NST Online Business Times : latest
NST Online Business Times : latest |
| Malaysia's November IPI beats expectations Posted: 09 Jan 2014 07:25 PM PST Industrial output in Malaysia sprang a pleasant surprise in November, posting a 4.4 per cent annualised growth and beating market expectations. Research houses expect the industrial output to gain traction in 2014. The stronger reading in November came from an improvement in the manufacturing sector said the Statistics Department yesterday.
The mining sector also grew by 4.8 per cent in November on the back of a healthy growth in the natural gas index by 17.4 per cent. Electricity output also recorded an increase by 6.1 per cent on a yearly basis. Bank of America Merrill Lynch economist Dr Chua Hak Bin is confident that the manufacturing sector recovery will gain traction this year. "The robust IP reading is consistent with the visible pick-up in exports of manufactured goods (that is electronics and machinery)." The mining sector, he added, surprised on the upside, following three consecutive months of contraction. "Manufacturing sales have also recorded five consecutive months of expansion, following contractions in most of the first six months of 2013. "A pick-up in global demand and resilient consumer spending will underpin the recovery, and help offset a slowdown in government expenditure." Chua expects generous government handouts and subsidies to give way to fiscal consolidation and, towards this end, the government has already raised fuel and electricity prices, and abolished sugar subsidies. CIMB Investment Bank expects the improved growth traction in the industrial output next year to be backed by the recovery in the advanced economies and improving export demand for semiconductors. Ongoing implementation of the Economic Transformation Programme and property development projects supporting domestic-market oriented industries will also support the growth. Based on the overall industrial production and manufacturing growth in November and October, CIMB expects the third quarter GDP growth to reach 5.3 per cent. Meanwhile, the Statistics Department said the manufacturing sector enjoyed a 4.4 per cent growth to record RM53.2 billion in sales. |
| Ringgit set for best week since October Posted: 09 Jan 2014 07:31 PM PST Malaysia's ringgit was headed for the best week since October after data signaled a sustained recovery in Southeast Asia's third-biggest economy. Exports exceeded imports by the most in 20 months in November, while factory output growth accelerated to a four-month high, according to official figures released this week. US employers added more workers than projected in December and claims for jobless benefits dropped last week, reports showed, backing the case for the Federal Reserve to continue trimming stimulus. "The positive local data are helping the ringgit a lot, even though Fed tapering noises are still very real," said Choong Yin Pheng, senior manager for bond and economic research at Hong Leong Bank Bhd in Kuala Lumpur. "That boosted the outlook for the new year." The ringgit strengthened 0.5 per cent since January 3, the biggest five-day gain since the week ended October 18, to 3.2736 per dollar as of 10am in Kuala Lumpur, according to data compiled by Bloomberg. The currency advanced 0.1 per cent today. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 58 basis points this week to 7.05 per cent. The rate climbed five basis points, or 0.05 percentage point, today.
The ringgit will climb to 3.15 per dollar in 12 months, with the improvement in Malaysia's trade balance supporting the forecast for a stronger current-account position, Goldman Sachs Group Inc analysts including Singapore-based Mark Tan wrote in a January 8 research note. Fed officials said in December that they will cut monthly bond purchases in January to US$75 billion from US$85 billion. Policy makers will trim stimulus in US$10 billion increments over the next seven meetings before ending them in December, according to a Bloomberg survey on December 19. The Federal Open Market Committee will announce its next policy decision on January 30. The yield on Malaysia's 3.26 per cent sovereign notes due March 2018 fell 11 basis points this week, the biggest five-day drop since the period ended October 18, to 3.59 per cent, according to data compiled by Bloomberg. It was little changed today.-- Bloomberg
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