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 .