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BusinessToday
21-05-2025
- Business
- BusinessToday
Kenanga Revises Malaysia's FY GDP Downward To 4.3%
Malaysia's exports surged 16.4% year-on-year in April, marking a four-month high and far exceeding expectations, driven by robust demand for electrical and electronic (E&E) products and stronger shipments to major trade partners such as the US and Singapore, according to a trade report by Kenanga Investment Bank (KIBB). The export growth sharply beat market forecasts (KIBB: 7.2%, consensus: 7.8%) and followed a 6.8% rise in March. However, on a month-on-month (MoM) basis, exports dipped 2.7% following a strong 16.1% jump in March, indicating a cooling in momentum. E&E Products and US Demand Power Growth Exports were buoyed by a 35.4% surge in E&E products, the fastest pace since September 2022, amid a broader global tech upcycle driven by artificial intelligence and new tech product launches. By destination, shipments to the US jumped 45.6%, while exports to Singapore rose 26.1%. There were also rebounds in exports to Japan (6.8%) and China (2.1%), though growth to the EU moderated to 5.8%. By sector, manufacturing exports soared 19.0%, the highest in 31 months. However, this was partially offset by weaker mining exports (-1.3%) and a slower pace in agriculture exports (3.5%). Notably, liquefied natural gas (LNG) exports rebounded 6.7% after four consecutive months of contraction. Imports Rebound Sharply Imports surprised to the upside, rebounding 20.0% year-on-year after a 2.9% decline in March, smashing expectations (KIBB and consensus: 3.3%). The rebound was led by a 46.0% surge in re-exports and a 12.9% recovery in retained imports. Capital goods imports skyrocketed 114.1%, offsetting continued weakness in intermediate (-1.7%) and consumption goods (0.7%). On a monthly basis, imports rose 14.1%, a sharp acceleration from 6.5% in March, defying typical seasonal patterns. Trade Surplus Shrinks Sharply Despite the export gains, Malaysia's trade surplus narrowed drastically to RM5.2 billion, far below KIBB's forecast of RM19.0 billion and the consensus estimate of RM14.7 billion. This was due to the significant rise in imports outpacing export growth. Total trade surged 18.2% year-on-year, the highest in eight months, though MoM growth slowed to 4.8% from March's 11.6%. Outlook: Short-Term Boost, Long-Term Risks Despite the strong April figures, Kenanga has revised Malaysia's 2025 export growth forecast downward to 3.1% (from 5.0%), citing mounting risks in the second half of the year. Key drivers include: A front-loading of exports in Q2 as businesses move to avoid potential US tariffs. Ongoing strength in the global tech sector, particularly in AI and semiconductor-related products. Possible trade diversion amid continued US-China decoupling. However, risks abound, particularly from US policy uncertainty tied to the 90-day pause in President Trump's reciprocal tariff measures, which may end in July. The potential reimposition of tariffs could weigh on global trade, particularly in 2H25. A sluggish recovery in China also adds downside risk. GDP Forecast Cut Following weaker-than-expected Q1 GDP growth (4.4%), Kenanga has revised Malaysia's full-year 2025 GDP forecast to 4.3% from 4.8%. Still, the bank expects robust Q2 trade activity, as shown in April's numbers, to provide some buffer against anticipated headwinds in the latter half of the year. 'April's trade performance reflects strong global demand and pre-tariff frontloading. But sustainability remains in question as geopolitical and macroeconomic risks mount,' the report noted. Related
The Sun
07-05-2025
- Business
- The Sun
Life Water plans smart manufacturing line in Sandakan
SANDAKAN: Life Water Bhd, a homegrown bottled water manufacturer, is currently in the midst of setting up an additional drinking water manufacturing line at its existing Sandakan Sibuga Plant 1. This development forms part of the company's expansion strategy outlined in its Initial Public Offering (IPO) prospectus. The new manufacturing line is expected to be operational in the second half of 2025 and will boost the company's annual drinking water production capacity by an additional 178 million litres. With the recent commencement of its Keningau Plant, Life Water's current annual drinking water production capacity stands at 448 million litres. Upon completion of the new line at Sandakan Sibuga Plant 1, the group's total capacity will increase to 626 million litres per annum. The capital expenditure for this project is approximately RM19.0 million. 'The upcoming line not only supports our growth plans but is also designed with sustainability and efficiency at its core,' Life Water managing director Liaw Hen Kong said. 'It underscores our commitment to adopting Industry 4.0 practices, while continuing to deliver quality drinking water to more Malaysians. 'In line with Industry 4.0 practices, the new manufacturing line will be equipped with automated systems to enhance operational efficiency. 'With smart control systems and energy-efficient technology in place, the company anticipates substantial utility savings – estimated at 29,700 tonnes of water and 215,424 kWh of energy per year. 'The new line will also support our bottle light-weighting efforts, allowing the company to reduce plastic usage and lower overall carbon emissions throughout the production and distribution process,' Liaw said. 'These improvements are part of our broader strategy to scale up responsibly and contribute to a low-carbon, resource-efficient future.' This expansion marks another important step in Life Water's journey to scale up its operations responsibly and sustainably, in line with growing consumer demand and the company's long-term vision.
