Exports surged by +63.0% YoY in Apr (Mar: +31.0% YoY), surpassing the consensus estimate of +50.0% YoY, partly due to low base effect. Growth was mostly boosted by E&E, rubber and petroleum products. Imports also accelerated (+24.4% YoY; Mar: +19.2% YoY), as higher intermediate and consumption imports offset the decline in capital imports. Trade surplus continued to record a surplus, albeit smaller (RM20.5bn; Mar: RM24.2bn).

DATA HIGHLIGHTS

Exports surged by +63.0% YoY in Apr (Mar: +31.0% YoY), surpassing the consensus estimate of +50.0% YoY, partly due to low base effect. Imports also accelerated to +24.4% YoY (Mar: +19.2% YoY). On a monthly basis, growth momentum slowed for exports (+0.6%; Mar: +19.8%) and imports (+5.4%; Mar: +15.9%). Consequently, trade surplus narrowed to RM20.5bn (Mar: RM24.2bn).

Exports to most major markets strengthened further, aided by low base effect. Triple digit growth was recorded to US (+128.6% YoY; Mar: +67.5% YoY), owing to higher exports of E&E, rubber products, optical & scientific equipment as well as wood products. Other major markets such as EU (+85.4% YoY; Mar: +45.9% YoY), Japan (+60.3% YoY; Mar: +14.4% YoY) and ASEAN (+58.6% YoY; Mar: +17.4% YoY) also improved. Meanwhile, exports to China moderated to +28.0% YoY (Mar: +46.6% YoY).

Commodity-related exports accelerated to +82.8% YoY (Mar: +13.0% YoY), driven by resilient demand for rubber products (+207.2% YoY; Mar: +210.6% YoY) and palm oil (+73.0% YoY; Mar: +54.1% YoY), alongside turnaround in petroleum products (+87.8% YoY; Mar: -38.3% YoY) and crude petroleum (+37.1% YoY; Mar: -27.2% YoY). LNG exports continued to decline, albeit by a smaller pace (-1.3% YoY; Mar: - 24.3% YoY).

Manufactured exports strengthened further (+56.9% YoY; Mar: +36.8% YoY), underpinned by growth across all products in this category; manufactures of metal (+180.7% YoY; Mar: +88.4% YoY), machinery, equipment & parts (+172.7% YoY; Mar: +49.7% YoY), optical & scientific equipment (+85.6% YoY; Mar: +30.8% YoY) and chemical products (+39.4% YoY; Mar: +32.3% YoY). E&E exports slightly eased (+43.1% YoY; Mar: +48.0% YoY), but still contributed the most (+17.2ppt) to overall exports growth.

Meanwhile, imports accelerated to +24.4% YoY (Mar: +19.2% YoY) following higher intermediate (+64.4% YoY; Mar: +12.4% YoY) and consumption imports (+29.9% YoY; Mar: +13.0% YoY) which offset the decline in capital imports (-38.2% YoY; Mar: +93.3% YoY).

HLIB’s VIEW

The gradual unwinding of pandemic restrictions around the world has led to an upturn in manufacturing and trade activity, reflected by continued growth in new export orders PMI (Apr: 54.7; Mar: 53.5). In line with this, UNCTAD expects global trade to further rebound in 2Q21 and remain strong in 2H21, with overall 2021 trade to register +16.0% growth from the lowest point of 2020. Nevertheless, the outlook remains uncertain and economic recovery will likely be uneven due to varied pace of vaccinations and new wave of infections which continue to disrupt re-openings in many developing countries.

Source: Hong Leong Investment Bank Research - 31 May 2021