MARKET DEVELOPMENT
Sustained Export Growth Despite Decline in March
Sustained Export Growth Despite Decline in March
09/05/2014 (The Sun Daily) - BIMB Securities Research said Malaysia's exports growth is still strong although exports declined slightly in March after three consecutive months of double digit year-on-year growth, pointing to a sustained momentum in export growth.
Exports in March came in below consensus and its own forecast but trade surplus that month was significantly higher than expected. Malaysia's total trade for January-March 2014 was valued at RM349.4 billion, an increase of 8.3% from the corresponding period in 2013.
Exports rose by 10.9% to RM187.9 billion while imports expanded by 5.5% to RM161.5 billion. Trade surplus of RM26.4 billion were recorded for the period.
Significant expansion in trade was recorded over the past three months of the year with China seeing an increase of 8.7%; Asean 4%; Japan 6%; the European Union 4.3% and the USA 5.1%. Other countries which registered expansion in trade with Malaysia were Australia 29.8%; Taiwan 27.3%; Hong Kong 25.2%; Korea 9.7% and the United Arab Emirates 18.3%.
The manufacturing sector supported exports in the first three months of this year, with exports of manufactured goods in January-March 2014 increasing by 13.0% to RM125 billion, accounting for 66.5% of total exports. The increase in exports of manufactured goods was due mainly to higher exports of electrical and electronic (E&E) products, by 12.5%.
BIMB Securities opined that the global semiconductor sector is riding on the wave of a strong global demand and as such, it expects the country's E&E exports to stay strong as well, considering growing demand internationally.
The global semiconductor market has demonstrated consistent momentum in recent months, and sales are well ahead of last year's pace through the first quarter of 2014 and this augurs well for Malaysia's E&E exports.
Other sectors also contributed to higher exports in 1Q14. Exports of mining goods rose by 9.2% or RM3.7 billion to RM44.4 billion, contributed by higher exports of liquefied natural gas which increased by 15.8%. Exports of agricultural goods increased by 2.0% or RM340.8 million to RM17 billion with exports of palm oil increased by 3.9%, contributed mainly by higher price.
BIMB Securities opined that in comparison to Asean and China trade figures for March, Malaysia's external trade, in particular exports, did very well.
"Although Malaysia's gross domestic product (GDP) growth would be partly weighed down by rising price pressure and fiscal consolidation we believe that it will be mitigated by recovery in exports," BIMB Securities said in its note yesterday.
The 1Q 2014 GDP is due to be release on May 16 and it believes that external trade would be one of the significant contributors to the growth.
BIMB Securities expects GDP to expand at a faster rate of 5.2% in 2014, from a moderate 4.7% in 2013.
Exports in March came in below consensus and its own forecast but trade surplus that month was significantly higher than expected. Malaysia's total trade for January-March 2014 was valued at RM349.4 billion, an increase of 8.3% from the corresponding period in 2013.
Exports rose by 10.9% to RM187.9 billion while imports expanded by 5.5% to RM161.5 billion. Trade surplus of RM26.4 billion were recorded for the period.
Significant expansion in trade was recorded over the past three months of the year with China seeing an increase of 8.7%; Asean 4%; Japan 6%; the European Union 4.3% and the USA 5.1%. Other countries which registered expansion in trade with Malaysia were Australia 29.8%; Taiwan 27.3%; Hong Kong 25.2%; Korea 9.7% and the United Arab Emirates 18.3%.
The manufacturing sector supported exports in the first three months of this year, with exports of manufactured goods in January-March 2014 increasing by 13.0% to RM125 billion, accounting for 66.5% of total exports. The increase in exports of manufactured goods was due mainly to higher exports of electrical and electronic (E&E) products, by 12.5%.
BIMB Securities opined that the global semiconductor sector is riding on the wave of a strong global demand and as such, it expects the country's E&E exports to stay strong as well, considering growing demand internationally.
The global semiconductor market has demonstrated consistent momentum in recent months, and sales are well ahead of last year's pace through the first quarter of 2014 and this augurs well for Malaysia's E&E exports.
Other sectors also contributed to higher exports in 1Q14. Exports of mining goods rose by 9.2% or RM3.7 billion to RM44.4 billion, contributed by higher exports of liquefied natural gas which increased by 15.8%. Exports of agricultural goods increased by 2.0% or RM340.8 million to RM17 billion with exports of palm oil increased by 3.9%, contributed mainly by higher price.
BIMB Securities opined that in comparison to Asean and China trade figures for March, Malaysia's external trade, in particular exports, did very well.
"Although Malaysia's gross domestic product (GDP) growth would be partly weighed down by rising price pressure and fiscal consolidation we believe that it will be mitigated by recovery in exports," BIMB Securities said in its note yesterday.
The 1Q 2014 GDP is due to be release on May 16 and it believes that external trade would be one of the significant contributors to the growth.
BIMB Securities expects GDP to expand at a faster rate of 5.2% in 2014, from a moderate 4.7% in 2013.