AmWatch - Econ Watch : BNM anticipates better external demand in 2014, 20 Mar 2014

FOCUS OF THE DAY

Econ Watch : BNM anticipates better external demand in 2014

BNM expects real GDP growth of 4.5%-5.5% in 2014 owing to better performance of external sector amid softer domestic demand. Domestic demand is anticipated to grow at a softer pace of 6.9% during the year, driven mostly by the strong growth in private investment (2013: +7.6%).

As for inflation, the Bank foresees higher prices on the back of ongoing fiscal reforms. Inflation will probably elevate to 3.0%-4.0% this year vs. 2.1% in 2013. Meanwhile, full-year current account will register a surplus of RM30.8bil in 2014 (2013: RM37.3bil). 

Despite the stronger exports, trade surplus is expected to moderate in 2014. In the balance of payment account, the balance of goods and services will likely moderate to RM93.7bil (2013: RM102.7bil). The Monetary Policy Committee will continue to ensure that macroeconomic conditions and policies remain accommodative to facilitate growth in the midst of continued uncertainties in the global environment.

Separately, BNM announced yesterday that effective 2 Jan 2015, the Base Rate will replace the Base Lending Rate (BLR) as the main reference rate for new retail floating rate loans. The new rate will be determined by the financial institutions’ benchmark cost of funds and the SRR.

Others :

Banking Sector : Base rate to replace Base Lending Rate                NEUTRAL

NEWS HIGHLIGHTS

Berjaya Auto : Unit sees Mazda sales jump in 2014

Tropicana Corp : Sells land for RM470.67mil

Construction Sector : MRT Corp: KL Sentral walkway tunnel to cost RM340mil

Water Sector : Khalid wants federal government to invoke WASIA

Banking Sector : Base Rate to replace BLR next year

Banking Sector : Islamic banking institutions get 2-year transition

Property Sector : BNM tracking loans for property sector

DISCLAIMER:

The information and opinions in this report were prepared by AmResearch Sdn Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmResearch Sdn Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmInvestment Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgement as of this date and are subject to change without notice.