Malaysia's Trade in October 2009

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.