COMMODITY SECTOR TO LEND SUPPORT TO ECONOMIC GROWTH, SAYS MIDF RESEARCH

KUALA LUMPUR, Jan 4 (Bernama) -- Although the Malaysian economy is expected to
face a tough hurdle in seeing exports pick-up in the first-half of the year, the
commodity sector will lend support to export growth, says MIDF Amanah Investment
Bank Bhd.

It attributed the hurdle to global uncertainties that would continue to dampen
external demand for electrical and electronics and a stronger ringgit, which was
likely to average at 3.00 against the US dollar.

"We believe sustainable demand from China and India which are significant
consumers of raw materials will keep commodity prices firm in 2011," MIDF said
in its research report Tuesday.

MIDF projected crude oil price to average at US$105 per barrel and crude palm
oil at RM3,400 per tonne. (US$1=RM3.09)

It also projected China's real Gross Domestic Product for the year at 9.2 per
cent from 9.6 per cent last year while that for India at 9.3 per cent from 9.5
per cent in 2010.

MIDF said November exports improved 5.3 per cent, year-on-year, due
to stronger raw material edemand from China including palm oil, rubber and chemicals.

Exports to China surged 14.2 per cent, year-on-year, in November last year after
having contracted the past two months, it said.

"The strong demand from China buffered the contraction in exports to the United
States for the third consecutive month, down by 16.9 per cent, year-on-year, in
November 2010.

"Also lending support to export performance in November 2010 was the low base
effect.

"But the upside to export growth was contained by the continuous sluggish
external demand for electrical and electronics, down for the third consecutive
month by 11.6 per cent, year-on-year, from -5.9 per cent, year-on-year, in
October 2010," MIDF said.

Thus, the year-to-date exports grew 17.7 per cent year-on-year.

MIDF said imports remained healthy in November 2010, rising 6.1 per cent
year-on-year, from 12.5 per cent year-on-year in October 2010, bringing the
year-to-date average to 25.7 per cent year-on-year.

"We attribute the sustainable import growth to a more resilient domestic demand,
firmer growth in capital investment and improving consumer sentiment on the back
of better economic performance," it added.
-- BERNAMA



Delete & Prev | Delete & Next