-  The overall current account advanced to RM16.2bil in 4Q13 owing to the improvement in net trades during the quarter. Note that current account registered a surplus of RM9.8bil in 3Q13.

-  As a percentage of nominal GDP, it registered 6.1% in 4Q13 compared to 3.9% in 3Q13. For the full-year 2013, the current account moderated to 3.8% of GDP (2012: 6.1% of GDP).

-  The current account surplus was mainly due to a higher surplus of goods account amounting to RM33.6bil (3Q13: RM25.8bil) and services account which recorded a narrower outflow of RM3.7bil (3Q13: -RM4.3bil).

-  Meanwhile, higher outflows were recorded for the primary income account at RM9.9bil (3Q13: -RM8.1bil) and secondary income account at RM3.7bil (3Q13: -RM3.5bil).

-  As such, the overall balance of payment registered an outflow of RM2.9bil in 4Q13 which brings the full-year balance to +RM14.5bil in 2013.

-  Elsewhere, the capital account recorded a higher net outflow of RM23.0mil compared to -RM11.0mil in 3Q13. This was due to higher outflow in net capital transfers in 4Q13.

-  Meanwhile, the financial account recorded a net outflow of RM9.7bil (3Q13: -RM11.5bil). This was mainly due to lower net outflow in portfolio investment from RM9.7bil in 3Q to RM0.7bil in 4Q13.

-  FDI recorded a higher net inflow of RM11.2bil (3Q13: +RM9.4bil). FDI inflows were primarily channelled into manufacturing, real estate and mining sectors, while the top three sources of FDI were Hong Kong, Singapore and British Virgin Island.

-  Owing to the improvement in external demand and thus stronger trade surplus ahead, we envisage the current account to pick up in 2014.

-  For full-year 2014, current account is likely to register 6.9% of GDP as net trades are expected to advance further during the year. 

Source: AmeSecurities