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Saturday, September 27, 2014

HSBC expects robust growth, as global demand accelerates


KUALA LUMPUR: Malaysia's economic activity is expected to be robust over the coming year as global demand accelerates, according to the latest HSBC Global Connections Report.

Trade flows into Malaysia are expected to strengthen with respondents holding a broadly positive outlook over the next six months, according to HSBC's Trade Confidence Index (TCI) survey.

The HSBC TCI surveyed a total of 23 markets, compiling six-month views of 5,200 exporters, importers and traders from small and mid-market enterprises on trade volume, buyer and supplier risks, the need for trade finance, access to trade finance and impact of foreign exchange on their businesses.

The index decreased three points to 110 since the first half of 2014, but remained above the 100 threshold, pointing to a positive outlook for trade prospects in the country.

HSBC Bank Malaysia Bhd head of global trade and receivable finance Vincent Sugianto said despite the short term concerns, the country's business environment has improved dramatically, as Asia continues to offer opportunities for businesses.

Some 81% of respondents from the survey has identified Asia as the best opportunities for growth over the next six months.

He said China will strengthen its position as Malaysia's largest trade partner for the long term with export growth in excess of 12% per annum is expected until 2030.

Growth in imports of industrial machinery contributes 30% of total export growth in 2014 to 2030, as government continues to invest in large infrastructure projects to achieve developed economy status by 2020.

"Asia remains a key trade focus for Malaysia as the region emerges stronger than ever. As Malaysia drives towards achieving a developed economy status by 2020, our position in Asia's growth story will only continue," he said.

Energy exports are expected to fuel the country's trade growth in the long run and is expected to grow by 5.3% per annum from 2014 to 2030. Malaysia will continue to strengthen its position as a major international hub for oil and gas production.

"Malaysia is a strategic location with a rich supply of oil and natural gas. As energy demands continue to rise both within Asia and globally, Malaysia will be able to take advantage of this to continue solidifying our position on the global market," said its head of project finance Michael Cooper.

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