Thursday, July 02, 2009

Confusing Headlines On Malaysian Export Numbers

On Business Times: 'Malaysian exports inching towards recovery'

  • By Rupa Damodaran Published: 2009/07/02

    MALAYSIAN exports are taking small steps towards recovery as manufacturers take advantage of inventory replacement activities worldwide, economists said.

    Malaysian manufacturers mainly produce electronic and electrical items that are used to make computers, among others.

    They have been hit hard by weak demand due to the global recession.

    Although there seems to be some improvement in the month-on-month E&E orders and industrial output, economists were still concerned whether the data was sustainable.

    They forecast May exports to contract further by 28.83 per cent, with imports also down by 23.91 per cent. Trade balance may average RM8.68 billion.

    The contraction in May, from a minus 26.3 per cent in April, will be made worse by high numbers last year as commodity prices were strong then.

    The International Trade and Industry Ministry will release the data tomorrow.

    Irvin Seah from DBS said the worst quarter of the recession was behind and an impending recovery for Malaysia would be visible in the months ahead.

    "As far as we're concerned, the trough of the export cycle (in absolute level) was back in January."

    "Improvement in the global economic environment, led by restocking by producers as well as the recent increase in oil prices probably will contribute to the headline export figure in May."

    The oil prices also rose to US$65 (RM228.80) per barrel from US$39 (RM137) per barrel between April and May.

    "That's a 32 per cent increase, which will certainly inject some 'price effects' to the export number."

    Standard Chartered Bank economist Alvin Liew expects a sharper contraction in exports in May,
    driven by the plunge in export value of key commodities like crude palm oil and crude oil.

    This would translate into a trade surplus of RM7 billion, which could be the narrowest monthly surplus since April 2007.

    TA Research economist Patricia Oh said faltering trade activities are likely to persist considering the rise in unemployment, dampened consumer sentiment and reduced demand for goods and services.

Hmm... I wonder why Business Times decided to name that headline ''Malaysian exports inching towards recovery' when two of the three economists mentioned inside the article itself weren't optimistic at all.

Strange eh? :p2

On Star Business, the headline was Economists see further fall in Malaysia’s exports


    PETALING JAYA: Malaysia’s exports continued to contract year-on-year in May as the bottoming-out process worked its way through the global economy.

    A Bloomberg poll of 12 economists saw exports contracting 28.2% year-on-year in May (April: minus 26.3%), imports falling 23.2% (April: minus 22.4%) and the trade balance rising to RM8.8bil (April: RM7.4bil).

    The Statistics Department is expected to release the external trade figures tomorrow.

    Economists are still cautious of the landscape although there are signs that things are looking better ahead with China’s purchasing managers’ index expanding for a fourth month in June and consumer confidence in Britain and the euro-zone rising.

    However, a gauge of US consumer confidence dropped in May while Japan’s Tankan business survey showed confidence among the country’s manufacturers was still down in June as factories remained under-utilised.

    The economists said the key driver remained government stimulus measures to boost domestic demand as there was no recovery in exernal demand.

    Oversea-Chinese Banking Corp Ltd treasury research and strategy head Selena Ling said global demand, especially from the G3 countries (the United States, Japan and the 25 members of the European Union) remained “very weak”.

    In Malaysia’s case, we see continued weakness in the electrical and electronics (E&E) segment of manufacturing, with revenue contribution to exports versus commodities continue falling,” she told StarBiz yesterday.

    Ling said the conflicting data coming from various parts of the world was quite common at the inflection point.

    “It’s a bottoming-out process, there will be stabilisation but there will not be real growth as most of it is coming through stimulus measures,” she said.

    Forecast Pte Ltd economist Joanna Tan said there were still no blatant signs of demand recovery, with the global E&E sector still in contractionary mode although it was off its lows from the start of the year.

    “Right now, it’s good to be cautious as there are no compelling signs the recovery is gaining momentum,” she said.

    Standard Chartered Bank economist Alvin Liew said even if China were to recover, final demand still hinged on the G3 nations.

    “However, countries such as Australia and Malaysia, with strong base in commodities, will benefit from China’s relatively stronger performance,” he said.

    Liew said the liberalisation measures taken by Malaysia would help but benefits should be seen only in the long term.

    On Tuesday, Prime Minister Datuk Seri Najib Razak announced measures aimed at liberalising the capital markets, of which the dismantling of the 30% bumiputra equity policy was an important part.

    United Overseas Bank Ltd economist Ho Woei Chen said the bullish stock markets and upturn in consumer sentiment signalled that the worst was over but a firm recovery in external demand had yet to happen.

    “Most trade statistics in Asia remain weak and will likely be the case for the coming months until we see US consumers spending again,” she said.

    HSBC Holdings plc senior Asia economist Robert Prior-Wandesforde said the data in recent months were not quite as bad.

    “The Tankan survey showed a drop in business confidence but capital investment has improved quite a lot,” he said.

    Prior-Wandesforde added that China was clearly at the forefront of the global recovery. Although its exports had fallen, fixed investment was up more than 40% year-on-year while industrial output had also improved, he said.

    He said the leading indicators had shown for some time that things were starting to improve. “We believe the worst is over, with industrial output in Taiwan, South Korea and Singapore rising more than 20% from the lows.”