● Exportssurged to a 16-month high in Februaryboosted by alow base effect(11.8% YoY; KIBBestimate: 11.1%; consensus:0.3%; Jan: -1.5%)
- MoM: sharpest fall in one year (-11.5%; Jan: -2.6%), reflecting hampered global demand at the onset of COVID-19.
● Product-wise, rebound in exports of commodities and professional, scientific & controlling instrumentsoutweighed a softer growth of petroleum products shipments
- Commodities (6.6%; Jan: -15.2%): expanded for the first time in eight months solely on a low base effect.
- Professional, scientific & controlling instruments (56.6%; Jan: 0.2%): spiked to a six-month high, in line with higher demand for scientific supplies amid rising effort to combat the COVID-19 virus. It represents 4.0% share of total exports.
- Petroleum products (21.7%; Jan: 62.0%): moderated to a three-month low on a decline in Brent crude oil price (-12.9% to USD55.7/barrel; Jan: 7.1% to USD63.6/barrel).
- Electrical & electronics (-2.7%; Jan: -5.5%): fell for seven straight months (-22.6% MoM).
● The higher exports figure was steered by improved demand from Singapore, China and the US, albeit only on a YoY basis
- SG (22.5%; Jan: 1.1%): registered at a 31-month high (-9.2% MoM).
- CN (11.0%; Jan: -5.6%): rebounded after a brief contraction last month (-9.3% MoM).
- US (25.5%; Jan: 9.5%): strongest growth in over four years (-8.9% MoM).
● Importsrose to a 16-month high(11.3% YoY;KIBB: 6.1%;consensus:2.5%; Jan:-2.4%)primarilyon improved retained imports (15.4%; Jan: -1.1%) amid a low base
- Marked increase in imports of intermediate (20.4%; Jan: 3.7%) and consumption goods (10.1%; Jan: -1.0%) offset steeper fall in demand for capital goods (-16.9%; Oct: -14.8%) for five consecutive months, suggesting slowing domestic investment and rising pessimism amongst businesses.
- Re-exports remained in contraction (-6.3%; Jan: -6.7%) for 13 straight months, mirroring repercussions from supply chain disruptions since last year’s trade war and now due to the impact of COVID-19, resulting from heightened movement restrictions and factory closures globally.
● Trade surplus edgedupto a four-month high(RM12.6b; Jan:RM12.0b) as imports declined at amuch faster pace than imports on a MoM basis.
● 2020 exports forecast revised sharply down to -15.0% to -10.0% from 1.0-4.0% (2019: -1.7%)
- Trade activities are expected to endure a severe downturn, reflecting spillovers from the unceasing spread of the COVID-19, including supply chain disruptions, growth slowdown in major trading partners and weaker oil prices.
- Coupled with hampered private consumption and investment activities against rising risk of instability in income flow, we retain our 2020 GDP growth forecast at -1.9% (2019: 4.3%).
Source: Kenanga Research - 6 Apr 2020
Created by kiasutrader | Aug 26, 2024