Trade figures for January 2024 surged by an impressive 13.3%, reaching a substantial value of RM234.73 billion. The latest data released by the authorities indicates a robust double-digit expansion, signaling a remarkable turnaround for the nation’s economy.

Exports saw a modest increase of 8.7% to RM122.43 billion, while imports surged by 18.8% to RM112.3 billion, marking a record high for January. Simultaneously, Malaysia maintained its trade surplus, reaching RM10.12 billion for the 45th consecutive month since May 2020.

This rebound in trade performance can be attributed to various factors, including increased shipments of petroleum products, machinery, equipment, and parts, as well as iron and steel products. Notably, exports to key trading partners such as ASEAN, the United States, the European Union, and Japan recorded significant expansions, further fueling Malaysia’s trade resurgence.

Compared to December 2023, trade, exports and imports increased by 4.3%, 3.4%,and 5.3%, respectively while trade surplus contracted by 13.8%.

Export Sector Analysis
Malaysia’s export sector in January 2024 exhibited resilience and dynamism across various categories. Manufactured goods, constituting a significant portion of total exports, demonstrated notable growth, while mining goods and agriculture goods also contributed to the overall positive performance.

Manufactured goods, accounting for 84.7% of total exports, showcased a commendable expansion of 9.3% year-on-year, totaling RM103.65 billion. This growth was widespread across most manufactured goods categories, with petroleum products, machinery, equipment and parts, iron and steel products, and manufactures of metal driving the increase. However, electrical and electronic (E&E) products experienced a slight decline of 6.5%, attributed mainly to reduced exports to China and Singapore.

Exports of mining goods, comprising 7.9% of total exports, declined by 4.9% year-on-year to RM9.72 billion. This decrease was primarily driven by reduced exports of liquefied natural gas (LNG).

Agriculture goods, representing 6.7% of total exports, rebounded strongly with a double-digit expansion of 17.5% to RM8.24 billion. This growth, reversing the negative trend observed since November 2023, was fueled by robust exports of palm oil and palm oil-based agriculture products.

Major Export Products:
Several key export products played pivotal roles in driving Malaysia’s export performance in January 2024. Notably, electronic and electrical (E&E) products, despite experiencing a slight decline of 6.5%, remained the top export product, valued at RM44.02 billion and accounting for 36% of total exports.

Petroleum products emerged as another significant contributor, witnessing a robust growth of 24.2% to RM14.81 billion, constituting 12.1% of total exports. This surge in petroleum product exports further solidifies Malaysia’s position as a key player in the global energy market.

Palm oil and palm oil-based agriculture products also made substantial contributions, with exports totaling RM6.15 billion, marking a notable increase of 16.3%. This category accounted for 5% of total exports and reflected Malaysia’s strength in the agriculture sector.

Despite a decline of 9.3%, LNG remained a significant export product, valued at RM6.05 billion and constituting 4.9% of total exports. Additionally, chemicals and chemical products experienced a moderate growth of 4.4%, totaling RM6.03 billion and representing 4.9% of total exports.

Overall, these major export products underscore Malaysia’s diversified export portfolio and its ability to capitalize on various sectors to drive economic growth and resilience.

Source: Ministry Of Investment, Trade and Industry

Malaysia has officially ratified the World Trade Organisation’s (WTO) Fisheries Subsidies Agreement (FSA), joining 68 other member nations in a collective effort to combat harmful fishing subsidies and safeguard fish stocks. This announcement was made by Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz during his attendance at the 13th WTO Ministerial Conference in Abu Dhabi, United Arab Emirates.

The FSA, adopted in June 2022, aims to address critical threats to oceans and promote sustainable fishing practices worldwide. By curbing illegal, unreported, and unregulated (IUU) fishing, the agreement seeks to mitigate overfishing and maintain the delicate balance of marine ecosystems.

In his statement on social media, Tengku Zafrul emphasised Malaysia’s dedication to global cooperation and responsible ocean stewardship. He urged remaining WTO members to expedite their domestic ratification processes, emphasising the importance of collective action in preserving marine biodiversity and safeguarding the livelihoods of millions dependent on fishing.

Furthermore, the FSA ensures transparency and accountability in fishing subsidies provided by member countries. Tengku Zafrul highlighted that this transparency fosters responsible fishing practices and facilitates effective compliance monitoring.

As part of the agreement, the WTO will establish technical assistance and capacity-building programs aimed at aiding developing and least developed countries in integrating sustainability elements into their policies and enhancing their fisheries management systems. This initiative underscores a concerted effort to support global sustainability goals and secure a better future for generations to come.

Cambodia Prime Minister, Hun Manet arrived in Malaysia today for a one-day official visit at the invitation of Prime Minister Datuk Seri Anwar Ibrahim. Hun Manet and his delegation landed at 9.30am at the Bunga Raya Complex of the Kuala Lumpur International Airport (KLIA).

Digital Minister Gobind Singh Deo, Malaysian Ambassador to Cambodia Datuk Eldeen Husaini Mohd Hashim, and Cambodian Ambassador to Malaysia Ouk Chandara were there at the airport to welcome Hun Manet.

Since he became Prime Minister in August last year, replacing his father Hun Sen, this is his first visit to Malaysia. Hun Manet will be given an official welcoming ceremony at Perdana Putra Square, Perdana Putra Complex, Putrajaya, which Anwar and Deputy Prime Ministers Datuk Seri Ahmad Zahid Hamidi and Datuk Seri Fadillah Yusof will attend.

Hun Manet and Anwar then are set to engage in a series of meetings and events aimed at bolstering bilateral ties. Following a bilateral meeting, they will witness the signing of a Memorandum of Understanding on Cooperation in Financial Innovation and Payment Systems between the Central Bank of Malaysia and the National Bank of Cambodia. Anwar will host a luncheon thereafter.

Hun Manet is also scheduled to have an audience with His Majesty Sultan Ibrahim, King of Malaysia, and courtesy calls on Dewan Negara President Datuk Mutang Tagal and Dewan Rakyat Speaker Datuk Johari Abdul. The visit will conclude with the Malaysia-Cambodia Business Forum organized by the Cambodia Chamber of Commerce and the Malaysian Business Council in Cambodia.

Anwar’s previous visit to Cambodia in March last year laid the groundwork for discussions during the bilateral meeting. Key agenda items include progress in bilateral relations, cooperation in trade, investment, agriculture, halal industry, energy, security, information, communication, and Malaysia’s contributions to the socio-economic development of Cambodia’s Muslim community.

Wisma Putra emphasised that Hun Manet’s visit would strengthen Malaysia-Cambodia relations bilaterally and within ASEAN. Diplomatic relations, established in 1957, have resulted in cooperation across various sectors including trade, investment, education, and employment opportunities.

In 2023, Cambodia emerged as Malaysia’s 9th largest trading partner in ASEAN. Bilateral trade reached RM3.02 billion, with Malaysian exports to Cambodia valued at RM2.35 billion, marking a 1.6% increase from the previous year. Malaysian companies have invested RM14.4 billion across 162 projects in Cambodia.

PETRONAS Dagangan Berhad’s Q4 FY2023 revenue saw steady growth, with a 6 per cent increase to RM10.1 billion compared to the corresponding quarter, and a 2 percent increase to RM37.5 billion for the full year.

Notably, the pre-tax profit climbed 18 per cent from the same quarter last year to RM285.9 million. The momentum carried over to the full-year performance, with pre-tax profit registering a 17 per cent increase to RM1.3 billion.

In Q4 FY2023, its registered a sales volume of 4.2 billion litres, bringing its yearly total to a historic high of 16.3 billion litres. This achievement was principally driven by the increase in traffic volume that boosted direct demand during key periods like festive seasons and school holidays.

Its financial results for the quarter ended 31 December 2023 (Q4 FY2023), ended the year with a record annual volume and robust financial growth mirroring the surge in sales volume.

PETRONAS Dagangan’s Managing Director and Chief Executive Officer Azrul Osman Rani said, “2023 was a landmark year, one that signalled our capacity for strong, profitable growth at scale and represented a key inflection point for PETRONAS Dagangan.”

“We were able to manage market volatility to deliver an all-time high sales volume which further fuels our commitment to making our customers’ lives simpler and better, while delivering value for all stakeholders.”

PETRONAS Dagangan’s achievements were primarily driven by strong performance in both the Retail and Commercial segments.

The Retail segment enjoyed improved margins due to strong volume demand for Diesel and Mogas.

Moreover, favourable margins in jet fuel and commercial Diesel further contributed to the Company’s performance, bolstered by stable price trends during the quarter, which closely followed the movement of crude oil prices throughout the period.

The quarter under review saw impactful strides in sustainability, notably through its ongoing efforts in biofuel, solar and electric vehicle (EV) infrastructure initiatives, for example the Company’s collection of more than 120,000 kg of used cooking oil (UCO) since its launch in July 2023, PETRONAS Dagangan said in a statement today (Feb 27).  

Additionally, PETRONAS Dagangan has enhanced 26 retail stations with EV chargers and completed the solarisation of 60 sites in collaboration with Gentari.

To elevate customer experience, PETRONAS Dagangan has launched Mesra Rewards loyalty programme with a cardless feature, which saw more than 50 per cent growth in active members.

The Company also continues to champion inclusive mobility through Setel, which was selected by the Ministry of Finance for the eMADANI programme.

Azrul concluded, “As we enter 2024, we will remain focused on further enhancing operational efficiency and expanding our market presence to be well-positioned for continued growth in a dynamic and evolving landscape. Even though the anticipated momentum of Malaysia’s economy and resilient domestic demand make for a promising backdrop to the year, we will remain vigilant in navigating potential global headwinds and rising inflation with a commitment to long-term, sustainable success.”

PDB declared an interim dividend of 27 sen per ordinary share. For the financial year 2023, PDB has declared total dividend of 80 sen per ordinary share.

Cryptocurrency bitcoin hit a two-year high above $57,000 in Asia trade on Tuesday on signs of heavy institutional buying, while smaller rival ether topped $3,200 for the first time in two years.

Bitcoin has rallied more than 10 per cent in two sessions, helped by a Monday disclosure from crypto investor and software firm MicroStrategy that it had recently purchased about 3,000 bitcoins for an outlay of $155 million.

The original and largest cryptocurrency by market value has also been buoyed recently by the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States. On Monday, trading volumes in several of the funds spiked and crypto-linked firms rallied too, in contrast to nervous broader markets. – Reuters

Malaysian and Singaporean regulators have recently taken a significant step to combat telecommunications scams that have inflicted substantial financial losses on citizens of both countries.

Singapore’s Infocomm Media Development Authority (IMDA) and the Malaysian Communications and Multimedia Commission (MCMC) signed a memorandum of understanding (MOU) on February 25 in Barcelona, Spain, at the Mobile World Congress.

Reports from Nikkei Asia highlight the severity of the issue, with Singaporeans reportedly losing S$651.8 million last year, averaging around S$110 per person. Similarly, Malaysians suffered losses amounting to RM287 million in 6,003 cases of phone scams in 2020.

The primary aim of the agreement is to bolster the exchange of “strategic intelligence” across borders to combat scams conducted via telecommunications channels, particularly through phone calls and texts. This collaborative effort seeks to implement a coordinated regional approach to better protect citizens from falling victim to such fraudulent activities.

Key areas of cooperation outlined in the MOU include providing regulatory assistance and cooperation related to scam telephone calls and text messages, conducting research and education initiatives on scam prevention, and facilitating the mutual exchange of knowledge and expertise through training programs and staff exchanges.

IMDA emphasised the importance of strong cooperation among countries in tackling online scams, which are a cross-border issue. Singapore and Malaysia have a history of successful collaboration on various fronts, including cross-border enforcement actions against scammers.

The MOU was signed by MCMC chairman Tan Sri Mohamad Salim Fateh Din and Lew Chuen Hong, chief executive of IMDA. Additionally, both countries plan to share knowledge and expertise through training programs and staff exchanges. Singapore already has similar agreements in place with countries like New Zealand, the US, and Australia.

With an increasing number of scammers taking advantage of developed networks to perpetrate schemes involving jobs, e-commerce, and investment, this collaborative effort between Malaysia and Singapore aims to better equip authorities to combat telecommunications scams and protect citizens from financial harm.

Maybank Investment Bank (Maybank IB) today (Feb 27) has cut their FY24-25E EPS for PETRONAS Chemicals Group Berhad (PCHEM) by – 33%/-37% to account for: i) lower EBITDA margins for its O&D segment; ii) post results house-keeping; and iii) incorporating Pengerang ops beginning 2H24.

Maybank IB has lowered its TP to MYR5.05 (from MYR5.75) after rolling forward valuation to FY25E (from FY24E) based on 18.1x PER (previously 16x), its updated 5Y mean. They Maintain SELL.

4Q23 missed expectations but DPS was in-line

Ex-one-off (MYR78m inventory write down to NRV), 4Q23 core net profit was MYR161m (-61% QoQ, -81% YoY). FY23 core earnings of MYR1,774m (-69% YoY) was only 86%/82% of ours/consensus estimates.

Key variance against Maybank IB’s forecast was due to: i) unexpected shutdown at PC Aromatics and slowdown at PC Olefins due to steam interruption issues, resulting in lower production & sales volume in 4Q23; and ii) crimping of EBITDA and PAT margins due to operating leverage (lower sales volumes), coupled with higher maintenance costs throughout the quarter.

A 2nd interim 5sen DPS brings FY23 DPS to 13sen (62% DPR), well within Maybank IB’s forecast.

FY23 dragged by lower product ASPs and margins

Based on Maybank IB findings from Bloomberg data, all product spreads were down YoY. For instance, FY23 average polyethylene prices (HDPE, LDPE, LLDPE) were down 12-27% YoY (vs. FY22).

Also, urea prices sank -42% YoY while methanol prices fell -15% YoY.

PCHEM’s O&D and F&M segments’ PAT margins dropped to 5.1% (-14.8 ppts) and 19.5% (-12.1 ppts) respectively due to lower product spreads coupled with higher energy/utilities costs.

Group CNP margin was down 16.5 ppts YoY to 6.2%.

Consolidation of Pengerang ops to drag earnings

PCHEM is hopeful that the consolidation of its Pengerang ops will commence in 2Q24 and with that, Maybank IB has pencilled in additional fixed costs from the Pengerang Petrochemical Complex (PPC) for the entirety of 2H24 (additional MYR500m/year).

Note that PPC will introduce to PCHEM the exposure of polymer-naphtha spreads, which are currently negative.

Strong US economic growth has been a “key driver” of better than expected global growth, US Treasury Secretary Janet Yellen will tell a news conference on Tuesday ahead of this week’s meeting of G20 finance officials in Sao Paolo, Brazil.

In excerpts of her remarks released by Treasury, Yellen said the International Monetary Fund and other forecasters had projected a broad-based slowdown in the global economy in 2023 that did not happen.

Instead, growth came in at 3.1%, exceeding expectations, and inflation fell, with prices expected to continue falling this year in about 80% of economies, she said.

“Going forward, we remain cognizant of the risks facing the global outlook and continue to carefully monitor the economic challenges in certain countries, but the global economy remains resilient,” she said.

Yellen said US economic strength had underpinned global growth, fueled by Biden administration policies supporting businesses hit hard by the Covid-19 pandemic and investments in domestic manufacturing, clean energy and infrastructure.

US inflation had also declined significantly from its peak and the US labour market was historically strong, she said, with the prime-age labour force above its pre-pandemic level and the unemployment rate near historic lows.

“Had a US recession come in 2023, like many predicted, global growth would have been thrown off track. While there are risks to our outlook, America’s growth has consistently exceeded projections,” Yellen said.

The IMF last month edged its global growth outlook to 3.1% in 2024, up two-tenths of a percentage point from its October forecast, and left its 2025 forecast unchanged at 3.2%.

The IMF’s chief economist, Pierre-Olivier Gourinchas, said the global lender’s updated World Economic Outlook showed a “soft landing” was in sight, but overall growth and global trade remained lower than the historical average.

Yellen said growth in many economies, including Brazil, the current president of the Group of 20 economies, had also contributed to global growth, although other economies still faced challenges. She did not specify which countries were facing problems.

IMF spokesperson Julie Kozack last week told reporters the global lender would take new information on the Japanese and British economies, which both slipped into recession, into account as it prepared a new global forecast to be released in April. – Reuters

Asian shares struggled to advance on Tuesday, with slightly warmer-than-expected Japanese inflation putting investors on guard ahead of price data due in Europe and the U.S. this week.

The yen steadied at 150.57 to the dollar and inched off a three-month low on the euro as Japanese inflation stayed at the central bank’s 2% year-on-year target, keeping alive expectations it would exit negative rates by April.

Tokyo’s Nikkei crept 0.4% higher to eke a fresh record high. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, keeping beneath last week’s seven-month peak. [.T]

Wall Street indexes fell overnight and S&P 500 and Nasdaq futures nudged 0.1% lower in morning trade. [.N]

The Federal Reserve’s favoured measure of inflation – the core personal consumption expenditures (PCE) price index – is due on Thursday and forecasts are for a rise of 0.4%.

“If as expected, the core m/m reading would be the highest since last February and fit with the patience message from the Fed,” said analysts at ANZ Bank.

Rate jitters and enormous auctions – $127 billion on Tuesday and another $42 billion on Wednesday – left Treasuries under pressure, though yields steadied in the Asia morning. [US/]

Ten-year U.S. Treasury yields were last 2 basis points lower at 4.27%. Two-year yields fell four basis points to 4.70%.

Markets have already pushed out the likely timing of a first Federal Reserve easing from May to June, which is currently priced at around a 70% probability. Futures imply a little more than three quarter-point cuts this year, compared to five at the start of the month.

On the geopolitical front, U.S. President Joe Biden said he hopes to have a ceasefire in the Israel-Hamas conflict in Gaza start by next Monday as the warring parties appeared to close in on a deal.

Brent crude futures kept to recent ranges, rising 0.2% or 16 cents to $82.69 a barrel. [O/R]

Figures on inflation in the European Union are also due this week, on Friday, with the core gauge again seen slowing to the lowest since early 2022 at 2.9% and bringing nearer the day when the European Central Bank (ECB) might ease policy.

Markets are almost fully priced for a first cut in June, with April seen as a 36% chance. In speeches on Monday, ECB President Christine Lagarde and Bank of Greece Governor Yannis Stournaras again pointed to a reticence to rush in to cuts.

Bank of England deputy Dave Ramsden and Riksbank Governor Erik Thedeen appear later on Tuesday while a smattering of mostly second-tier U.S. and European data are due including consumer confidence for Germany, France and the U.S.

Currency trade was fairly subdued in early Asian hours, with recent pressure on the Australian and New Zealand dollars extending. The Aussie fell 0.1% to a one-week low of $0.6530, squeezed by a tumble in iron ore prices. [IRONORE/]

The kiwi was down 0.3% and also at a week low as traders trimmed wagers that New Zealand’s central bank might even hike interest rates when it meets on Wednesday.

“With 9 bp priced, we see modest NZD weakness on the announcement,” said NatWest Markets currency strategist Antony George.

The euro held steady at $1.0848 and sterling inched down to $1.2676. Bitcoin rose sharply overnight on news that software firm MicroStrategy added to its holdings. It was steady at $54,777. Gold held at $2,032 an ounce. – Reuters

The ringgit eased against the US dollar in early trade on Tuesday due to a lack of catalysts, said an analyst.

At 9:05am, the local currency was pegged at 4.7775/7805 against the greenback compared with Monday’s close of 4.7750/7795.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said there is little room for the ringgit to appreciate further, although technical indicators suggest that the local note is already in the oversold region.

“Prevalent views on the US Federal Reserve’s restrictive monetary stance will continue to be the main pillar for a strong dollar for quite some time,” he told Bernama.

He said the US dollar index appears to have taken a breather after reaching its peak at 104.960 points on Feb 13 and it is currently hovering at around 103.827.

Mohd Afzanizam said the market would be paying close attention to the upcoming US personal consumption expenditures (PCE) inflation to be released on Thursday.

“In adddition, other major economies have been quite careful in their monetary policy stance.

“As such, the ringgit is expected to trade at around RM4.77 today,” he said.

Meanwhile, the ringgit was traded lower against a basket of major currencies.

The local currency eased vis-a-vis the Japanese yen to 3.1729/1751 from 3.1696/1728 at Monday’s close, fell against the British pound to 6.0574/0612 from 6.0552/0609, and slipped versus the euro to 5.1822/1854 from 5.1756/1805 previously.

The ringgit also was traded mostly lower against other Asean currencies.

The local note rose versus the Thai baht to 13.3074/3217 compared with 13.3190/3375.

However, it was down against the Singapore dollar at 3.5542/5567 compared to 3.5523/5559 at Monday’s close, slipped versus the Philippine peso to 8.52/8.53 from 8.51/8.52, and declined vis-a-vis the Indonesian rupiah to 305.6/306.0 from 305.4/305.9 previously. – Bernama

Oil prices ticked up in early Asian trading on Monday, extending gains for the third straight day, as shipping disruptions spurred supply worries.

Brent crude futures rose 16 cents, or 0.2 per cent, to $82.69 a barrel by 0106 GMT, while U.S. West Texas Intermediate crude futures (WTI) climbed 15 cents, or 0.2 per cent, to $77.73 a barrel.

Both benchmarks had settled more than 1 per cent higher on Monday.

Iran-aligned Houthis have continued their attacks on shipping in the Red Sea, and while the Israel-Hamas war has not significantly constrained oil supply, it has increased freight rates and shipping time, leaving barrels on the water for longer.

U.S. President Joe Biden said on Monday he hopes to have a ceasefire in the Israel-Hamas conflict in Gaza start by next Monday as the warring parties appeared to close in on a deal during negotiations in Qatar that also aim to broker the release of hostages.

In public, Israel and Hamas continued to take positions far apart on a possible truce, while blaming each other for delays.

Meanwhile, Kansas City Federal Reserve Bank President Jeffrey Schmid on Monday used a debut speech on policy to signal that he, like most of his central banking colleagues, is in no rush to cut interest rates. High borrowing costs typically reduce economic growth and oil demand. – Reuters

Malaysian businesses are paying a high price for their country’s weak currency that is making importing material and servicing foreign debt costlier.

With the ringgit hitting a 26-year low, industries from airlines to raw material-intensive sectors are particularly at risk, according to S&P Global Ratings.

The ringgit has slid to its lowest level since the Asian financial crisis in the late 1990s and the government has assigned the central bank to closely monitor the currency, Malaysian Prime Minister Datuk Seri Anwar Ibrahim said Friday.

The local currency last week slipped past 4.8 against the dollar, the weakest level since January 1998, during the height of the Asian financial crisis.

“We have already been feeling the impact as the ringgit has been falling,” said Chin Chee Seong, national secretary general at the SME Association of Malaysia. “Now it will be even more severe. Those of us in the services sector that import materials and products will lose even more.”

The weak ringgit could add strain to Malaysia Airlines Bhd., still recovering from restructuring its debt in 2021, as well as budget-carrier AirAsia.

“The airline sector is the most exposed to risks due to currency mismatch in operations,” said Xavier Jean, S&P senior director for corporate ratings in Singapore, adding that they have expenses, including fuel and leases, in dollars and revenue in ringgit. 

“Debt in these companies is often denominated in dollars,” Jean said. “They have the double whammy of operating and financial exposure to currency depreciation.”

Malaysia Airlines declined to comment about the impact of the currency weakness on the company’s bottom line.

AirAsia Group CEO Tony Fernandes said in an interview he isn’t concerned about the ringgit “as it’s mostly sentiment.” While 70% of the carrier’s costs are paid in dollars, “we have good ancillary income and fares are strong,” helping to buffer the company against the weak local currency, he said.

Construction companies that depend on imported raw material, as well as telecommunication firms, whose capital spending are in dollars, also face a financial fallout, S&P said.

For Axiata Group Bhd, Malaysia’s biggest wireless carrier, the biggest concern is the rising cost of servicing debt. The company has about US$3.6 billion (RM17.2 billion) of dollar debt.

“The real concern is we have a large dollar debt, about 50% of that is hedged already,” said Vivek Sood, the company’s chief executive officer.

Some companies, such as state-owned oil and gas company Petroliam Nasional Bhd, are in a position to benefit from the plunge in the ringgit. A significant amount of its operations is either in foreign markets or pegged to the dollar, S&P said.

Sime Darby Plantation Bhd said the weak ringgit is beneficial for the company, as well, because its revenue is in dollars.

“That is actually very promising for us,” said chief financial officer Renaka Ramachandran. “We bring in dollars and convert them into ringgit.” – Bloomberg