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.
Wednesday, September 9, 2009
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).
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