1. Malaysia registers highest month-on-month export growth since 2010
  2. Finance Ministry maintains GDP growth projection
  3. Economists split on BNM key rate cut
  4. US & Singapore to return to Malaysia nearly RM1b in funds linked to 1MDB scandal
  5. Proton sells 7,011 cars in April, in second spot for first time since February 2016
  6. Huawei Overtakes Apple to Become Second Biggest Smartphone Maker

Malaysia registers highest month-on-month export growth since 2010
Malaysia has recorded the highest month-on-month export growth since April 2010 when exports in March this year grew by 26.2 per cent while total trade surged by 25.9 per cent. Based on the data released by the International Trade and Industry Ministry, imports and trade surplus expanded by 25.4 per cent and 30 per cent respectively, with higher trade registered with China, Saudi Arabia, Taiwan, Australia and the United States. “Exports of manufactured goods in March 2019 which accounted for 84.2 per cent of total exports expanded by 1.5 per cent to RM70.81 billion. “This was attributed to higher exports of petroleum products, optical and scientific equipment, chemicals and chemical products, processed food as well as paper and pulp products,” it said in a statement today on trade performance for March 2019 and the period of January to March 2019. “During the first quarter of 2019, exports of manufactured goods expanded by 0.3 per cent to RM196.88 billion compared to Q1 2018, supported by higher exports of electrical and electronics (E&E) product, chemicals and chemical products, jewellery, optical and scientific equipment, paper and pulp products as well as processed food,” it said.

Finance Ministry maintains GDP growth projection despite strong economic growth
Despite a positive outlook for the Malaysian economy, the Finance Ministry remains cautious and maintains its gross domestic product (GDP) growth projection for 2019 at 4.9 per cent. Finance Minister, Lim Guan Eng said the ministry welcomes the latest Nikkei Manufacturing Purchasing Managers’ Index (PMI) reading for Malaysia, which rose to 49.4 points in April 2019 from 47.2 points in the previous month. “This is the highest level recorded in seven months. Nikkei, in its PMI note, wrote that the April 2019 reading indicated a 5.2 per cent expansion in this year’s GDP, which is higher than the 4.9 per cent growth projected by the ministry. “Nevertheless, the Finance Ministry will remain cautious and maintain its current growth projection for this year,” He said the rise in the PMI for April is attributable to a number of factors, including an increase in export orders, employment growth, investment in new machines and plants, as well as improved business confidence built on policy clarity and certainty provided by the government’s reform agenda. “According to Nikkei, the April business confidence level is the highest since Oct 2013. “Furthermore, the increase in new investment is a direct result of the government’s ability to grow Malaysia’s approved foreign direct investment (FDI) by 48 per cent to RM80.5 billion in 2018 from RM54.5 billion in 2017.

Economists split on whether Bank Negara will cut key rate on May 7
According to a Reuters poll, a slim majority of economists feel that Malaysia’s central bank is likely to cut its benchmark rate to 3% at a policy review on Tuesday to cope with a slowdown in growth. Seven of 13 economists polled see a 25 basis point rate cut while the other six said Bank Negara Malaysia (BNM) would hold its overnight policy rate unchanged for now. Malaysia last cut its policy rate in July 2016, to 3.0 percent after Britain voted for Brexit. The rate was raised to 3.25 percent in January 2018. ING economist Prakash Sakpal said Malaysia’s economy could use help from a more accommodative monetary policy as it faces persistent risks to trade, along with “anaemic investment spending.” “Being ahead of the curve should allow sufficient time for the impact of monetary easing to trickle down to the real economy, thus preparing the economy to ride the slowdown trend. It won’t hurt that there is scope for easing now,” Sakpal said, noting soft inflation. In March, the central bank cut its economic growth forecast for this year to 4.3-4.8 percent from an initial forecast of 4.9 percent, and projected a significant drop in export expansion due to slowing global growth and the U.S.-China trade war. Exports shrank a second consecutive month in March, declining 0.5 percent from a year earlier on weak demand for commodities. In March, the consumer price index rose for the first time this year, gaining 0.2 percent from a year earlier. Analysts expect cost pressures to remain benign for the rest of 2019.

Two weeks ago, Morgan Stanley said Malaysia could see outflows of nearly $8 billion if its bonds are downgraded after a review by global index provider FTSE Russell. On Friday, OCBC said when BNM makes its decision, low inflation “will have to be balanced against the recent uptick in the USD/MYR and news of the World Global Bond Index review and the omission of Emerging Market government and corporate bonds from the Norges Bank’s Government Pension Fund Global fixed-income benchmark.” OCBC sees the key rate getting reduced to 3 percent in the third quarter, not now. A rate cut on Tuesday would be a “tactical and pre-emptive” move to counter rising downside risks to the economy and benign inflationary outlook, Standard Chartered said in a note on Friday.

US & Singapore to return to Malaysia nearly RM1b in funds linked to 1MDB scandal
Bloomberg reported today that the United States authorities are working towards returning around US$200 million (RM828.4 million) of funds that was said to have been misappropriated from the scandal-plagued fund 1Malaysia Development Bhd (1MDB) to Malaysia. Quoting anonymous sources, the report said this would include US$140 million from selling a stake in New York’s Park Lane Hotel and around US$60 million from a settlement paid by the Wolf of Wall Street film’s producer. In a separate report, Bloomberg said Singaporean authorities are also planning to return around S$35 million linked to 1MDB previously given up by former Goldman Sachs Group banker Roger Ng and his family. In total, the money returned from both the US and Singapore will amount to around US$226 million, or RM936 million. According to Bloomberg, the transfer from the US could happen as early as next week. Authorities in at least six countries are investigating suspected money laundering and graft linked to 1MDB, set up in 2009 by the then Malaysian prime minister, Datuk Seri Najib Razak.

Proton sells 7,011 cars in April, in second spot for first time since February 2016
Proton sold 7,011 cars in April, underpinned by the sales of the Proton Saga and Proton X70, as it took second spot in month sales for the first time since February 2016. The sales figure was an increase of 14.1% over March and a 75% improvement over April 2018, it said in a statement today. “This was achieved despite a downturn in TIV that contracted by 6.2% month-on-month making Proton the only automotive brand ranked in the top five to record positive growth. This fact is also reflected in overall sales growing by 50.2% so far this year,” it said. It said that strong sales performances by the Proton Saga and Proton X70 are the main drivers for the achievement but sales also received a boost following the official launch of the 2019 Proton Iriz and Persona on April 23. Proton CEO  Dr Li Chunrong said “Our aim is to try and end the year in second place to create a solid base for our long-term goal of leading the Malaysian car market again.

Huawei Overtakes Apple to Become Second Biggest Smartphone Maker
Huawei overtook Apple to claim the No. 2 spot in smartphones in the first quarter, moving a step closer to its avowed ambition of displacing Samsung at the top of the market. Huawei grew shipments 50 percent from a year earlier, research firm IDC estimates. It was the only name in the top 4 that managed to expand volumes as the overall market slid for the sixth consecutive quarter. Huawei’s been steadily gaining on Apple and Samsung with an increasingly high-end line-up of devices, particularly in its home market of China. The iPhone maker this week projected quarterly sales that topped analysts’ estimates, suggesting demand for iPhones has stabilized after a disappointing holiday period. Samsung also enjoyed a spike compared with the fourth quarter thanks to the launch of the marquee S10 range in February. IDC reckons Huawei should cling to the No. 2 spot over the rest of 2019. “The overall smartphone market continues to be challenged in almost all areas, yet Huawei was able to grow shipments by 50 percent,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers. “This new ranking of Samsung, Huawei, and Apple is very likely what we’ll see when 2019 is all said and done.”