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Malaysia’s Industrial Production Accelerates amid the Trade War

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Malaysia’s industrial production

On June 11, Malaysia’s Department of Statistics released its industrial production data for April. The industrial production index rose 4% on a year-over-year basis in April, surpassing analysts’ expectation of a 2.7% rise. All three subindexes (mining, manufacturing, and electricity) saw accelerated growth in April.

On the manufacturing side, transport equipment and other manufacturing clocked in 7.2% growth in April, while textiles, leather, and footwear saw 5.7% growth. Electrical and electronic products, which accounted for 38.7% of total exports between January and April 2019, saw handsome 4.1% growth.

On the mining side, crude oil production continued to fall, while natural gas production rose 6.1%. Electricity production in April rose 5.8% compared to the same month in 2018.

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Is Malaysia winning the trade war?

While the April data doesn’t reflect the effect of President Donald Trump’s new tariffs, the Malaysian economy seems to be on a growth path in the current quarter. In fact, Nomura recently said that Malaysia could be the biggest beneficiary of trade substitutions by the US and China in the event of a prolonged tariff war. The same report suggested that Malaysia could attract factories leaving China in search of greener pastures.

Malaysia ETF

The iShares MSCI Malaysia ETF (EWM) was up 0.2% as of 12:47 PM EDT today. So far in June, the ETF has gained 0.41%. However, it’s fallen 0.67% so far in 2019 amid mounting trade war concerns.

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