-  Malaysia’s exports soared by 12.2% YoY to RM63.97bil in January, which surpassed both our and consensus estimates of 10.5% and 7.8% respectively.

-  The overseas shipment of E&E advanced by 14.6% to RM20.55bil. Meanwhile, exports of non-E&E products grew by 11.2% YoY to RM43.42bil.

-  In terms of commodities, note that shipments of palm oil increased by 4.5% YoY to RM3.88bil while crude petroleum contracted by 2.6% to RM2.78bil.

-  Malaysia’s exports to China grew by 27.2% YoY to RM8.26bil (or accounting for 12.9% of total exports).

-  Elsewhere, we note a larger contribution of exports to the US which amounted to 7.8% of total exports in January 2014, compared to 7.3% in December 2013. Nonetheless, exports to the US registered a marginal contraction of 0.3% YoY to RM4.97bil in January.

-  On the other hand, overseas shipment to Europe increased by 26.1% YoY to RM5.95bil, contributed by higher exports of E&E, palm oil, and chemicals and chemical products. EU had accounted for 9.3% of total exports in January.

-  Within the ASEAN basin, Singapore led the pact with 13.5% contribution to total exports. However, total shipments to Singapore fell by 10.6% to RM8.62bil.

-  Meanwhile, the strong growth in imports suggests that overseas shipment will remain resilient in the coming months. Import grew by 7.2% YoY to RM57.62bil in January. In December, imports surged by a healthy 14.5% to RM56.15bil.

-  All in all, total trade grew at a healthy pace of 9.8%. On the other hand, trade balance registered a moderated surplus of RM6.36bil in January due to the strong growth in imports (December: +RM9.59bil).

-  As a recap, exports grew by 2.4% while imports advanced by 7.0% in 2013. As such, total trade surplus declined by 26.4% YoY (or -RM25.33bil) to RM70.63bil last year.

-  During 4Q13, GDP growth was bolstered by the relatively stronger net trades compared to the first three quarters of 2013. Net trades had contributed 7.8% to total GDP in 4Q13 vs. 6.4% in 3Q13.

-  Going forward, Malaysia could rely on rising exports to support growth. In nominal terms, trade surplus could amount to RM104.2bil in 2014 (2013: RM70.63bil).

Source: AmeSecurities