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9th February, 2010
KUALA LUMPUR: The slump in exports may soon be a thing of the past, if the 18.7 per cent year-on-year surge in December last year, the first double-digit growth since September 2008, is anything to go by.
The stronger-than-forecast trade rebound of 12.5 per cent may be a sign that the effects of the economic recovery could have filtered down earlier than expected, said OSK Research in its Malaysian Equity Investment Research.
Besides the low-base effect, it said the sharp rebound was mainly due to surging exports of electrical and electronics (+33.3 per cent), crude petroleum (+77.2 per cent), refined petroleum (+37.5 per cent) and chemicals and chemical products (+31.6 per cent).
Except for liquefied natural gas (-36.2 per cent) and wood (-0.2 per cent), all other categories registered robust growth, it said.
In tandem with increased exports, imports surged 23.3 per cent year-on-year, beating consensus estimates of a 21.5 per cent rise. Intermediate goods, accounting for 66.4 per cent of total imports, turned positive with a growth of 18.8 per cent vs -4.4 per cent in November 2009.
Both exports and imports grew by 9.2 per cent and 3.4 per cent month-on-month respectively. However, for the whole year, both exports and imports shrank 16.6 per cent, resulting in a total trade surplus of RM118.4 billion.
The year-on-year substantial rebound in exports were mainly led by China (+99.3 per cent), Hong Kong (+49.9 per cent), Thailand (+64.0 per cent) and Singapore (20.2 per cent).
Exports to the US and Japan continued to contract at 0.5 per cent and 33.3 per cent respectively.
“If the current trend persists, we believe the Asean region will be the main driver of external trade growth.
Although Japan and the US remained the top five export destinations for Malaysia, it may one day be taken over by the Asean region,” said OSK Research.
The turnaround in exports could also support a general expectation of a Growth Domestic Product (GDP) growth turnaround in the fourth quarter of 2009, said Kenanga Research in a separate note.
With support from improving domestic demand, it estimated the GDP to rebound to 2.8 per cent in the fourth quarter of 2009.
It said export growth momentum would continue at least in the first half of 2010 on the back of stronger demand pick up for electric and electrical goods and global economic recovery.
“Given the higher base in the second half of this year along with an anemic global recovery, we expect it would weigh on exports growth upside for the whole of 2010 which is forecast to rebound to 3.0-,” it added.
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