Malaysian exports rebound in December
Exports rose 18.7% y-o-y to RM54.7 billion in December after declining 3.3% in November, according to the Ministry of International Trade and Industry. It is the biggest jump in 17 months, prompting the government to forecast higher exports in 2010. Meanwhile, imports rose 23.3% y-o-y to RM42.58 billion, resulting in a trade surplus of RM12.1 billion. For the full year, exports declined 16.6% to RM553.3 billion while imports fell 16.6% to RM434.9 billion, resulting in an annual trade surplus of RM118.35 billion.

Malaysia’s FDI down 52.1%
Malaysia’s approved manufacturing investments shrank 48% to RM32.6 billion last year, from RM62.8 billion in 2008, as global foreign direct investment flows took a hit from the economic crisis, according to the Malaysian Industrial Development Authority. Of this amount, foreign investments accounted for 67.8%, or RM22.1 billion, a decline of 52.1%. Capital-intensive projects formed the bulk of total approved investments. These included chemicals and chemical products (RM8.4 billion or 25.7% of total approvals), followed by non-metallic mineral products (RM6.4 billion or 19.7%) and electronic and electrical products (RM4.7 billion or 14.5%). Japan was the largest foreign investor with approved investments of RM7 billion, or 31.8% of total foreign approvals, reflecting largely the approval of four projects in the chemical and chemical products industry worth RM1.6 billion. Other major investors were Hong Kong (RM5.3 billion or 24%) and the US (RM2.3 billion or 10.6%).

Indonesia maintains interest rate
Indonesia’s central bank on Feb 4 kept its key policy interest rate unchanged at 6.5% for a sixth straight month. This was despite the inflation rate picking up 3.7% y-o-y in January, the highest in seven months, as it was of the view that inflation is still not high enough to warrant higher borrowing costs.

Europe leaves interest rate unchanged
The European Central Bank left its main interest rate unchanged at the record low of 1% for a ninth consecutive month. With the bank expecting inflation and economic growth to remain “moderate”, financial markets have not factored in any interest rate rise until at least late this year.

US factory new orders stable
US factory new orders remained stable, rising 1% m-o-m in December, the same rate of increase as in November. This was better than economists had forecast and the fourth successive month of increase, suggesting that manufacturing will likely sustain its expansion in the months ahead.

US services improve in January
The US Purchasing Managers Index (PMI) of the Institute for Supply and Management (ISM) for non-manufacturing activity rose to 50.5 in January, from 49.8 in December and 48.4 in November. The non-manufacturing index comprised mainly services. A reading above 50 indicates expansion of activity and prices in the non-manufacturing sector and vice versa. This suggests that services activities grew moderately during the month, indicating that the recovery will be slow to spread from manufacturing to services as a recovery in consumer spending remains gradual. The improvement was driven by a pick-up in new orders. This was, however, offset partially by a slowdown in business activity and sharper declines in a backlog of orders.
US economy grows 5.7%
The US economy strengthened to an annualised rate of 5.7% in 4Q, from 2.2% in 3Q and -0.7% in 2Q. This was the fastest rate of increase in six years, suggesting that the US economy is on a recovery. The reading came in higher than market expectations of 4.7% and brings the full-year growth contraction to 2.4%, marking the biggest drop in 63 years and first annual decline for the economy since 1991.

Euro zone’s retail sales unchanged in December
Euro zone’s retail sales stagnated in December, after falling by 0.5% m-o-m in November. Sales of food, drink and tobacco inched up 0.3% m-o-m in December, marginally higher than 0.2% in November, while sales of non-food products fell by 0.2%, compared with -0.7% during the same period. Y-o-y, retail sales in the 16 countries using the euro fell 1.6% in December, compared with -2% in November.