Malaysia's 2H2014 export growth seen tapering - Maybank

by **Cals** Tue 10 Jun 2014, 03:13

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 09 June 2014 11:12

KUALA LUMPUR (June 9): Maybank Investment Bank Bhd says despite robust April external trade data, Malaysia's export growth is expected to taper in the second half of 2014.

The Statistics Department, which released the external trade figures last Friday, reported that exports grew 18.9% to RM66.37 billion in April 2014 from a year earlier, beating market forecast as sales of major goods to crucial destinations increased.

Imports grew 5% to RM57.5 billion on higher purchases of capital and consumption goods, which offset the impact of a decline in intermediate item buys.

Today, Maybank said in a note: “Robust export figures so far this year reflect a combo of low-base effect (contractions in 1H2013 before rebound in 2H2013), and translation gains from weak ringgit in early-2014.”

Globally, Maybank said economic expansion was modest and uneven, which might result in tapered export growth for Malaysia in 2H2014.

However, the research house noted that global manufacturing and trade growth momentum remained positive despite the unevenness as seen from a rise in the global manufacturing purchasing managers index (PMI) in May 2014 to 52.2 from 51.9 in the preceding month.

“A major factor for this is the further gains in the US following the pick-up in the Institute of Supply Management’s manufacturing PMI (May 2014: 55.4; Apr 2014: 54.9) after the weather-related dip in 1Q2014,” said Maybank.

Elsewhere, Maybank said the Euro zone showed sustained recovery in its PMI, amid strong expansion in the UK. Meanwhile, the PMI of large emerging economies such as China remained lacklustre.