The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
JF Apex Securities Berhad released a research report on Malaysia's export data.
PASSIVE GROWTH IN EXPORTS
Malaysian export in December 2015 stood at RM68.3 billion, having increased 1.4% year-on-year. In comparison, November's growth was at 6.3%.
The Malaysian's export figure in December was below JF Apex Securities' expectation at 6.2% and the market consensus of 4.9% respectively. The weaker than expected results was due to contraction in export of main products including Refined petroleum products, Liquefied natural gas (LNG), crude petroleum products and palm oil and palm-based products. Other main products such as timber and timber-based products also seen slower export growth in Dec, 15. On a monthly basis, exports rose slightly by 1.0%.
MODERATE READING IN IMPORTS
Moderate reading in imports in Dec, 15 of RM60.3 billion, rising 3.2% year-on-year while November was at a 9.1%.
"This result came below our expectation and market consensus of +6.1% and +4.1% respectively," said the research house.
Strong decline in import of capital goods was the main reason for the moderate growth. In comparison to the previous month, imports increased 5.1% due to positive growth in two of its main components.
As such, the country's trade surplus in Dec, 15 was RM8.0 billion, declined on yearly and monthly bases of 10.3% and 22.0% respectively.
E&E products continued uptrend while semiconductor industry in negative growth
The E&E products, which contributed 36.5% of total export, continued its positive growth of 6.4% y-o-y while declining 7.3% m-o-m.
According to Semiconductor Industry Association (SIA), global semiconductor sales were 5.2% y-oy lower in Dec’15 while declining 4.4% m-o-m due to softening demand and strengthened US dollar.
Slower growth in imports on yearly basis
Total imports in Dec’15 recorded a moderate growth of 3.2% y-o-y mainly caused by contraction in its main component, capital goods which declined strongly by 15.2% y-o-y (vs Nov’15: +2.6%) due to the negative growth in transport equipment, industrial and capital goods.
Meanwhile, import of consumption goods increased +37.8% compared to +43.8% in Nov’15.
For Jan’16, we opine that export and import will continue to post moderate growth of 3.0% and 4.3% respectively following softer growth recorded in Dec’15, coupled with shrinking economy growth in our main trading partners especially China after its PMI data skidded to a three-year low point in January’16 and marked the sixth straight month in contraction territory.
PASSIVE GROWTH IN EXPORTS
Malaysian export in December 2015 stood at RM68.3 billion, having increased 1.4% year-on-year. In comparison, November's growth was at 6.3%.
The Malaysian's export figure in December was below JF Apex Securities' expectation at 6.2% and the market consensus of 4.9% respectively. The weaker than expected results was due to contraction in export of main products including Refined petroleum products, Liquefied natural gas (LNG), crude petroleum products and palm oil and palm-based products. Other main products such as timber and timber-based products also seen slower export growth in Dec, 15. On a monthly basis, exports rose slightly by 1.0%.
MODERATE READING IN IMPORTS
Moderate reading in imports in Dec, 15 of RM60.3 billion, rising 3.2% year-on-year while November was at a 9.1%.
"This result came below our expectation and market consensus of +6.1% and +4.1% respectively," said the research house.
Strong decline in import of capital goods was the main reason for the moderate growth. In comparison to the previous month, imports increased 5.1% due to positive growth in two of its main components.
As such, the country's trade surplus in Dec, 15 was RM8.0 billion, declined on yearly and monthly bases of 10.3% and 22.0% respectively.
E&E products continued uptrend while semiconductor industry in negative growth
The E&E products, which contributed 36.5% of total export, continued its positive growth of 6.4% y-o-y while declining 7.3% m-o-m.
According to Semiconductor Industry Association (SIA), global semiconductor sales were 5.2% y-oy lower in Dec’15 while declining 4.4% m-o-m due to softening demand and strengthened US dollar.
Slower growth in imports on yearly basis
Total imports in Dec’15 recorded a moderate growth of 3.2% y-o-y mainly caused by contraction in its main component, capital goods which declined strongly by 15.2% y-o-y (vs Nov’15: +2.6%) due to the negative growth in transport equipment, industrial and capital goods.
Meanwhile, import of consumption goods increased +37.8% compared to +43.8% in Nov’15.
Weaker expansion in 2015
Malaysia’s exports posted a slower growth of +1.8% y-o-y compared to +6.8% in 2014 mainly due to the continued slowdown in our main trading partners’ economies including China which posted a weaker PMI data that also lead to softer export of our products.
Furthermore, the export performance also weighed down by lower sales of commodity-based products due to lower prices of crude oil, palm oil and natural rubber.
Similarly, total import in 2015 only inched up by +0.5% y-o-y (vs 2014: +5.4%) owing to decrease in import from main trading partners on the back of weaker domestic demand, after a Goods and Services Tax (GST) took effect on April 1, 2015 as most imported goods are subject to GST.
MODERATE GROWTH IN EXPORT AND IMPORT TO FURTHER IN 2016
For Jan’16, we opine that export and import will continue to post moderate growth of 3.0% and 4.3% respectively following softer growth recorded in Dec’15, coupled with shrinking economy growth in our main trading partners especially China after its PMI data skidded to a three-year low point in January’16 and marked the sixth straight month in contraction territory.
Going forward, our trade performance will be supported by higher growth in E&E products and recovery in semiconductor industry.
Source: JF APEX SECURITIES BHD RESEARCH
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