To some degree, we reckon the economies, which had seen some “stabilisation” earlier are beginning to establish stronger recovery signals head,” he said.
However, for Malaysia, the high-base factor attributed to record commodity prices a year ago, in particular oil prices, would continue to spring surprises this quarter, he said.
“We are expecting stronger improvement beginning October.”
Global semiconductor sales rose 5.3 per cent in July sequentially, reflecting a pick up in demand for products such as netbooks and cell phones, according to the Semiconductor Industry Association (SIA), he noted.
The fifth-consecutive monthly gain is one of the positive indicators that the industry is returning to normalcy levels, as manufacturers replenished inventories in anticipation of stronger sales in the second half-year.
As such, AmResearch believes any sequential increase will be moderately strong given the gradual recovery of demand, he added. — Bernama
KUALA LUMPUR, Sept 7 (Reuters) - Malaysia's exports in July fell by a less-than-expected 22.8 percent from a year ago amid signs that sales to key trading partners are picking up.
Seasonally unadjusted, exports to the United States were up 10.6 percent from June, EU up 10.5 percent and China up 14 percent. Exports to Japan however fell by 4.5 percent.
Overall, exports fell to 48.9 billion ringgit in July on an annual basis but the figure was also the country's highest monthly export value in 2009, the government said.
ANALYST COMMENTS
MATTHEW HILDEBRANDT, ECONOMIST, JP MORGAN: 'In general it looks like pretty decent reports. It's the third consecutive monthly gain in terms of total exports. It shows that Malaysia is performing fairly well (although) with the global economy picking up, trade numbers in Malaysia actually lagged the region.
'Imports have also been strong. The consumer and capital goods data tell you that it's a pretty strong month ... and show signs that domestic demand is picking up along with regional and global demand.'
DAVID COHEN, ECONOMIST, ACTION ECONOMICS
'Decent enough number and pretty much in line with expectations for continued recovery from the lows of the first quarter and parallels the rest of the region which is showing signs of recovery in world trade.
'So Malaysia, just as it went down with everyone else, is also going up with everyone else. It is a nice bounce month-on-month with regard to trade with the US and EU but what this is just the normal seasonal variation.
'The important thing is that the trajectory is showing a solid uptrend since lows of the first quarter and even more credible considering we're seeing Taiwan reporting a strong export figure and later this week the Chinese are going to show good results.'
(Reporting by Royce Cheah, Loh Li Lian and Niluksi Koswanage; Editing by Liau Y-Sing) Keywords: MALAYSIA ECONOMY/TRADE .
Tuesday, September 1, 2009
CEO say...Trade fairs going the way of dinosaurs?
Trade fairs going the way of dinosaurs?
By Noharuddin Nordin
Published: 2009/09/01
International trade fairs, after more than 150 years of existence, are still relevant and effective tool for trade promotion, says Matrade CEO
INTERNATIONAL trade fairs have been an integral part of global marketing, dating back to more than one and a half century, when the inaugural World's Fair was held in the Crystal Palace, London in 1851.
One might question the relevance of exhibitions when doing business online or over the Internet seemed much faster, easier and cheaper. Many have found out, however, that the truth is often to the contrary. Sifting through the Internet looking for relevant leads in between checking emails, making calls and dealing with personnel issues can turn out to be more time consuming that normally assumed.
By Noharuddin Nordin
Published: 2009/09/01
International trade fairs, after more than 150 years of existence, are still relevant and effective tool for trade promotion, says Matrade CEO
INTERNATIONAL trade fairs have been an integral part of global marketing, dating back to more than one and a half century, when the inaugural World's Fair was held in the Crystal Palace, London in 1851.
However, are they still relevant as the advent of the Internet and other developments in information and telecommunications technology such as video conferencing and virtual exhibitions have provided more options for the marketers?
The answer is quite straight forward, despite the excitement and fanfare of virtual exhibitions during the dot.com boom era of the late 1990's, major international trade fairs such as Anuga, Cebit, Automekanika, Sial, Ambiente have continued to attract both exhibitors and trade visitors over the years.
Although there are trade fairs that have lost their relevance, new trade fairs far outnumber the ones that have been discontinued. This is true even in Malaysia.
One might question the relevance of exhibitions when doing business online or over the Internet seemed much faster, easier and cheaper. Many have found out, however, that the truth is often to the contrary. Sifting through the Internet looking for relevant leads in between checking emails, making calls and dealing with personnel issues can turn out to be more time consuming that normally assumed.
Imagine the number of websites or portals one has to go through to obtain the best products or services, quotes and prices.Consider the alternative of the trade fairs where the old and trusted face-to-face way of doing business is still possible. The personal touch is still very important in concluding a deal even during these modern times. Exhibition is the only marketing medium that brings together buyers, sellers and product/service providers together at the same time and under one roof.
All these people have complementary objectives. Therefore, even though it entails one leaving the office, it makes sense to exhibit or visit the exhibitions.
Many important goals can be met through participating in or visiting trade fairs, including looking for new products and services, collecting information on products and services, buying and selling products and services, learning about industry trends and building network.
Everyone is there to conduct business.There is enough argument to conclude that trade fairs continue to be relevant in this day and age but how can Malaysian exporters take advantage and make the most of participation in trade fairs?
Many exhibitors just target only the exhibition itself, focusing on what to do or promote during the exhibition. While this is important and cannot be ignored, much of the preparations should start well before that, even up to a year before the identified event.
Some trade shows are extremely popular and space bookings may have to made well in advance, sometimes even years ahead.
Effort must also be made to identify which trade show is the best event for you to participate in. In this regard, some trade shows have audited records of exhibitor and visitor profiles of previous year's events, which could provide useful insights.
Many established trade shows need advance bookings just to obtain space, let alone a good location. Other advance preparations would also have to begin well before the event. This will involve getting the brochures redone or reprinted featuring products that are relevant to the specific market, preferably in the language of the targeted market. In doing the translation it is a good idea to translate into the language of the country concerned and get a different person to translate it back into English. This will ascertain that the intended message is not "lost in translation".
Many major trade show organisers have websites that contain pre-show information that also includes details of trade show exhibitors. You should take advantage of this facility as many potential buyers visit the show organiser's website to pre-qualify the exhibitors that they would like to meet during the exhibition.
Trade show exhibitors should also ensure that their product profile is targeted for the specific trade show, and should also include the website of your organisation. Also, it is necessary to ensure that your products or services are listed correctly in the index of the show directory so that potential buyers looking for a specific product are able to locate you, as many key buyers with limited time visit only pre-qualified exhibitors.
Advertising in the show directory will also help you to increase your visibility among buyers going through the show directory.
Other pre-event publicity that could be undertaken may include making reference to your participation in the trade show on your own website, so that potential buyers are aware of your participation in a major trade fair.
It is also a good idea to write to potential pre-qualified visitors in advance of the show and to invite them to visit your booth at the exhibition.
Enquire also whether a mailing list of past trade visitors are available from the show organiser.
Stand display is another area that should be emphasised to attract traffic to your booth. The display could also help in branding the exhibiting company.
If necessary, use the services of a professional in displaying the exhibits to have maximum impact.
In major trade fairs, which sometimes may have a few thousand exhibitors the visual merchandising can have an impact on visitor traffic. Also do remember to bring sufficient business cards and corporate brochures. Many exhibitions also feature daily show newsletters and exhibitors could often get free coverage in these newsletters, particularly if the product is unique and has news value.
As these newsletters are distributed to trade visitors it helps exhibitors to attract attention to their participation.
The media is also often present, and this is an excellent opportunity to get free coverage in the local media such as newspapers and television. However, it is often necessary to proactively seek out media coverage and be prepared in advance to speak to the media.
It has been noted that Malaysian exhibitors are reluctant to be featured in the local media, perhaps due to lack of preparation to meet the media.It is also critical that the right personnel be chosen to man the booth.
It is often sad to observe that, having spent thousands of Ringgit to participate in a trade fair, the booth of Malaysian companies are sometimes manned by people who are inactive, just waiting in their booth for someone to walk in.
Personnel manning the booth should be proactive, lively and eager to welcome visitors to their booths.
Punctuality is also important and never leave the booth unattended, as this will create a negative impression among visitors who may happen to pass by your booth during your absence.
Proper record keeping is also important in ensuring that effective follow-up is undertaken after the trade fair.
In many exhibitions, it may be possible to rent scanners to collect trade visitor's profile by scanning the visitor's badges during the exhibition.
In addition, it is critical that adequate notes be made of a trade visitor's sourcing requirements as well as comments that could be useful feedback for product development or adaptation of your product to a specific market.
Shipping terms and conditions should also be particularly noted when quoting prices, as this is often an area of potential dispute.While at the trade fair, particularly if there are two representatives from your company, it is advisable for one of the representatives to spend some time to evaluate the competition in terms of pricing, product development, design, innovation, etc and benchmarking your products with that of the competition.
Many trade shows also have new product launches and it is worth noting what's new in the marketplace. In addition, many trade shows also offer seminars relating to the latest trends, regulatory environment, standards and other developments relating to the product sector covered by the show, and this could provide useful insights on product trends and innovation.
Many of these seminars are free or subject to only a nominal fee. For example, in the International Home and Housewares Show in Chicago, very informative presentations on the colours for household products for the next buying season is often held, and this will be useful information for export planning.
Make it a point to drop a personalised "thank you note" to all trade visitors that visited your booth, even if they are not immediate prospects.
At the very least, the note will remind them of your company and products and help create a positive image for your company and brand name. It will also make your organisation stand out among the hundreds of booths that the trade visitor may have visited during the show. Also, immediately after the show follow-up on any promises made to the trade visitors such as forwarding price quotes, samples, etc.
Even better, call or e-mail your office to follow-up while you are still at the show and your prospects will be impressed to see that the information you promised has already reached them by the time they return to their offices.
In major international trade fairs, Matrade organises the participation of Malaysian companies in the form of national Pavilions. Among the international trade fairs that Matrade had or will have a presence in the form of a Pavilion for the year 2009 include Arab Health, Paperworld, Gulf Food, Cebit Germany, Semicon China, I Saloni (Furniture), Hong Kong Houseware Show and Who's Next (Fashion).
Malaysian SMEs may apply to Matrade to be considered for a 50 per cent reimbursable matching grant for eligible expenses relating to their international trade fair participation, under the Market Development Grant (MDG) or Services Export Fund (SEF).
Please refer to the Matrade website www.matrade.gov.my for further details on this.
In conclusion, international trade fairs, after more than 150 years of existence, are still relevant and effective tool for trade promotion, as there is nothing like personal face-to-face contacts in export promotion, particularly with the increasing focus in relationship marketing and brand building.
Nevertheless, the outcome of the exhibition will to a large extend depend on the preparation that are put into the show and, more importantly, the effectiveness of follow-up action on the trade leads generated at the fair.* Datuk Noharuddin Nordin is the chief executive officer of Malaysian External Trade Development Corporate (Matrade).
Wednesday, August 26, 2009
CEO said.. Time to invest in Non-traditional mart
KUALA LUMPUR, Aug 13 (Bernama) -- The global economic downturn has further strengthened the importance of reinforcing trade and business relationships with the non-traditional partners such as Central Asian countries.
Malaysia External Trade Development Corp (Matrade) chief executive officer, Datuk Noharuddin Nordin, said previously, it was purely developed countries but over the last decade or so the corporation has managed to penetrate new and emerging markets."Although the share is relatively small, the trend is growing among the Malaysian business community.
"The emerging markets have become more relevant as traditional markets like the US, Europe and Japan are facing economic difficulties," he told Bernama on the sidelines of the seminar on "Business Opportunities in Uzbekistan" here Thursday.
Noharuddin said Uzbekistan has experienced tremendous growth although in terms of absolute value it was still small."It is a double land-locked country. You can't talk about direct export to this country, so, look at other modes and leverage on the central location of Uzbekistan vis-a-vis other countries in the region," he said.
He said Uzbekistan's gross domestic product grew by 8.2 percent in the first half of 2009 and for 2008 it was nine percent."We are encouraging Malaysian companies to look at the possibilities of investing in the country as it is rich in minerals and agriculture products," he said.
Bilateral trade between Malaysia and Central Asia region has recorded encouraging growth.Over the past five years, it rose by about four-fold to US$125.52 million (US$1=RM3.49) in 2008.Malaysia recorded more than five-fold increase in exports to the region to US$121.58 million last year.
In 2008, total trade with Uzbekistan represented 36.2 percent of Malaysia's total trade with the region, valued at US$45.48 million.Malaysia's exports, valued at US$43.07 million in 2008, consisted of palm and vegetable oils, motor vehicle parts and electric and electronic parts and components.--BERNAMA
Malaysia's Trade Performance To Be Positive Year EndBy: Ramjit-->
KUALA LUMPUR, Aug 25 (Bernama) --
KUALA LUMPUR, Aug 25 (Bernama) --
Malaysia's trade performance is expected to seen an upward trend end of this year in line with the positive indications of production from several multinational organisations.
International Trade and Industry Minister, Datuk Mustapa Mohamad said the ministry had received reports from Japanese companies of an increase in their production for the first six months of this year compared with last year.
"In the last two, three months there have been an increase in exports and in June the rise was about five percent from May.
In June, the figure was the highest recorded for the year," he said."The rise in petroleum price also contributed to the increase in trade performance," he told reporters after distributing packages of bubur lambuk to the ministry's staff here on Tuesday.
A rise in the price of crude palm oil and the stable rubber prices also contributed to the better performance.
Mustapa said electrical and electronic products are expected to be the major contributors to Malaysia's exports end of the year.
Other leading exports this year include crude and processed petroleum, natural gas, crude palm oil and rubber.Malaysia recorded a trade surplus of RM9.12 billion in June this year, making it the 140th consecutive month of trade surplus since 1997.
Total trade in June this year rose 7.0 per cent to RM81.09 bilion
.The country's exports rose 5.1 per cent to RM45.01 billion in June compared with May which recorded RM42.92 billion.
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