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