Exports and imports continued to perform strongly, resulting in a trade balance of RM8.6bil in September. While exports rose 14.8% y/y supported mainly by E&E, imports grew 15.2% y/y. We reiterate our 21% fullyear export growth despite envisaging slower exports to some degree in 4Q2017 due to a high base. Apart from continued demand from our major trading partner and a low base, we foresee exports benefiting from the undervalued MYR. We expect USD/MYR to average at 4.31–33 for 2017.

On the back of strong exports growth supported by domestic activities, we believe the full-year 2017 GDP growth would be around 5.7% which is on the high end of the official projection of 5.2% – 5.7%. And with inflation poised to average at 3.7% for the full year of 2017, we believe the OPR of 3.00% will stay intact in 2017.

• Exports and imports continued to perform favourably. In September, exports rose by 14.8% y/y from 21.6% y/y in August, the third consecutive month of double-digit growth. Meanwhile, imports gained 15.2% y/y in September from 22.4% y/y in August. Trade balance in September stood at RM8.6bil from RM10.0bil in August.

• Healthy exports performance continued to be supported by the electrical and electronic (E&E) sector which rose by 17.7% y/y in September from 20.1% y/y in August. We expect this segment of exports to continue performing favourably during the year supported by healthy external demand. Besides, exports are also being supported by petroleum products (+22.4% y/y) and manufacture of metal (+25.4% y/y).

• We reiterate our 21% full-year export growth despite envisaging slower exports to some degree in 4Q2017 due to a high base. Apart from continued demand from our major trading partner and a low base, we foresee exports benefiting from the undervalued MYR. We expect USD/MYR to average at 4.31–33 for 2017.

• On the back of strong exports growth supported by domestic activities, we believe the full-year 2017 GDP growth would be around 5.7% which is on the high end of the official projection of 5.2% – 5.7%. And with inflation poised to average at 3.7% for the full year of 2017, we believe the OPR of 3.00% will stay intact in 2017.

Source: AmInvest Research - 6 Nov 2017