- Malaysia’s overall current account had slowed drastically to RM7.6bil or 2.8% of GDP in 3Q14. That compares to RM16.0bil or 6.1% of GDP in 2Q14.

- The current account surplus slowed as services account recorded a higher outflow of RM6.4bil (2Q14: -RM3.6bil) while goods account registered a moderated surplus of RM28.7bil (2Q14: RM30.1bil).

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

- Aside from that, higher outflows were recorded for the primary income account at RM9.4bil (2Q14: -RM7.7bil). Outflows in the secondary income account had also increased to RM5.3bil (2Q14: -RM2.8bil).

- As at YTD 3Q14, current account registered a surplus of RM43.4bil or 5.5% of GDP. That compares to RM25.1bil or 3.5% of GDP in 3Q13.

- As a percentage of GDP, we envisage a current account surplus of 5.1% in 2014 vs. 4.0% in 2013. Overall current account is likely to pick up pace in 4Q14 amidst the improvement in net trades due to weak import orders.

- Meanwhile, overall balance of payment amounted to -RM6.7bil in 3Q14 vs. -RM1.0bil in 2Q14.

- Higher net outflow in the balance of payment was due to the errors and omissions and lower current account surplus during the quarter.

- The financial account recorded a lower net outflow of RM2.8bil compared to -RM11.8bil in 2Q14. The improvement was driven by the rebound in direct and other investments during the quarter.

- However, the portfolio investments had deteriorated in 3Q14. Portfolio investments – which consist of both equity securities and debt securities – had reverted to an outflow of RM11.0bil in 3Q14 from +RM6.9bil in 2Q14.

- Elsewhere, FDI recorded a lower net inflow of RM7.7bil (2Q14: +RM10.2bil). The top three sources of FDI were Singapore, Mauritius and Cayman Islands, which were directed into mining, financial & insurance, and wholesale & retail.

Source: AmeSecurities