-  Malaysia’s overall current account had registered a softer surplus of RM16.0bil or 6.1% of GDP in 2Q14. That compares to RM19.8bil or 7.7% of GDP in 1Q14.

-  The current account surplus slowed as services account recorded a higher outflow of RM3.6bil (1Q14: -RM2.7bil) while goods account registered a moderated surplus of RM30.1bil (1Q14: RM33.6bil).

-  In the goods account, exports were mainly contributed by E&E, palm oil & palm oil-based product, and liquefied natural gas. The top three exports destinations were Singapore, China, and Japan.

-  Aside from that, higher outflows were recorded for the primary income account at RM7.7bil (1Q14: -RM6.4bil) while outflows in the secondary income account slowed to RM2.8bil (1Q14: -RM4.6bil).

-  Current account had been strong during 1H14 driven by the improvement in trade activities when compared to a year ago.

-  For 1H14, current account registered a surplus of RM35.8bil or 6.9% of GDP. That compares to RM15.0bil or 3.2% of GDP in 1H13.

-  As a percentage of GDP, we envisage a current account surplus of 6.2% in 2014 vs. 4.0% in 2013. Overall current account is likely to soften in 2H14 owing to the potential slowdown in external demand.

-  Meanwhile, overall balance of payment amounted to -RM974mil in 2Q14 vs. -RM17.3bil in 1Q14.

-  Lower net outflow in the balance of payment was due to the improvement in the financial account which registered a lower net outflow during the quarter.

-  The financial account recorded a lower net outflow of RM11.8bil compared to -RM37.6bil in 1Q14. Under the financial account, the portfolio investments had shown improvement in 2Q14.

-  Portfolio investments – which consist of both equity securities and debt securities – had reverted to an inflow of RM6.9bil in 2Q14 from -RM13.4bil in 1Q14.

-  Elsewhere, FDI recorded a higher net inflow of RM10.2bil (1Q14: +RM7.0bil). FDI inflows were primarily channelled into mining, financial & insurance, and wholesale and retail. The top three sources of FDI were Netherlands, Singapore, and Japan.

-  Cumulatively, balance of payment registered an outflow of RM18.3bil in 1H14 vs. RM5.6bil in 1H13, driven by the high level net outflows in the financial account.

-  The financial account had registered an outflow of RM49.3bil in 1H14, compared to an inflow of RM5.6bil during 1H13.

Source: AmeSecurities