Kenanga Expects Robust Recovery In Manufacturing, Export-oriented Industries In 2h

KUALA LUMPUR, June 5 (Bernama) -- Kenanga Investment Bank Bhd expects a robust recovery in Malaysia’s manufacturing sector and export-oriented industries in the second half of the year (2H).

The outlook is mainly backed by the technology upcycle coupled with the expected recovery of China’s economy and overall global trade activities, Kenanga said in a research note today.

“However, the renewed trade tensions between China and the United States alongside the ongoing tensions in the Middle East and the Rusia-Ukraine war, would likely pose a significant downside risk to the economic outlook due to the impact on global supply chain and trade activities,” it said.

Given the better-than-expected first quarter of this year’s gross domestic product (GDP) growth of 4.2 per cent, Kenanga firmly stands with its bullish outlook on GDP, with the estimated projection of 4.5 per cent to 5.0 per cent for 2024.

This aligns with the Ministry of Finance and Bank Negara Malaysia’s projections of 4.0 per cent and 5.0 per cent.

It was reported that Malaysia’s Manufacturing Purchasing Managers’ Index (PMI) increased to 50.2 in May (April: 49.0), marking the first expansion since July 2022, largely driven by the improvement in job creation, production and new businesses.

Production marginally expanded backed by improved demand conditions and new demand orders, noted Kenanga.

The expansion was led by improved external demand following higher export orders which boosted the PMI to nudge above the negative threshold.

“Optimism among firms remained positive, but the level of confidence waned, marking the lowest level in nine months, but improved demand conditions in May provide a promising positive outlook ahead,” it said.

-- BERNAMA