Last week’s highlights

• Ministry of Finance Malaysia (MOF) had released its 51st LAKSANA report last week.

• Malaysia’s export surged substantially by 31.0% yoy in March

• Producer Price Index (PPI) continued a growth of 6.7% in March 2021

• The FBM KLCI fell by 0.42% or 6.78 points for the week to settle at 1,601.65 points

• US real gross domestic product (GDP) expanded by 6.4% qoq and 0.4% yoy in 1Q21

• In 1Q21, euro area slipped into double-dip recession after GDP growth contracted by 0.6% qoq

• South Korea’s GDP expanded by 1.6% qoq in 1Q21

• Federal Reserve, Bank of Japan and Riksbank kept the policy rates unchanged

• World shares off record peak; dollar rises

MALAYSIA ECONOMY

• According to the Ministry of Finance Malaysia (MOF) 51st LAKSANA report, a total of RM1.393bn was approved to 7,424 businesses under the SMEs PENJANA financing. PENJANA microcredit financing BSN recorded approval of RM421.1m to 12,662 SMEs. Furthermore, RM63.9m had been channeled to 321 businesses under PENJANA tourism sector financing. As of 16th April, 143,004 persons have participated under the skills enhancement program. The disbursed amount of wage subsidy 1.0 and 2.0 schemes remained at RM12.872bn and RM1.148bn, respectively.

• Malaysia’s exports surged substantially by 31.0% yoy in March from RM80.1bn in March 2020 to RM104.9bn. Imports also rose strongly by 19.2% to RM80.8bn in March compared to 12.7% growth in the previous month. Total trade rose by 25.6% to RM185.7bn, the largest growth registered in 44 months. Trade surplus surged by 96.1% yoy to RM24.2bn, sustaining a double-digit growth for tenth consecutive month.

• In first quarter 2021, exports increased 18.2% yoy to RM282.1bn. Reexports valued at RM51.6bn also grew 19.0% yoy and accounted for 18.4% of total exports. Domestic exports rose 18.0% to RM230.6bn from a year ago. Imports also registered an increase of 10.8% yoy to RM223.5bn. Malaysia’s trade during 1Q21 grew by 14.8%to RM505.6bn compared to 1Q20. Trade surplus in 1Q21 was valued at RM58.6bn, rose by 58.6% compared to the same period of 2020. Compared to 4Q20, total trade, exports and imports expanded by 4.7%, 3.9% and 5.6%, respectively. Trade surplus contracted by 2.1%.

• The Producer Price Index (PPI) local production continued to increase with a growth of 6.7% in March 2021, accelerated from +2.7% recorded last month. This was the highest increase since August 2017. The growth was driven by the increase in the mining index (32.0%), agriculture, forestry & fishing index (41.1%), manufacturing index (2.2%). The index of crude materials for further processing surged to 31.8% from 10.0% in February 2021. The index of Intermediate materials, supplies & components also increased 2.8%. However, the finished goods recorded a negative 0.2%. In the 1Q21, PPI rose by 3.0%.

Source: BIMB Securities Research - 3 May 2021