Affin Hwang Capital Research Highlights

Author: kltrader   |   Latest post: Wed, 15 May 2019, 9:22 AM


Malaysia Trade - Exports Slowed Sharply to 1.6% Yoy in November

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Export of Key E&E Products Declined by 1.7% Yoy in November

Malaysia’s exports slowed sharply from 17.7% yoy in October to 1.6% in November, significantly lower than market expectations of a 6.6% increase. Exports of electrical & electronic (E&E) products, which accounted for 36.8% of total exports, fell into negative territory for the first time since March 2018, declining by 1.7% yoy in November (23.3% in October), its weakest growth rate since July 2016. The decline in exports of E&E was due to lower demand for parts and accessories for office machines (-21.9%) and electrical apparatus and parts (-1.8%), as well as slower growth in exports of thermionic valves & tubes and photocells (2.7%), and telecommunications equipment, parts and accessories (5.7%), and was in line with the slowdown in global semiconductor sales, which slowed to 9.8% yoy in November (from 12.8% in October) based on the latest report by the Semiconductor Industry Association (SIA).

Also weighing on manufactured goods were falls in exports of manufactures of metals (-3.5%) and machinery and appliances (-0.4%). However, export growth of manufactured goods, which registered positive increases, was reflected in refined petroleum products (41.2%), chemicals and chemical products (15.1%) and optical and scientific equipment (10.5%) in November.

Supporting exports of mining goods was healthy demand for liquefied natural gas (LNG), which recorded a double-digit growth rate for the second consecutive month, by 26.4% yoy in November (38.8% in October). In addition, exports of crude petroleum also expanded but at a slower pace of 17.7% yoy in November (32.8% in October), supported by positive growth in average unit value (AUV).

Slower Demand Across the Board by Countries

Malaysia’s exports to ASEAN countries slowed to 6.4% yoy in November, after a strong double-digit growth of 16% in October, supported mainly by healthy exports of crude petroleum, E&E products and petroleum products, while demand for other products remained weak. Export growth to China continued to be positive, albeit at a slower pace of 3.9% yoy in November, sharply lower than the 33% in October, dragged down by lower demand for E&E products, but cushioned by higher exports of chemicals and chemical products, petroleum products and LNG. Export growth to the US declined by 3.6% yoy in November, after two straight months of positive rises (7.7% in October), weighed down by weaker demand for manufactured goods, namely E&E products. Similarly, export growth to the EU also declined by 7.7% (+8.5% in October), due to lower demand for E&E products.

Source: Affin Hwang Research - 7 Jan 2019

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