KUALA LUMPUR (Dec 6): CIMB IB Research said Malaysia posted a record trade surplus of RM16.3 billionn in Oct as gross exports hit a new high on sturdy O&G and manufactured outward shipments.

In an economic update Dec 5, the research house said Oct’s trade performance handily beat expectations, with trade surplus hitting a record high of RM16.3 billion (+RM15.2 billion in Sep).

It said gross exports increased 17.7% year-on-year (y-o-y) to RM96.4 billion (+6.5% y-o-y in Sep), while gross import growth rebounded to +11.4% y-o-y, after a brief 2.8% y-o-y contraction in Sep as the Sales & Service Tax kicked in.

CIMB Research said the improvements in trade activity echo similar trends elsewhere in Asia (South Korea, Taiwan, Singapore, Thailand, and India) on favourable base effects, as well as some signs of regional inventory restocking.

It said the 90-day trade truce between the US and China which includes holding off planned increases in bilateral tariffs from 10% to 25% on 1 Jan next year offers a temporary reprieve after the build-up in trade frictions throughout this year.

“However, risks have not abated completely, amid slowing global growth next year, tightening financial conditions and the still-cautious sentiment over the dimming trade outlook, as evidenced by the dip in Malaysia’s manufacturing PMI from 49.2 in Oct to 48.2 in Nov,” it said.