Malaysia's October exports rise 12.4%

Malaysia's October exports rise 12.4%

Stephanie Phang, Bloomberg, Kuala Lumpur

Malaysian exports in October expanded faster than expected as manufacturers such as Malaysian Pacific Industries Bhd. shipped more semiconductors, disk drives and laptop computers to meet rising overseas demand.

Exports rose 12.4 percent to 49.64 billion ringgit (US$13.13 billion), the trade ministry said today in a faxed statement in Kuala Lumpur. That's more than the 10.9 percent median forecast in a Bloomberg survey of nine economists. Exports had risen 7.4 percent in September from a year earlier.

Central Bank Governor Zeti Akhtar Aziz on Nov. 30 said she expects rising overseas sales of electronics to help the $118 billion economy expand as much as 6 percent this year. Malaysia's economic growth accelerated to 5.3 percent in the third quarter from a three-year low of 4.4 percent in the second.

"It seems like the fourth quarter started on a healthy note," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. "The pick up that we saw in the third quarter GDP should be sustained going into next year."

Malaysia joins other Asian exporters including Singapore and Taiwan who are benefiting from rising global demand for technology goods such as Apple Computer Inc.'s iPod digital players and Microsoft Corp.'s Xbox games consoles.

Rising global demand for such devices in the second half of the year is fueling orders for semiconductors made by manufacturers including Malaysian Pacific, the country's largest chip assembler. Electronics account for about half of overseas sales and exports amount to more than 125 percent of gross domestic product in Southeast Asia's third-largest economy.

Exports may expand 21 percent in November from a year earlier, said Leslie Tang, an economist at UOB Kay Hian Research in Singapore. "Demand seems to have picked up, especially for electronics," he said.

Overseas sales of electrical and electronics goods, including semiconductors, increased 11 percent from a year earlier, faster than the 6.6 percent gain in September and a 10 percent rise in August. Such products made up 50 percent of exports in October.

Global semiconductor sales rose 6.8 percent to a monthly record of US$20.05 billion in October from a year earlier, the Semiconductor Industry Association said Dec. 2. Demand for consumer electronics and personal computers, helped by "a sharp rebound in consumer confidence," has kept chip sales on track to rise 6.8 percent to $228 billion this year, the group said.

That's helping companies such as Malaysian Pacific, which said last month it expects sales to rise at a faster pace this quarter as it wins more orders from new customers. Managing Director David Comley told analysts on Nov. 22 that sales may gain about 10 percent in the three months ending Dec. 31 from the quarter before, compared with a 6.6 percent increase in the previous three months.

Malaysia's exports to the U.S., its biggest market, rose 15.5 percent in October from a year earlier, boosted by higher sales of electrical and electronics goods and optical and scientific equipment, today's statement showed. Sales to the U.S. gained 12.8 percent in September. The U.S. accounted for 20 percent of Malaysia's exports in October, the ministry said.

Exports to China surged 25 percent from a year earlier to 3.45 billion ringgit, while shipments to India jumped 49 percent. Sales to both countries were bolstered by shipments of electrical and electronics and chemicals and chemical products.

"The U.S. and China continue to support global export demand," Action Economics' Cohen said.

Malaysia's exports to the European Union, which accounted for 12 percent of exports, rose 4.5 percent from a year earlier, while sales to Japan, its third largest market, fell 0.8 percent to 4.29 billion ringgit.

Crude oil exports expanded 22 percent in October from a year earlier, faster than the 10 percent gain in September. Oil accounted for 6 percent of exports in October. Malaysia is Southeast Asia's second-largest oil and gas producer after Indonesia.