MIDF Research: Bullish Q2 as exports recover

MIDF Research: Bullish Q2 as exports recover

KUALA LUMPUR: In a recent development, MIDF Amanah Investment Bank Bhd Research (MIDF Research) has predicted a better trade outlook for the second quarter of 2019 on exports recovery in March.

In a note today, MIDF Research said the upcoming events, including the United States and China trade deal, steady economic performance in the two largest economies, as well as palm oil purchase is included in the East Coast Rail Link deal, was expected to provide support to Malaysia’s export performance.

According to data released by the International Trade and Industry Ministry today, Malaysia’s exports were valued at RM84.05 billion in March, a slight decrease of 0.5 per cent from RM84.47 billion a year earlier.

MIDF Research, however, said the 0.5 per cent year-on-year (y-o-y) contraction was at a far slower pace compared with the 5.3 per cent y-o-y decline registered in the previous month, gaining back the momentum as the Chinese New Year holiday ended.

The trade performance of Malaysia’s regional partners in April 2019 could provide clues on what to expect from the country’s exports in that month, it said, noting that Vietnam’s exports grew 7.5 per cent y-o-y in that period while South Korea’s shrank two per cent y-o-y, which was however a lower decline compared with the March drop.

Moving forward, the research house forecast exports growth to average at 3.6 per cent in 2019 from 6.7 per cent in 2018, amid higher base effects and continuous signs of easing key global indicators.

“The moderating pace is consistent with global commodity prices and expectation of a slight slowdown in overall business performance on top of the uncertainty over trade conflicts,” it added.

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